Hi Cherine Thanks for these comments, a few thoughts in line which simply represent my own perspective on what you have written. I am a fairly direct person but please don't take that as meaning I don't appreciate the time you have put into these comments or the good intent behind them. On 7 July 2015 at 18:45, Cherine Chalaby <cherine.chalaby@icann.org> wrote:

Dear Mathieu and the CCWG group,

In Buenos Aires, I attended most of the sessions on the CCWG proposal and made several comments. I wish to share these comments in writing with you and the accountability-cross-community group as you prepare for the F2F meeting in Paris. As I said in Buenos Aires, please do not take my comments as fierce criticism but more as constructive suggestions.

Can I urge you, given your comment at the end of your note, to add to your constructive critique, constructive suggestions as to how your criticisms could be mitigated? I acknowledge this is not easy stuff, but we are three weeks away from trying to land a second full draft proposal, and specific improvements are very helpful for the group at this point.

Let me start by saying that as a Director of the Board, I believe in (a) appropriate empowerment of the community within the multi-stakeholder model, (b) strengthening of the the bottom-up process, and (c) enhancing accountability without destabilising the security and stability of ICANN or introducing opportunities for capture.

In my personal capacity as a member of the community, I support the CWG proposal, but I have concerns that the CCWG draft proposal, discussed in Buenos Aires, could lead to three unintended consequences that could seriously damage ICANN in the long run. These unintended consequences apply to both the Membership model as well as the Designator (Hybrid) model.

*Unintended Consequence 1: Weakening ICANN's Governance model*

The CCWG has asserted that the “empowered community” will have control over the Board in the following areas: Strategic Plan, Operating Plan, Budget and Bylaws changes, fundamental or not. As a consequence, there will be no decision that the Board can make in those core fiduciary responsibilities that cannot be rejected or stopped by the proposed new community-empowerment mechanism.

The CCWG draft proposal indicates that the Board would always have the ability to exercise its own judgment after the community-empowerment mechanism makes its decisions. But the proposal also states that if the community-empowrment mechanism does not like what the Board has done, it can remove the Board individually or collectively. Hence, the new community-empowerment mechanism in fact has the ultimate power to control the activities of ICANN. While as a community member who believes in the bottom-up model, I support the principles behind this objective, I believe it is vitally important that these newly transferred powers are paired with the transfer of corresponding accountability. The CCWG proposal in effect creates two bodies – one that is empowered (the community) and a separate one that is accountable (the Board). This, in my view, breaches a fundamental principle of governance, weakens the overall structure of ICANN, and is not sustainable.

The argument above is falsified by the successful operation across the globe, including in the United States, of membership based organisations or of companies owned by shareholders. In all of these organisations, the responsibilities of the Board and its accountability to its members or shareholders have to be juggled with wider social responsibilities. ICANN, post the NTIA contract, would be in a disturbingly unique situation in lacking such tensions if there were not a distribution of powers away from the Board. Your analysis above, to be sustainable, would surely have to explain why all the other member or shareholder organisations in the world "breach a fundamental principle of governance" - I regard such proposals as fulfilling a basic principle, that being one of accountability in a true sense of the Board to its stakeholders. Is the end consequence of your analysis a logic that says: to preserve its current role, ICANN's board cannot sustain the relocation of authority within the ICANN system to the broader community?

*Unintended Consequence 2: Threatening ICANN's financial stability *

The CCWG draft proposal gives the community the right to reject the Board approved budget. I have not yet seen proposed mechanisms to prevent the following from happening:

(a) Budget paralysis, whereby members of the community will vote against each other rather than be accountable to each other. For example, given budget limitations, what will stop members from voting against funding projects that do not facilitate their personal interest. This could lead to a situation where the budget is never adopted or takes too long to adopt, therefore jeopardising ICANN’s ability to deliver on key commitments such as contractual compliance enforcement , including issues relating to enhanced consumer protections and enhanced IP and rights protections, and other initiatives important to the community. This budget paralysis could also risk the stable and continued funding of the IANA functions. That is why I suggested in Buenos Aires that a commitment to fund the IANA functions should be separated from this budgetary process and embodied in the ICANN Bylaws.

