On 2015-01-11 08:30, Adebunmi AKINBO wrote:
+1 DelBianco = So, when the Board is confronting a community consensus
to take an action that could put the corporation at risk of a lawsuit
… how do you believe a board member is obliged to react?
I would say that it is the responsibility of the Board to find ways to
reconcile the community consensus with their legal obligations. Normally
this is done through a combination of engagement with the community (so
as to relieve unrealistic or unachievable expectations) and creative
approaches to implementation (so that the objectives of the community
are met in a manner compatible other obligations, which may not be the
implementation originally envisaged).
These twin duties are, in my view, *both* fundamental. The latter should
not be allowed to become an excuse for the Board to go its own way, in
defiance of the community.
Ultimately, if a Board member believes they are incapable of satisfying
all their duties, then their responsibility is to resign their office.
Indeed, the equivalent is true for ordinary commercial companies too;
directors have the same responsibilities to the law and the company, on
the one hand, and the company's owners on the other. So this is not a
radical suggestion. The radical idea would be to propose that directors
are entitled, in the final analysis, to advance their own preferences in
defiance of the community they are appointed to serve.
Kind Regards,
Malcolm.
On the above, can we seek a legal opinion?
Its important to address this scenario.
This can happen at anytime in the lifetime of ICANN.
-Akinbo.
On Sun, Jan 11, 2015 at 4:33 AM, Alan Greenberg
<alan.greenberg@mcgill.ca> wrote:
I am not an ICANN Board Member. I am not a lawyer. I am not a
California law expert.
But I "hope" that the answer is "it depends". I would like to
think that the risk of being sued and the potential liabilities (and
the chances of losing!) would be weighed against the ICANN Mission,
Core Values and its Articles of Incorporation which includes the
phrase "The Corporation shall operate for the benefit of the
Internet community as a whole".
Alan
At 10/01/2015 08:40 PM, Steve DelBianco wrote:
Thanks for the larger context around that bylaws provision, Bruce.https://mm.icann.org/mailman/listinfo/accountability-cross-community
But if we are considering whether the bylaws refer to
‘ICANN’ as the corporation or the community, see
ICANN’s own Management Operating Principles (2008 link [1],[2]
p. 5):
"The third and perhaps most critical point of tension is between
the accountability to the participating community to perform
functions in keeping with the expectations of the community and
the corporate and legal responsibilities of the Board to meet its
fiduciary obligations. The ultimate legal accountability of the
organization lies with the Board, not with the individuals and
entities that make up the ICANN community.â€
So, when the Board is confronting a community consensus to take
an action that could put the corporation at risk of a lawsuit …
how do you bellieve a board member is obliged to react?
From: Robin Gross <robin@ipjustice.org>
Date: Saturday, January 10, 2015 at 8:10 PM
To: Bruce Tonkin < Bruce.Tonkin@melbourneit.com.au>
Cc: " accountability-cross-community@icann.org" <
accountability-cross-community@icann.org>
Subject: Re: [CCWG-Accountability] Regarding role of Board
directors
Thanks for the info, Bruce. It is worth pointing out that
regardless of how those bylaws are interpreted, under California
law, nonprofit board members owe a legal duty of loyalty to the
corporation and there isn't anything that this working group can
do change California corporations law and the legal duty of
loyalty each board member owes to the corporation (as a
corporation, yes, not staff). This is where a tension comes in
for trying to do public governance via a private corporation - the
two concepts weren't "built" for the other, so there are gaps and
some issues as a result. I think this is an issue our group
should explore.
Best,
Robin
On Jan 10, 2015, at 4:43 PM, Bruce Tonkin wrote:
Hello Steve,
ICANN Bylaws Article 6 Section 7 defines the duty of directors to
ICANN the Corporation:
Directors shall serve as individuals who have the duty to act in
what they reasonably believe are the best interests of ICANN and
not as representatives of the entity that selected them, their
employers, or any other organizations or constituencies.
I have often heard you refer to that specific clause in the
bylaws over the past year.
I think it is worth understanding it a little more. I
personally believe that the intent of putting this clause in the
bylaws is that several Board members are appointed to the Board
from a specific stakeholder group, and this makes it clear that
Board members need to act on behalf of all stakeholders not just
the stakeholder group that appointed them. So from my
perspective it is a higher level of accountability than simply
being accountable to the group that appointed them. We certainly
make that clear as new directors join the Board.
The clause does not mean that somehow a Board director is now
accountable to the staff in the organization rather than the
"ICANN community".
For those appointed to the Board by the nominating committee - I
think it is already clear to them that they represent stakeholders
as a whole, as they go through a rigorous interview process in
front of the whole nominating committee.
In my experience as Board director, Boards in general operate on
behalf of their stakeholders - these stakeholders could be the
general public, shareholders, or members. Under its articles of
incorporation, ICANN is structured to act on behalf of the global
public interest - i.e. the general public.
In addition to acting on behalf of stakeholders, a board is also
accountable to govern an organization in accordance with the law.
This to me is the "corporate" obligation that you often refer.
This includes ensuring that the organization can meet its
financial commitments, ensure the staff have a safe workplace,
ensure there are financial controls to stop fraud, ensure the
organization complies with any contracts it has entered into etc.
Directors of ICANN can be held personally liable under law if
they are negligent.
After the ATRT1 review, a set of governance guidelines were
established to make this clearer:
https://www.icann.org/resources/pages/guidelines-2012-05-15-en
>From the section on the role of directors:
"The fundamental responsibility of Directors (as defined below)
is to exercise their business judgment to act in what they
reasonably believe to be the best interests of ICANN and in the
global public interest, taking account of the interests of the
Internet community as a whole rather than any individual group or
interest"
"It is the duty of the Board to oversee management's performance
to ensure that ICANN operates in an effective, efficient and
ethical manner. The Board will also be responsible for overseeing
the development of ICANN's short, medium and long-term strategic
plans, ensuring that they will result in sustainable outcomes, and
taking account of the critical interdependencies of financial,
human, natural, manufactured, social and intellectual capitals."
"Some of the Board's key responsibilities are to ensure that
ICANN's ethics are managed effectively, that ICANN as a whole (as
well as individual Board and staff members) operates pursuant to
the highest ethical standards, that ICANN complies with applicable
laws, and that ICANN considers adherence to best practices in all
areas of operation."
The bylaws could certainly be enhanced to incorporate the notion
in the Governance Guidelines that Board directors are accountable
to the Internet community as a whole.
Regards,
Bruce Tonkin
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