I would add that state attorneys general are generally empowered to enforce against directors violations of the bylaws that breach their fiduciary duties or cause the corporation to use its assets outside its charitable purposes. I would also add that if bylaws violate the corporate law or the corporation’s own Articles of Incorporation, the board’s duty is to follow the statute or the Articles, not the bylaws. Rosemary From: accountability-cross-community-bounces@icann.org [mailto:accountability-cross-community-bounces@icann.org] On Behalf Of Holly Gregory Sent: Tuesday, June 23, 2015 4:19 AM To: Chris Disspain; Malcolm Hutty Cc: accountability-cross-community@icann.org Subject: Re: [CCWG-ACCT] Townhall meeting follow-up Chris, that is an accurate clarification. Sent with Good (www.good.com<http://www.good.com>) ________________________________ From: accountability-cross-community-bounces@icann.org<mailto:accountability-cross-community-bounces@icann.org> on behalf of Chris Disspain Sent: Tuesday, June 23, 2015 06:14:45 AM To: Malcolm Hutty Cc: accountability-cross-community@icann.org<mailto:accountability-cross-community@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@gmail.com<mailto:farzaneh.badii@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@linx.net<mailto:malcolm@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 London Internet Exchange | http://publicaffairs.linx.net/<https://urldefense.proofpoint.com/v2/url?u=http-3A__publicaffairs.linx.net_&d=AwMFAg&c=Od00qP2XTg0tXf_H69-T2w&r=1-1w8mU_eFprE2Nn9QnYf01XIV88MOwkXwHYEbF2Y_8&m=FK7b8kVkEMK2_MPHl9hkBB7An6cxn_MT87wTkCBHb7A&s=HKkuAJD_EoWIurwvGKRqFN2KzTLHIgIiahmB-XGCSkE&e=> London Internet Exchange Ltd 21-27 St Thomas Street, London SE1 9RY Company Registered in England No. 3137929 Trinity Court, Trinity Street, Peterborough PE1 1DA _______________________________________________ Accountability-Cross-Community mailing list Accountability-Cross-Community@icann.org<mailto:Accountability-Cross-Community@icann.org> https://mm.icann.org/mailman/listinfo/accountability-cross-community _______________________________________________ Accountability-Cross-Community mailing list Accountability-Cross-Community@icann.org<mailto:Accountability-Cross-Community@icann.org> https://mm.icann.org/mailman/listinfo/accountability-cross-community **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. 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