The "members" or "designators" don't have any personal interests to advance. They are too diverse for that internally. And because of the proposed thresholds which require high levels of support across SOs and ACs to force the return of the Budget to the Board, the chances of coordination of a coalition of particular demands, and then imposing them on the Board, seems limited in the extreme. Not least because the Board would rightly call attention to such an approach, and in doing so lead in all likelihood to a dissolution of critical elements of any such coalition. I'd also add that since the Board itself is elected by the community, albeit over time, it faces the same sort of risks over time. In terms of the paralysis part, we have to work the process out so that certainly a single rejection does not have the impact you envision. Improving the consultation part of the budget process so as to further reduce the already highly remote prospect of such a power being used is a WS2 issue - no time to sort that before transition. Finally, on the separate treatment of the IANA Budget - do you have a concrete proposal as to how this might be done? (b) Threat to the stability of the business environment in which many have

invested and rely on ICANN’s ability to maintain, as under the new proposal, members of the community will have the right to reject the budget, but not a single member of the community will be accountable for the budget bottom line.

The Board remains accountable for that. It would be in breach of its duties to propose a budget that did not meet basic standards of responsibility. Nothing the CCWG has proposed changes this. (c) Unfairness, where the financial needs of the minority will seldom be

fulfilled because final budget decisions will be made as a result of a majority voting by members of the community who do not have an obligation to act in the collective interest of all stakeholders.

This isn't part of the CCWG proposal. The staff generate the budget as today, and the Board proposes and approves it as today. All that is being contemplated is the right, where the community is seriously concerned in a way that cannot be resolved, to send it back. This does not give rise to the concern you identify, any more than today's process of a majority of Board members being able to approve a budget, does. If it does, I have not understood why, from what you have written.

it is worth noting that the current budget process is robust and transparent and ensures that none of the above consequences can occur. It also ensures community participation and it can always be improved.

I agree it can be improved; I think your statement that the current process ensures none of the above can occur is at best a stretch.

*Unintended Consequence 3: Dysfunctional Board*

The CCWG draft proposal gives the community the right to remove an individual board member. The CCWG proposed mechanism for implementing this right will in my view lead to the creation of two classes of board members. Those that will act in sole the interest of the SO/AC that has elected them, and the others who will be free to act in the collective interest of all stakeholders.

Would you be able to clarify please how it does this? Are the latter category those who are appointed by the NomCom in your view?

The threat of removal without significant justification runs the risk of having individual Board members fear the loss of their seats if they do not adhere to the wishes of the constituency from which they come. This could turn the Board into a representative body, or a parliament, i.e. a place where opposing interests clash and are reconciled, rather than the present situation in which all Board members are obligated to act as a body in the best interests of the overall organization.

No change to that obligation is contemplated. That responsibility applies to all directors of an organisation whether it has members with removal rights or designators with the same, or whether it doesn't. It is simply a responsibility of mature corporate governance that directors give effect to those responsibilities knowing that in the end, they can be removed if they are not serving the community which elected them - in the broadest sense. Again, the high thresholds involved in the CCWG's proposals militate against trivial action in this regard. If this would ruin ICANN governance as a necessary consequence of the structure, by definition then all organisations that have members or shareholders must face the same problem. In fact they do not.

Furthermore, Board deliberations and decisions would be at risk of being driven to a large extent by subjective goals and personal compromise.

It is not clear why this suddenly occurs. It doesn't happen in my organisation, which is membership based. It doesn't appear to happen in most well-governed organisations. It does happen where Boards have poor or dysfunctional cultures, or where the realities of governance are not well understood among those that select Board members.

From my observation as a relative newcomer, ICANN has some work to do in that regard, no matter what happens with the CCWG proposal.

I do not have concrete suggestions to prevent these unintended consequences from happening, but I sincerely hope that the CCWG takes my concerns into account when it prepares its 2nd draft proposal at its F2F meeting in Paris.

