[CCWG-ACCT] question on fiduciary duties and their objectivity

[Mathieu Weill]

Dear Jorge,

You are rightly pointing out one of the key areas where a shared 
understanding of the concept and consequences has not been achieved so 
far. $

Our 2nd report highlighted this issue for further investigation during 
WS2, but I note that some comments mentioned that this should not be 
clarified as part of WS1. The exact wording of our work item was :
>
> oClarifying understanding of the fiduciary duties of Board Directors 
> and related expectations concerning Director behavior for the Board.
>

Past work on the topic include several mentions in legal memos. Most 
notable is on page 4 of one of the initial memos from our Counsel dated 
12 april 
(https://community.icann.org/download/attachments/52890082/Combined%20CCWG%20Cover%20Memo%20and%20Templates.pdf?version=3&modificationDate=1428797461000&api=v2) 
which addresses the balance between accountability and decision making 
authority.

If we were to pursue this at this stage, we probably should flesh out 
some questions to direct work from our Counsel. What would be the type 
of questions you would raise Jorge ? (or others) ?

Best
Mathieu


Le 01/10/2015 10:41, Jorge.Cancio at bakom.admin.ch a écrit :
>
> Dear all,
>
> During the debates we had on the last conference call I put forward a 
> question which I feel could be important to better understand under 
> Californian corporate law.
>
> This is whether there are any means to subject the exercise of 
> “fiduciary duties” (by the Board) to objective standards.
>
> As I have understood the discussion so far, the membership model 
> allows the member to override “fiduciary duties” of the Board. However 
> the member itself has no fiduciary duties vis-à-vis the organization.
>
> On the other hand, fiduciary duties are apparently a useful tool 
> within corporate law, as it imposes a duty to care for the welfare of 
> the whole of the organization.
>
> The argument which is made by some, as far as I understand it, is that 
> there is however a problem in the exercise of “fiduciary duties” as it 
> would provide the Board with an “arbitrary” power, e.g. to override 
> community decisions (in exercise of community powers) without being 
> bound to any objective standards.
>
> Considering all this, my question (to the Lawyers, if this is 
> certified as a question to them) would be: is there any means under 
> Californian Law (or other US jurisdictions…) that would allow to 
> subject the exercise of fiduciary duties to objective standards? (e.g. 
> be it through concretizing these duties in the Bylaws, subjecting them 
> to arbitration, imposing special requirements on the rationale needed 
> to be provided if they are used to override community decisions, or, 
> for instance, imposing extra-supermajorities in the Board in order to 
> being able to invoke such duties?)
>
> Hope this helps,
>
> Regards
>
> Jorge
>

-- 
*****************************
Mathieu WEILL
AFNIC - directeur général
Tél: +33 1 39 30 83 06
mathieu.weill at afnic.fr
Twitter : @mathieuweill
*****************************

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