[Rt4-whois] Board Conflicts of Interest Policy

[Denise Michel]

*Conflicts of Interest Policy
*[Adopted March 4, 1999, pursuant to ICANN Bylaws,
Article V, Section 7, and Article VI, Section 3(b)]
This policy superseded by the 30 July 2009
version<http://www.icann.org/en/committees/coi/coi-policy-30jul09-en.htm>.


*1. Purpose*

The purpose of the Conflicts of Interest policy is to ensure that the
deliberations and decisions of the Corporation are made in the interests of
the global Internet community as a whole, and to protect the interests of
the Corporation when it is contemplating entering into a transaction,
contract, or arrangement that might benefit the private interest of an
Interested Director, Officer or Person (as defined below). An Interested
Director, Officer or Person may not use his or her position with respect to
the Corporation, or confidential corporate information obtained by him or
her relating to the Corporation, in order to achieve a financial benefit for
himself or herself or for a third person, including another nonprofit or
charitable organization. This policy is intended to supplement but not
replace any applicable laws governing conflicts of interest in nonprofit and
charitable corporations.

*2. Definitions*

2.1 *Compensation*. "Compensation" includes direct and indirect remuneration
as well as gifts or favors that are substantial in nature.

2.2 *Family*. The "family" of any individual shall include only his or her
spouse; his or her siblings and their spouses; his or her ancestors; and his
or her descendants and their spouses.

2.3 *Financial Interest*. A person has a "financial interest" if the person
has, directly or indirectly, through business, investment or family:

(a) An existing or potential ownership or investment interest in any entity
with which the Corporation has a transaction, contract, or other
arrangement, or

(b) A compensation arrangement with the Corporation or with any entity or
individual with which the Corporation has a transaction, contract, or other
arrangement, or

(c) An existing or potential ownership or investment interest in, or
compensation arrangement with, any entity or individual with which the
Corporation is negotiating a transaction, contract, or other arrangement, or

(d) An existing or potential ownership or investment interest in, or
compensation arrangement with, any entity whose business or operation has
been or will be directly affected by a decision or action of the
Corporation.

 2.4 *Interested Director*. "Interested Director" shall mean any Director of
the Corporation who has a material financial interest, as defined above, or
who serves as a Director or Officer of any entity with which the Corporation
has a transaction, contract, or other arrangement.

2.5 *Interested Officer*. "Interested Officer" shall mean any Officer who
has a material financial interest, as defined above, or who serves as a
Director or Officer of any entity with which the Corporation has a
transaction, contract, or other arrangement. For purposes of this policy,
the President of the Corporation shall be treated as an Officer.

2.6 *Interested Person*. "Interested Person" shall mean either:

(a) Any person currently being compensated by the Corporation for services
rendered to it within the previous 12 months, whether as a full- or
part-time employee, independent contractor, or otherwise, or

(b) Any person whose family member, as defined in Section 2.2, is currently
being compensated by the Corporation for services rendered to it within the
previous 12 months, whether as a full- or part-time employee, independent
contractor, or otherwise.

 *3. Committee on Conflicts of Interest*

3.1 To administer and monitor compliance with this Policy, the Board shall
create a Committee of the Board on Conflicts of
Interest<http://www.icann.org/committees/coi/>("Conflicts Committee"),
to consist of at least two Directors named by the
Board.

3.2 The Conflicts Committee <http://www.icann.org/committees/coi/> shall
require a statement from each Director and Officer not less frequently than
once a year setting forth all business and other affiliations which relate
in any way to the business and other activities of the Corporation.

*4. Duty to Abstain*

4.1 No Director shall vote on any matter in which he or she has a material
and direct financial interest that will be affected by the outcome of the
vote.

4.2 In the event of such an abstention, the abstaining Director shall state
the reason for the abstention, which shall be noted in the minutes of the
Board of Directors.

*5. Disclosure by Directors and Officers*

5.1 When requested by the Conflicts Committee (not less frequently than once
a year), each Director and Officer shall promptly submit a statement to the
Committee setting forth all business and other affiliations which relate in
any way to the business and other affiliations of the Corporation.

5.2 With respect to any particular matter then pending before the
Corporation, each Director and Officer shall disclose to the Conflicts
Committee any matter that could reasonably be considered to make the
Director or Officer an "Interested Director" or "Interested Officer," as
defined above.

5.3 With respect to any particular matter then pending before the
Corporation, each Director and Officer shall disclose to the Conflicts
Committee any relationship or other factor that could reasonably be
considered to cause the Director or Officer to be considered to be an
"Interested Person," as defined above.

5.4 For purposes of this section, Officers of the Corporation need not
disclose compensation and other benefits paid to the Officer by the
Corporation pursuant to Board resolution.

*6. Disclosure by Supporting Organization*

Members of or participants in Supporting Organization councils must disclose
conflicts of interest or other financial interests in matters within the
scope of the Supporting Organization in the manner required by the Bylaws of
the Supporting Organization.