I would once more urge you, as at the start, to propose if you are able some concrete ways the CCWG proposals could take account of you concerns? best Jordan -- Jordan Carter Chief Executive *InternetNZ* 04 495 2118 (office) | +64 21 442 649 (mob) jordan@internetnz.net.nz Skype: jordancarter *A better world through a better Internet *

On 8 July 2015 at 01:18, Avri Doria <avri@acm.org> wrote:

On 07-Jul-15 09:04, Jordan Carter wrote:

...

Your analysis above, to be sustainable, would surely have to explain why all the other member or shareholder organisations in the world "breach a fundamental principle of governance" - I regard such proposals as fulfilling a basic principle, that being one of accountability in a true sense of the Board to its stakeholders.

I think one of the keys here is in those cases, most of those organization are organization formed outside of the corporation. they are not parts of that organization. I think the parallel to stockholder corporations is problematic at best. For the most part, if a corpration ceases to exist, its stockholders continue to exist. If ICANN were to cease, I expect that the ACSO would also cease to exist. Also in a stockholder corpration, and shareholder can just leave and buy stock in another organization. I have trouble imagining how that works with a multistakeholder organization that needs to have an internal set of check and balances.

The stockholder analogy is poor if you are trying to read it in terms of the internal balance, but that isn't what I was using it for - it was to draw attention to the every day reality of Board members being accountable to external appointing entities. That's the way most of the world works. As for organisations in ICANN, I don't quite get the point but - all the participants in ICANN are individuals or organisations. If through some lunatic move the corporation was disestablished, the various communities that do DNS would still come together, and there would need to be a new vehicle created to be the legal home of DNS policy as ICANN is today. That's why I regard the dissolution idea as a total red herring...? You'd have to immediately re-create an organisation the same as the one you just dissolved...? J

avri

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It is worth exploring the extent to which pre-approval processes can be baked into ICANN's bylaws that con provide an acceptable level of assurance that the board and the community are on the same page on those two issues. I do not think we only need to explore rejection rights by the community on these two issues, but rather, we should also explore community pre-approval powers, and how far we can get with those under an Empowered Designator model. This is similar to how GTLD policy is supposed to be made under ICANN's existing bylaws. ICANN's existing bylaws provide that the policy is first approved by the GNSO Council before it is passed up to the board for final approval and adoption. The board can disregard the GNSO's approved plan, ONLY provided they follow a process laid out in the bylaws that requires a consultation and negotiation and working together to try to find mutual agreement. The problem we have today is that the bylaws are not enforceable against the board, so when the board violates this process, there isn't anything we can really do about it. But since we are creating the community power to enforce the bylaws, we would be able to require the ICANN board to abide by this bylaws process under the new and improved ICANN for budget and strat plan final decisions. This isn't a revolutionary idea, but rather bakes a community pre-approval process into the bylaws, which will have teeth. And it is only for these two more challenging rights, budget and strategic plan under empowered designator, where we need to consider using such a mechanism. At the end of the day, we'd get to the same place: board and community in agreement on these two important issues, but perhaps without all the upheaval and concern that membership model instills. Holly said on the call there isn't any reason we couldn't do it this way. So let's explore it and see if it gets us where we need to go. Thanks, Robin On Jul 7, 2015, at 6:46 AM, Alan Greenberg wrote:

Cherine, My understanding is that the designator model does not allow for budget approval, and if I am correct, #2 only applies to membership.

Alan

At 07/07/2015 02:45 AM, Cherine Chalaby wrote:

...

Dear Mathieu and the CCWG group,

In Buenos Aires, I attended most of the sessions on the CCWG proposal and made several comments. I wish to share these comments in writing with you and the accountability-cross-community group as you prepare for the F2F meeting in Paris. As I said in Buenos Aires, please do not take my comments as fierce criticism but more as constructive suggestions.

Let me start by saying that as a Director of the Board, I believe in (a) appropriate empowerment of the community within the multi-stakeholder model, (b) strengthening of the the bottom-up process, and (c) enhancing accountability without destabilising the security and stability of ICANN or introducing opportunities for capture.

In my personal capacity as a member of the community, I support the CWG proposal, but I have concerns that the CCWG draft proposal, discussed in Buenos Aires, could lead to three unintended consequences that could seriously damage ICANN in the long run. These unintended consequences apply to both the Membership model as well as the Designator (Hybrid) model.

