[council] The Challenges of a representational Board

[Bruce Tonkin]

Hello All,

While we consider the election of a person to the ICANN Board and also
consider how to improve our own processes through the GNSO review, it is
worth reflecting on some of the weaknesses and strengths of the ICANN
governance model.  This representational model applies effectively to
both the ICANN Board and the GNSO Council.

There was a good article on this topic by Lynn Ralph and Alan Cameron in
the June 2006 issue of the Australian Institute of Company Directors
(AICD) magazine.

See below for some extracts from the article.

Regards,
Bruce Tonkin



Failings
========

"What are the typical failings of representative boards?  First and
perhaps most important, is a lack of critical skills and experience,
including in many cases, experience as directors.  Removing the ability
to consider composition of the board from an organisational perspective
will inevitably produce gaps, and perhaps the most dangerous one of
these is lack of an effective, independent chairman.

Second, and also quite common, is the tension between the directors'
obligations to the company and their commitments to at least some of the
goals of the constituency.   This often exhibits itself in conflicts
between the need for a board to operate in confidence and demands from
constituencies for reporting back.   Conflict of interest management is
critical here, as inevitably all directors appointed by a constituency
have some degree of conflict.  The distinction between delegates, those
appointed to ascertain and act on the instructions of the constituency,
and representatives, those appointed to an office to make up their own
mind on issues in the interest of the organisation, is not well
understood.

Third, and often as a direct result of these boards being quite large,
are poor group dynamics - factionalism, caucusing, or defending prior
positions as opposed to productive discussion.   Even messier are
governing bodies which have split into two (or more) due to the large
number of constituencies, resulting in the confusion of roles and
responsibilities.

Fourth, is a common confusion around the respective accountabilities of
the board and management, as current customers/users often lack the
ability to see the appropriate boundaries to their role.   Simple
enthusiasm for a cause can make representative directors more likely to
assume hands-on roles and inevitably slide into micro-management.

Finally, constituencies can fail to monitor the performance of their
appointee once the appointment has been made, resulting in reduced
individual accountability."



Strengths
=========

"Firstly, representative boards can have a number of important
strengths.  Where directors are personally connected to the industry,
cause or activity, they typically are enthusiastic and committed
contributors.  On boards where the representatives come from a range of
constituencies, a healthy diversity of views and experience is certainly
possible.   Having directors who are respected within their
constituencies can provide credibility and ownership amongst
stakeholders,   Such directors should be more likely to be able to
predict whether management strategies and proposals will be acceptable
to stakeholders."

"There are a number other strategies which can be employed to
counter-balance the structurally generated weaknesses of representative
boards.  First, a strong strategic framework with clearly articulated
targets and outcomes will provide the framework for decision-making,
without which the risk of falling back on special interests emerges.

Secondly, setting out clear board operating protocols - by that we mean
not just the standard role of the board vs. management, but also those
informal, usually unspoken, rules of engagement about "how we do things
here" that make a board work or otherwise.   In this category, we would
put issues around solidarity, confidentiality, and the authority of the
chair.   Also included in this should be conscious strategies to improve
group dynamics.

Thirdly, extensive director induction should be introduced to accelerate
effectiveness, whether this means industry training or general director
education.  Finally, accountability mechanisms should be implemented to
ensure well meaning but underperforming directors either lift their game
and/or are managed off; formal, independent board and individual
director reviews play a critical role here.