Fiduciary duties and MEM / CMSM
Hi Bruce, Thanks to you and Chris for your replies. Just want to focus on the fiduciaries bit: On 13 September 2015 at 16:02, Bruce Tonkin <Bruce.Tonkin@melbourneit.com.au
wrote:
Relatedly - has the board analysed whether the model is viable without a membership approach given the obligations directors hold (fiduciary obligations) in a non-membership system?
I don’t understand the question. From my understanding Directors of a board have the same fiduciary obligations regardless of where it is membership or non-membership organization. The arbitration model I think could apply to either type of organization as well.
My understanding of this issue is as follows. [I too, joyously, am not a lawyer...!] The fiduciary obligations of the Board to the organisation etc have been well discussed. In particular, they create some issues in terms of ensuring that accountability mechanisms without a member leave the Board as the final decision-maker. That is why for instance ICANN has long opposed binding arbitration - having an external decision-maker who could bind the Board could be incompatible with those obligations and place the Board in an impossible position. Same with the various community powers that have been proposed - in the current situation, they could erode the ability of those obligations. In creating the Community Mechanism as Single Member, this problem was resolved. The fiduciary duties directors face in a membership-based organisation are subtly but significantly different. Because the "membership body" is one with various rights, there are no conflicts between its ability to make decisions and the Board operating with integrity in response to them. This difference is implicit in many of the Board's suggestions about how to change the community powers etc in the feedback lodged at the end of last week, and in how the MEM would operate. It is not surprising it's important, because it goes to the heart of who has final authority in the ICANN system - the Board, as it does today & would under the Board's proposed alternative, or the community organised through the CMSM, as it would under the CCWG's proposal. To me this is a core difference in approach we should tease out carefully and accurately. It is why on the call with the Board on 3 Sept, I tried to be clear that the issue goes well beyond the ability to "enforce the powers in Court". It is this shift in fiduciary responsibility that is an important difference. I hope this is clear, but recognise it is a brief effort at clarity.... cheers Jordan
Well stated Philip S. Corwin, Founding Principal Virtualaw LLC 1155 F Street, NW Suite 1050 Washington, DC 20004 202-559-8597/Direct 202-559-8750/Fax 202-255-6172/Cell Twitter: @VLawDC "Luck is the residue of design" -- Branch Rickey Sent from my iPad On Sep 13, 2015, at 8:27 PM, Jordan Carter <jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz>> wrote: Hi Bruce, Thanks to you and Chris for your replies. Just want to focus on the fiduciaries bit: On 13 September 2015 at 16:02, Bruce Tonkin <Bruce.Tonkin@melbourneit.com.au<mailto:Bruce.Tonkin@melbourneit.com.au>> wrote:
Relatedly - has the board analysed whether the model is viable without a membership approach given the obligations directors hold (fiduciary obligations) in a non-membership system?
I don’t understand the question. From my understanding Directors of a board have the same fiduciary obligations regardless of where it is membership or non-membership organization. The arbitration model I think could apply to either type of organization as well. My understanding of this issue is as follows. [I too, joyously, am not a lawyer...!] The fiduciary obligations of the Board to the organisation etc have been well discussed. In particular, they create some issues in terms of ensuring that accountability mechanisms without a member leave the Board as the final decision-maker. That is why for instance ICANN has long opposed binding arbitration - having an external decision-maker who could bind the Board could be incompatible with those obligations and place the Board in an impossible position. Same with the various community powers that have been proposed - in the current situation, they could erode the ability of those obligations. In creating the Community Mechanism as Single Member, this problem was resolved. The fiduciary duties directors face in a membership-based organisation are subtly but significantly different. Because the "membership body" is one with various rights, there are no conflicts between its ability to make decisions and the Board operating with integrity in response to them. This difference is implicit in many of the Board's suggestions about how to change the community powers etc in the feedback lodged at the end of last week, and in how the MEM would operate. It is not surprising it's important, because it goes to the heart of who has final authority in the ICANN system - the Board, as it does today & would under the Board's proposed alternative, or the community organised through the CMSM, as it would under the CCWG's proposal. To me this is a core difference in approach we should tease out carefully and accurately. It is why on the call with the Board on 3 Sept, I tried to be clear that the issue goes well beyond the ability to "enforce the powers in Court". It is this shift in fiduciary responsibility that is an important difference. I hope this is clear, but recognise it is a brief effort at clarity.... cheers Jordan _______________________________________________ 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
Thanks Jordan. I understand now. Will investigate and respond in detail but yes, we believe the mechanism is indeed viable in a non-membership system. Cheers, Chris
On 14 Sep 2015, at 10:26 , Jordan Carter <jordan@internetnz.net.nz> wrote:
Hi Bruce,
Thanks to you and Chris for your replies. Just want to focus on the fiduciaries bit:
On 13 September 2015 at 16:02, Bruce Tonkin <Bruce.Tonkin@melbourneit.com.au <mailto:Bruce.Tonkin@melbourneit.com.au>> wrote:
Relatedly - has the board analysed whether the model is viable without a membership approach given the obligations directors hold (fiduciary obligations) in a non-membership system?