Unintended Consequence 1: Weakening ICANN's Governance model

The CCWG has asserted that the ╲empowered community╡ will have control over the Board in the following areas: Strategic Plan, Operating Plan, Budget and Bylaws changes, fundamental or not. As a consequence, there will be no decision that the Board can make in those core fiduciary responsibilities that cannot be rejected or stopped by the proposed new community-empowerment mechanism.

The CCWG draft proposal indicates that the Board would always have the ability to exercise its own judgment after the community-empowerment mechanism makes its decisions. But the proposal also states that if the community-empowrment mechanism does not like what the Board has done, it can remove the Board individually or collectively. Hence, the new community-empowerment mechanism in fact has the ultimate power to control the activities of ICANN. While as a community member who believes in the bottom-up model, I support the principles behind this objective, I believe it is vitally important that these newly transferred powers are paired with the transfer of corresponding accountability. The CCWG proposal in effect creates two bodies ˆ one that is empowered (the community) and a separaate one that is accountable (the Board). This, in my view, breaches a fundamental principle of governance, weakens the overall structure of ICANN, and is not sustainable. Unintended Consequence 2: Threatening ICANN's financial stability

The CCWG draft proposal gives the community the right to reject the Board approved budget. I have not yet seen proposed mechanisms to prevent the following from happening:

(a) Budget paralysis, whereby members of the community will vote against each other rather than be accountable to each other. For example, given budget limitations, what will stop members from voting against funding projects that do not facilitate their personal interest. This could lead to a situation where the budget is never adopted or takes too long to adopt, therefore jeopardising ICANNâ•˙s ability to deliver on key commitments such as contractual compliance enforcement , including issues relating to enhanced consumer protections and enhanced IP and rights protections, and other initiatives important to the community. This budget paralysis could also risk the stable and continued funding of the IANA functions. That is why I suggested in Buenos Aires that a commitment to fund the IANA functions should be separated from this budgetary process and embodied in the ICANN Bylaws.

(b) Threat to the stability of the business environment in which many have invested and rely on ICANNâ•˙s ability to maintain, as under the new proposal, members of the community will have the right to reject the budget, but not a single member of the community will be accountable for the budget bottom line.

(c) Unfairness, where the financial needs of the minority will seldom be fulfilled because final budget decisions will be made as a result of a majority voting by members of the community who do not have an obligation to act in the collective interest of all stakeholders.

it is worth noting that the current budget process is robust and transparent and ensures that none of the above consequences can occur. It also ensures community participation and it can always be improved. Unintended Consequence 3: Dysfunctional Board

The CCWG draft proposal gives the community the right to remove an individual board member. The CCWG proposed mechanism for implementing this right will in my view lead to the creation of two classes of board members. Those that will act in sole the interest of the SO/AC that has elected them, and the others who will be free to act in the collective interest of all stakeholders. The threat of removal without significant justification runs the risk of having individual Board members fear the loss of their seats if they do not adhere to the wishes of the constituency from which they come. This could turn the Board into a representative body, or a parliament, i.e. a place where opposing interests clash and are reconciled, rather than the present situation in which all Board members are obligated to act as a body in the best interests of the overall organization.

Furthermore, Board deliberations and decisions would be at risk of being driven to a large extent by subjective goals and personal compromise.

I do not have concrete suggestions to prevent these unintended consequences from happening, but I sincerely hope that the CCWG takes my concerns into account when it prepares its 2nd draft proposal at its F2F meeting in Paris.

Thank you for listening.

Regards Cherine Chalaby

...

On 6 Jul 2015, at 22:10, Mathieu Weill <mathieu.weill@afnic.fr > wrote:

Dear Colleagues,

In anticipation of our call tomorrow, here are a few points outlining the current thinking about the face to face in Paris.

Goal of the meeting : 2 weeks before the publication of our second (and hopefully last) WS1 public comment the overarching goal will be to find the common views that will be detailed in our 2nd draft proposals. The expected outcome of the meeting is that we find common ground on most of, if not all the open discussions.

