[CCWG-ACCT] Townhall meeting follow-up

Tue Jun 23 11:19:19 UTC 2015

Chris, that is an accurate clarification.

Sent with Good (www.good.com)

________________________________
From: accountability-cross-community-bounces at icann.org on behalf of Chris Disspain
Sent: Tuesday, June 23, 2015 06:14:45 AM
To: Malcolm Hutty
Cc: accountability-cross-community at icann.org
Subject: Re: [CCWG-ACCT] Townhall meeting follow-up

Malcolm,

We have been told that the Board of an
organisation with no members has a fiduciary duty to the company that
takes precedence over the Bylaws: if the Board decides that it is in the
best interests of the corporation to defy the bylaws, then defying them
is their legal duty.

With respect I think that is too simplistic a statement to describe what is a more complicated situation. One of the 3 legs of fiduciary duty of charitable corporation like ICANN is the duty of obedience. The duty of obedience is the duty to remain faithful to and pursue the goals of the organization. In practice, the duty of obedience requires the decision maker to follow the governing documents of the organisation and laws applicable to the organisation. Bylaws are governing documents.
It would be correct to say that where there are no members or designators there is a challenge in enforcing where the Board does NOT follow but it is incorrect to say that the Board can legally ignore its by-laws.

Cheers,

Chris

On 23 Jun 2015, at 20:01 , Farzanh <farzaneh.badii at gmail.com<mailto:farzaneh.badii at gmail.com>> wrote:

Thanks Malcolm, I can't agree more  ! I have been battling with serious existentialist questions since there has been a shift to a soft approach to accountability. We certainly need to emphasize how the new model can give us effective and  enforceable mechanisms! enforcement mechanisms can also be deterrent mechanism ! The farther we r from enforcement mechanisms the less deterred are the decision makers to make decisions against the community wishes !

On Jun 22, 2015, at 6:43 PM, Malcolm Hutty <malcolm at linx.net<mailto:malcolm at linx.net>> wrote:

On 22/06/2015 17:52, Seun Ojedeji wrote:
- Enforceability solutions other than membership:
Considering the complications relating to the various membership models
that has been suggested, there is obvious need to consider what is
achievable within the current structure and i think everything is
achievable except enforceability.

I completely agree with David McAuley's reply on this point.

Unfortunately, if you achieve "everything except enforceability", you
achieve nothing more than a clarification of your request. You do not
achieve accountability, only a clear statement of what you would like
ICANN to do. The decision rests elsewhere.

So it seem to me that we will already have some enforceability without
actually requiring membership since an organisation board is required to
obey/comply with its bylaw. So if the bylaw says; before you can do xyz,
it needs to go through abc process, why would the board not follow/obey
those direction as defined in the bylaw?

There are many reasons why things go wrong in this world. But I do not
want to suggest anything you may find fanciful or improbable or, worse,
that could be interpreted as attacking our honourable current Board members.

So for now, let's just say that the Board might believe they were
following the bylaws even if they were not. It is possible to err.

Beyond that though, is the problem Becky identified earlier: it seems
you are mistaken when you say that an organisation's board is required
to obey/comply with its bylaws. We have been told that the Board of an
organisation with no members has a fiduciary duty to the company that
takes precedence over the Bylaws: if the Board decides that it is in the
best interests of the corporation to defy the bylaws, then defying them
is their legal duty. Only by creating a membership (whether through
Empowered SOs, UAs, Open Membership, or some other approach) can we
raise up the bylaws to something the Board must honour in the way you
assume they already must.

Incidentally, I don't blame you at all for not realising this: I didn't
either, and was quite surprised to be told it. But the legal advice
being what it is, we must act accordingly.

--
          Malcolm Hutty | tel: +44 20 7645 3523
 Head of Public Affairs | Read the LINX Public Affairs blog
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