I don’t understand the question. From my understanding Directors of a board have the same fiduciary obligations regardless of where it is membership or non-membership organization. The arbitration model I think could apply to either type of organization as well.
My understanding of this issue is as follows. [I too, joyously, am not a lawyer...!]
The fiduciary obligations of the Board to the organisation etc have been well discussed. In particular, they create some issues in terms of ensuring that accountability mechanisms without a member leave the Board as the final decision-maker.
That is why for instance ICANN has long opposed binding arbitration - having an external decision-maker who could bind the Board could be incompatible with those obligations and place the Board in an impossible position. Same with the various community powers that have been proposed - in the current situation, they could erode the ability of those obligations.
In creating the Community Mechanism as Single Member, this problem was resolved. The fiduciary duties directors face in a membership-based organisation are subtly but significantly different. Because the "membership body" is one with various rights, there are no conflicts between its ability to make decisions and the Board operating with integrity in response to them.
This difference is implicit in many of the Board's suggestions about how to change the community powers etc in the feedback lodged at the end of last week, and in how the MEM would operate.
It is not surprising it's important, because it goes to the heart of who has final authority in the ICANN system - the Board, as it does today & would under the Board's proposed alternative, or the community organised through the CMSM, as it would under the CCWG's proposal.
To me this is a core difference in approach we should tease out carefully and accurately. It is why on the call with the Board on 3 Sept, I tried to be clear that the issue goes well beyond the ability to "enforce the powers in Court". It is this shift in fiduciary responsibility that is an important difference.
I hope this is clear, but recognise it is a brief effort at clarity....
cheers Jordan
_______________________________________________ Accountability-Cross-Community mailing list Accountability-Cross-Community@icann.org https://mm.icann.org/mailman/listinfo/accountability-cross-community
Hi Jordan, Would this (important) concern be resolved if the arbitral tribunal decisions are approved/rejected by a community mechanism? That would -- if this is where the discussion is indeed headed -- obviate the need for creating a SMCM-like legal entity. On the other hand, I don't know how the community will be able to intervene at the stage between a tribunal's decision and enforcing it in a court of law. Just a thought.. Arun On Mon, Sep 14, 2015 at 6:14 AM, Chris Disspain <ceo@auda.org.au> wrote:
Thanks Jordan. I understand now.
Will investigate and respond in detail but yes, we believe the mechanism is indeed viable in a non-membership system.
Cheers,
Chris
On 14 Sep 2015, at 10:26 , Jordan Carter <jordan@internetnz.net.nz> wrote:
Hi Bruce,
Thanks to you and Chris for your replies. Just want to focus on the fiduciaries bit:
On 13 September 2015 at 16:02, Bruce Tonkin < Bruce.Tonkin@melbourneit.com.au> wrote:
Relatedly - has the board analysed whether the model is viable without a membership approach given the obligations directors hold (fiduciary obligations) in a non-membership system?
I don’t understand the question. From my understanding Directors of a board have the same fiduciary obligations regardless of where it is membership or non-membership organization. The arbitration model I think could apply to either type of organization as well.
My understanding of this issue is as follows. [I too, joyously, am not a lawyer...!]
The fiduciary obligations of the Board to the organisation etc have been well discussed. In particular, they create some issues in terms of ensuring that accountability mechanisms without a member leave the Board as the final decision-maker.
That is why for instance ICANN has long opposed binding arbitration - having an external decision-maker who could bind the Board could be incompatible with those obligations and place the Board in an impossible position. Same with the various community powers that have been proposed - in the current situation, they could erode the ability of those obligations.
In creating the Community Mechanism as Single Member, this problem was resolved. The fiduciary duties directors face in a membership-based organisation are subtly but significantly different. Because the "membership body" is one with various rights, there are no conflicts between its ability to make decisions and the Board operating with integrity in response to them.
This difference is implicit in many of the Board's suggestions about how to change the community powers etc in the feedback lodged at the end of last week, and in how the MEM would operate.
It is not surprising it's important, because it goes to the heart of who has final authority in the ICANN system - the Board, as it does today & would under the Board's proposed alternative, or the community organised through the CMSM, as it would under the CCWG's proposal.
To me this is a core difference in approach we should tease out carefully and accurately. It is why on the call with the Board on 3 Sept, I tried to be clear that the issue goes well beyond the ability to "enforce the powers in Court". It is this shift in fiduciary responsibility that is an important difference.
I hope this is clear, but recognise it is a brief effort at clarity....
cheers Jordan
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-- - @arunmsukumar <http://www.twitter.com/arunmsukumar> Senior Fellow, Centre for Communication Governance <http://www.ccgdelhi.org> National Law University, New Delhi Ph: +91-9871943272
participants (4)
-
Arun Sukumar -
Chris Disspain -
Jordan Carter -
Phil Corwin