Agenda of the meeting : Our plans are to work 8.30-18.00 local time (CEST, UTC+2), with lunch break from 12.00 to 13.00.

Our plan is to define a topic based agenda, including : - WP3 proposals (emerging issues) - Community mechanism model (including thorough Q&A with lawyers) - modalities of of community mechanisms - Removal / recall Board members refinements - Government input related discussions (the BA GAC communiqué announced upcoming contributions before Paris) - IRP refinements

We might have to plan sessions on the most difficult topics on day 1 and on day 2 to enable consensus building.

Please let us know either on list or during the call tomorrow if you have specific suggestions or feedbacks regarding this plan for the meeting.

Best regards,

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Dear Cherine, Thank you very much for taking the time to articulate your concerns and share them openly on this list. This is very useful to achieve what we called for in Buenos Aires : a fruitful dialogue with mutual respect. Your points are very useful to highlight what we need to keep in mind and improve, including the communication about our proposals. The comments I make below are not CCWG comments, but rather personal thoughts about the purpose of Enhancing Icann's Accountability. Sometimes we get lost in the details of the mechanisms and tend to lose track of the reasons why we go through this process. That is why this note is not much about the mechanisms but rather the vision our group is developing. If you find it appropriate, feel free to share these comments with the rest of the Board. I am certain that the concerns you raise are shared by other Board members, and it is certainly valuable to have this dialogue with the whole Board. Unintended Consequence 1: Weakening ICANN's Governance model ? The headline of this section highlights the difference of perspective one can have of Icann's Governance model. I believe personnaly that the empowered community strengthens Icann's Governance model by setting up a *mutual accountability* between the Board and the Community, instead of the currrent model where the Board is fully empowered on all issues : it has the last word on Bylaws, budgets, policies, disputes, etc. The only *perceived* backstop is the NTIA, thanks to the leverage provided by the IANA contract and the AoC. It is true that the CCWG proposals have focused so far on providing more powers to the Community. But I insist the underlying model is about mutual accountability, separation of powers. The community holds the Board accountable through this limited but powerful set of rights ; the Board is still in charge of running the corporations and holds SO and ACs accountable in terms of policy making or structural improvements. SO/AC accountability is an item of work we are currently investigating further, taking into account the comments we have received so far. So both bodies are selected by the community, both bodies must be accountable, both bodies pursue the same Purpose, which is the Purpose of the organisation. The big change is that they are mutually accountable and powers are shared. Unintended Consequence 2: Threatening ICANN's financial stability ? In this section you mention three threats : budget paralysis, instability of the business environment and unfairness to minority interests. As a reminder the current proposal would enable the community, if a SO/AC approved a petition against a budget or strategic plan, to vote on this budget. Only if 2/3 of the communitty votes against the budget or strategic plan would it be rejected. This means that a budget that would secure support from only 1/3 of the community would not be blocked. We are aware of the need to review our proposals to mitigate any risk of budget paralysis, and provide more details on the continuity measures in case a budget would be rejected. Just like the Board usually asks to be trusted by the Community, I guess we should also consider the opposite : can we seriously imagine a situation where more than 2/3 of the community would become so obsessed with their respective "pet" projects that they would jeopardize Icann's stability ? Does a strategic plan or budget that gets less than 33% support deserve to be carried forward ? There needs to be a balance found, and I am confident this can be achieved. Regarding business environment stability I must admit I can't really see how our proposals are degrading the current situation. Icann policy decisions often are decried as creating instability for business, I have difficulties anticipating that budget decisions by themselves would have such an impact ? And with regards to unfairness for a minority, I believe your point raises a fundamental question : should Icann be funding anything "for the benefit of a minority" if the rest of the community disagrees ? If Icann decisions are based on consensus and aim at fulfilling a common purpose, then I would argue that no project should raise opposition by 2 thirds of the community, even though direct beneficiaries might be a subset of stakeholders only. In conclusion on this point, budgets and strategic plans are tough, and I know that. Especially in the multistakeholder environment where bottom up is key. And it is a key responsibility for the Board to define these plans and budgets not only so that they enable continuity of operations, but also so that they are supported by the community. This means that the Board needs to ensure, not only that it takes input into account but also that it gets buy-in. This is in my opinion, what our proposals will enable to achieve : greater alignment behind the strategy and budgets, for the benefit of the Purpose of Icann. Unintended Consequence 3: Dysfunctional Board ? Your concern is that the threat of removal of Board members without justification would lead to Board members fearing the loss of their seats if they do not adhere to the wishes of the constituency which appointed them. This concern has been raised by others in our public comment and we have launched additional work to see how best to address this. While I agree with you that a Board that would function as a representative body would not be appropriate, I also have to question whether a Board functioning on the basis of the addition of 16+ individual views (which are also subjective and certainly have no way to exclude some personal agendas) would be more, or less, appropriate to ensure that Icann fulfills its Mission. I see no contradiction between the Board being a place for debates, sometimes clashes, then reconciliation behind a common goal, and the fact that the Board would then act as a body in the interest of the Purpose of the organization (note that I am not mentioning the the interest of the organization itself but its purpose here). You have more experience than I have, but it seems to me that most Boards across the globe acknowledge the fact that shareholders (or stakeholders) appoint Board members, that some of these Board members take the interests of certain shareholders to heart, and that they can be removed at will. To my knowlege this is the situation in most corporations, as well as in many membership organizations. Being a Board member is not a "regular" job. It is always a service, to a company, to a community, and it is not always rewarding : the CEO gets the media attention and fancy presentations when everything's ok while you work in the background, and the Board members are liable, and people turn to them when things go wrong. I believe accepting the fact that one can be removed at any time would actually enhance Board member's ability to contribute : it reminds everyone out of the Board that THEY appointed you, and could remove you if need be. And until then, you are doing your best to serve the Purpose of Icann. To conclude, I hope we can pursue this dialogue and, at the same time, focus our efforts to deliver proposals in time. We need Board members inputs, we also need your support and efforts to get to a point of consensus that is sufficient to get approval in Dublin. There is no question to me that we are all in this together, trying to demonstrate the value of the multistakeholder model and its ability to "up its game" to face the challenge of the transition. This implies that we all, co-chairs, members, leaders of Icann, feel accountable to reaching consensus. Best, Mathieu PS: For full disclosure, I acknowledge that in my role as co Chair of the CCWG-Accountability I can be removed without cause at any point (some argue that I should say "be relieved") ;-) Le 07/07/2015 08:45, Cherine Chalaby a écrit :

