Hi Mathieu,

After reviewing the legal memo you just sent and what it says about fiduciary duties, I feel that the question I’m presenting is not tackled in that Memo and that we still would largely benefit right now from a better understanding of the question I was proposing.

I’ve tried to specify the question a bit more, and it would look as follows:

Is there any means under Californian Law that would allow to subject the exercise of fiduciary duties to objective and controllable standards? For example, could the following or similar means be acceptable and usable under Californian law:

· concretizing these fiduciary duties in the Bylaws;

· subjecting their correct interpretation to arbitration;

· imposing special requirements on the rationale needed to be provided if they are used to override community decisions;

· imposing extra-supermajorities in the Board in order to being able to invoke such duties?

The underlying idea is IMHO very relevant to our present discussions on the Model, especially for those of us who are not experts in Californian Corporate Law: i.e. is there a legal means to subject those fiduciary duties to specific and objective standards and/or third-party control? If there are, could we use those means (if they exist) to develop our model? If they do not exist, or are too limited, this might speak for a membership structure.

Please let me know if you can proceed with this.

Regards

Jorge

Von: Mathieu Weill [mailto:mathieu.weill@afnic.fr]
Gesendet: Freitag, 2. Oktober 2015 11:06
An: Cancio Jorge BAKOM <Jorge.Cancio@bakom.admin.ch>; accountability-cross-community@icann.org
Cc: leonfelipe@sanchez.mx; thomas@rickert.net
Betreff: Re: question on fiduciary duties and their objectivity

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 :

o Clarifying 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@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@afnic.fr
Twitter : @mathieuweill
*****************************