*7. Procedures in Connection with Proposed Transactions and Arrangements*

7.1 Scope. This section applies to any proposed transaction, contract, or
arrangement in which a Director, Officer, or Interested Person has a
material financial interest.

7.2 Duty to Disclose. In connection with any actual or possible conflicts of
interest, an Interested Director or Interested Officer must disclose the
existence and nature of his of her material financial interest to the
Conflicts Committee prior to the consideration of the proposed transaction,
contract, or arrangement by the Board or any Committee of the Board.

7.3 Determining Whether a Conflict of Interest Exists. After disclosure of
the financial interest, the disinterested members of the Conflicts Committee
shall determine whether a conflict of interest exists. Neither the Board nor
any Committee of the Board shall vote upon any proposed transaction,
contract, or arrangement in connection with which an actual or possible
conflict of interest has been disclosed by an Interested Director until such
time as the Conflicts Committee has addressed the actual or possible
conflict of interest. For matters pending before the full Board of
Directors, a referral to the Conflicts Committee will not be required where
the Interested Director fully discloses to the Board his or her financial
interest and abstains from participation in the Board's consideration of the
proposed transaction, contract, or arrangement.

7.4 Procedures for Addressing a Conflict of Interest

7.4.1 Where a matter has been referred to the Conflicts Committee and the
Conflicts Committee has concluded that a conflict of interest exists, the
chairman of the Board or Committee of the Board shall, if appropriate,
appoint a disinterested person or committee to investigate alternatives to
the proposed transaction, contract, or arrangement.

7.4.2 After exercising due diligence, the Board or Committee shall determine
whether the Corporation can obtain a more advantageous transaction,
contract, or arrangement with reasonable efforts from a person or entity
that would not give rise to a conflict of interest.

7.4.3 If a more advantageous transaction, contract, or other arrangement is
not reasonably attainable under circumstances that would not give rise to a
conflict of interest, the Board or Committee shall determine by a majority
vote of the disinterested Directors whether the transaction, contract, or
arrangement is in the Corporation's best interest and for its own benefit
and whether it is fair and reasonable to the Corporation, and shall make its
decision as to whether to enter into the transaction, contract, or
arrangement in conformity with such determination.

 *8. Violations of the Conflicts of Interest Policy*

8.1 If the Conflicts Committee has reasonable cause to believe that a
Director or Officer has failed to disclose an actual or possible conflict of
interest, it shall inform the Director or Officer of the basis for such
belief and afford the Director or Officer an opportunity to explain the
alleged failure to disclose.

8.2 If, after hearing the response of the Director or Officer and making
such further investigation as may be warranted in the circumstances, the
Conflicts Committee determines that the member has in fact failed to
disclose an actual or possible conflict of interest, it shall recommend to
the Board of Directors appropriate disciplinary and corrective action.

8.3 The violation of this conflicts of interest policy is a serious matter
and may constitute "cause" for removal or termination of a Director or
Officer, or the termination of any contractual relationship the Corporation
may have with an Interested Person or other party.

*9. Records of Proceedings*

9.1 The minutes of the Conflicts Committee shall contain:

(a) The names of Directors and Officers found to have a material financial
interest in connection with an actual or possible conflict of interest; the
nature of the financial interest; any action taken to determine whether a
conflict of interest was present; and the decision of the Conflicts
Committee as to whether a conflict of interest in fact existed.

(b) The names of the persons who were present for discussions and votes
relating to the actual or potential conflict of interest; the content of the
discussion; and a record of any votes taken in connection therewith.

 9.2 In connection with a conflict of interest, the minutes of the Board or
other Committee of the Board shall contain the names of the persons who were
present for discussions and votes relating to the transaction or
arrangement; the content of the discussion, including any alternatives to
the proposed transaction or arrangement; and a record of any votes taken in
connection therewith.

*10. Compensation Committees*

A member of any Committee of the Board the jurisdiction of which includes
compensation matters and who receives compensation from the Corporation for
services is precluded from voting on matters pertaining to that member's
compensation.

*11. Annual Statements*

Each Director and Officer shall annually sign a statement which affirms that
such person:

(a) Has received a copy of the conflicts of interest policy;

(b) Has read and understands the policy;

(c) Has agreed to comply with the policy; and

(d) Understands that the Corporation is a charitable organization and that
in order to maintain its federal tax exemption it must engage primarily in
activities which accomplish one or more of its tax-exempt purposes.

*12. Periodic Reviews*

The Conflicts Committee shall periodically consider whether and how this
Conflicts of Interest Policy should be revised or amended to better meet its
objectives. In connection with any periodic review conducted by the
Corporation to ensure that it operates in a manner consistent with its
charitable purposes, the Conflicts Committee shall report on the matters
referred to it and their resolution.
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