Dear Mathieu and the CCWG group,

In Buenos Aires, I attended most of the sessions on the CCWG proposal and made several comments. I wish to share these comments in writing with you and the accountability-cross-community group as you prepare for the F2F meeting in Paris. As I said in Buenos Aires, please do not take my comments as fierce criticism but more as constructive suggestions.

Let me start by saying that as a Director of the Board, I believe in (a) appropriate empowerment of the community within the multi-stakeholder model, (b) strengthening of the the bottom-up process, and (c) enhancing accountability without destabilising the security and stability of ICANN or introducing opportunities for capture.

In my personal capacity as a member of the community, I support the CWG proposal, but I have concerns that the CCWG draft proposal, discussed in Buenos Aires, could lead to three unintended consequences that could seriously damage ICANN in the long run. These unintended consequences apply to both the Membership model as well as the Designator (Hybrid) model.

_*Unintended Consequence 1: Weakening ICANN's Governance model*_

The CCWG has asserted that the “empowered community” will have control over the Board in the following areas: Strategic Plan, Operating Plan, Budget and Bylaws changes, fundamental or not. As a consequence, there will be no decision that the Board can make in those core fiduciary responsibilities that cannot be rejected or stopped by the proposed new community-empowerment mechanism.

The CCWG draft proposal indicates that the Board would always have the ability to exercise its own judgment after the community-empowerment mechanism makes its decisions. But the proposal also states that if the community-empowrment mechanism does not like what the Board has done, it can remove the Board individually or collectively. Hence, the new community-empowerment mechanism in fact has the ultimate power to control the activities of ICANN. While as a community member who believes in the bottom-up model, I support the principles behind this objective, I believe it is vitally important that these newly transferred powers are paired with the transfer of corresponding accountability. The CCWG proposal in effect creates two bodies – one that is empowered (the community) and a separate one that is accountable (the Board). This, in my view, breaches a fundamental principle of governance, weakens the overall structure of ICANN, and is not sustainable.

_*Unintended Consequence 2: Threatening ICANN's financial stability *_

The CCWG draft proposal gives the community the right to reject the Board approved budget. I have not yet seen proposed mechanisms to prevent the following from happening:

(a) Budget paralysis, whereby members of the community will vote against each other rather than be accountable to each other. For example, given budget limitations, what will stop members from voting against funding projects that do not facilitate their personal interest. This could lead to a situation where the budget is never adopted or takes too long to adopt, therefore jeopardising ICANN’s ability to deliver on key commitments such as contractual compliance enforcement , including issues relating to enhanced consumer protections and enhanced IP and rights protections, and other initiatives important to the community. This budget paralysis could also risk the stable and continued funding of the IANA functions. That is why I suggested in Buenos Aires that a commitment to fund the IANA functions should be separated from this budgetary process and embodied in the ICANN Bylaws.

(b) Threat to the stability of the business environment in which many have invested and rely on ICANN’s ability to maintain, as under the new proposal, members of the community will have the right to reject the budget, but not a single member of the community will be accountable for the budget bottom line.

(c) Unfairness, where the financial needs of the minority will seldom be fulfilled because final budget decisions will be made as a result of a majority voting by members of the community who do not have an obligation to act in the collective interest of all stakeholders.

it is worth noting that the current budget process is robust and transparent and ensures that none of the above consequences can occur. It also ensures community participation and it can always be improved.

*_Unintended Consequence 3: Dysfunctional Board_*

The CCWG draft proposal gives the community the right to remove an individual board member. The CCWG proposed mechanism for implementing this right will in my view lead to the creation of two classes of board members. Those that will act in sole the interest of the SO/AC that has elected them, and the others who will be free to act in the collective interest of all stakeholders. The threat of removal without significant justification runs the risk of having individual Board members fear the loss of their seats if they do not adhere to the wishes of the constituency from which they come. This could turn the Board into a representative body, or a parliament, i.e. a place where opposing interests clash and are reconciled, rather than the present situation in which all Board members are obligated to act as a body in the best interests of the overall organization.

Furthermore, Board deliberations and decisions would be at risk of being driven to a large extent by subjective goals and personal compromise.

I do not have concrete suggestions to prevent these unintended consequences from happening, but I sincerely hope that the CCWG takes my concerns into account when it prepares its 2nd draft proposal at its F2F meeting in Paris.

Thank you for listening.

Regards Cherine Chalaby

...

On 6 Jul 2015, at 22:10, Mathieu Weill <mathieu.weill@afnic.fr <mailto:mathieu.weill@afnic.fr>> wrote:

Dear Colleagues,

In anticipation of our call tomorrow, here are a few points outlining the current thinking about the face to face in Paris.

Goal of the meeting : 2 weeks before the publication of our second (and hopefully last) WS1 public comment the overarching goal will be to find the common views that will be detailed in our 2nd draft proposals. The expected outcome of the meeting is that we find common ground on most of, if not all the open discussions.

Agenda of the meeting : Our plans are to work 8.30-18.00 local time (CEST, UTC+2), with lunch break from 12.00 to 13.00.

Our plan is to define a topic based agenda, including : - WP3 proposals (emerging issues) - Community mechanism model (including thorough Q&A with lawyers) - modalities of of community mechanisms - Removal / recall Board members refinements - Government input related discussions (the BA GAC communiqué announced upcoming contributions before Paris) - IRP refinements

We might have to plan sessions on the most difficult topics on day 1 and on day 2 to enable consensus building.

Please let us know either on list or during the call tomorrow if you have specific suggestions or feedbacks regarding this plan for the meeting.

Best regards,

-- ***************************** Mathieu WEILL AFNIC - directeur général Tél: +33 1 39 30 83 06 mathieu.weill@afnic.fr <mailto:mathieu.weill@afnic.fr> Twitter : @mathieuweill *****************************

_______________________________________________ Accountability-Cross-Community mailing list Accountability-Cross-Community@icann.org https://mm.icann.org/mailman/listinfo/accountability-cross-community

-- ***************************** Mathieu WEILL AFNIC - directeur général Tél: +33 1 39 30 83 06 mathieu.weill@afnic.fr Twitter : @mathieuweill *****************************

I fully support Mathieu’s points. Exceptionally well said. Regards, Keith From: accountability-cross-community-bounces@icann.org [mailto:accountability-cross-community-bounces@icann.org] On Behalf Of Mathieu Weill Sent: Wednesday, July 08, 2015 7:41 AM To: Cherine Chalaby Cc: accountability-cross-community@icann.org Subject: Re: [CCWG-ACCT] Unintended Consequences of the CCWG proposal Dear Cherine, Thank you very much for taking the time to articulate your concerns and share them openly on this list. This is very useful to achieve what we called for in Buenos Aires : a fruitful dialogue with mutual respect. Your points are very useful to highlight what we need to keep in mind and improve, including the communication about our proposals. The comments I make below are not CCWG comments, but rather personal thoughts about the purpose of Enhancing Icann's Accountability. Sometimes we get lost in the details of the mechanisms and tend to lose track of the reasons why we go through this process. That is why this note is not much about the mechanisms but rather the vision our group is developing. If you find it appropriate, feel free to share these comments with the rest of the Board. I am certain that the concerns you raise are shared by other Board members, and it is certainly valuable to have this dialogue with the whole Board. Unintended Consequence 1: Weakening ICANN's Governance model ? The headline of this section highlights the difference of perspective one can have of Icann's Governance model. I believe personnaly that the empowered community strengthens Icann's Governance model by setting up a *mutual accountability* between the Board and the Community, instead of the currrent model where the Board is fully empowered on all issues : it has the last word on Bylaws, budgets, policies, disputes, etc. The only *perceived* backstop is the NTIA, thanks to the leverage provided by the IANA contract and the AoC. It is true that the CCWG proposals have focused so far on providing more powers to the Community. But I insist the underlying model is about mutual accountability, separation of powers. The community holds the Board accountable through this limited but powerful set of rights ; the Board is still in charge of running the corporations and holds SO and ACs accountable in terms of policy making or structural improvements. SO/AC accountability is an item of work we are currently investigating further, taking into account the comments we have received so far. So both bodies are selected by the community, both bodies must be accountable, both bodies pursue the same Purpose, which is the Purpose of the organisation. The big change is that they are mutually accountable and powers are shared. Unintended Consequence 2: Threatening ICANN's financial stability ? In this section you mention three threats : budget paralysis, instability of the business environment and unfairness to minority interests. As a reminder the current proposal would enable the community, if a SO/AC approved a petition against a budget or strategic plan, to vote on this budget. Only if 2/3 of the communitty votes against the budget or strategic plan would it be rejected. This means that a budget that would secure support from only 1/3 of the community would not be blocked. We are aware of the need to review our proposals to mitigate any risk of budget paralysis, and provide more details on the continuity measures in case a budget would be rejected. Just like the Board usually asks to be trusted by the Community, I guess we should also consider the opposite : can we seriously imagine a situation where more than 2/3 of the community would become so obsessed with their respective "pet" projects that they would jeopardize Icann's stability ? Does a strategic plan or budget that gets less than 33% support deserve to be carried forward ? There needs to be a balance found, and I am confident this can be achieved. Regarding business environment stability I must admit I can't really see how our proposals are degrading the current situation. Icann policy decisions often are decried as creating instability for business, I have difficulties anticipating that budget decisions by themselves would have such an impact ? And with regards to unfairness for a minority, I believe your point raises a fundamental question : should Icann be funding anything "for the benefit of a minority" if the rest of the community disagrees ? If Icann decisions are based on consensus and aim at fulfilling a common purpose, then I would argue that no project should raise opposition by 2 thirds of the community, even though direct beneficiaries might be a subset of stakeholders only. In conclusion on this point, budgets and strategic plans are tough, and I know that. Especially in the multistakeholder environment where bottom up is key. And it is a key responsibility for the Board to define these plans and budgets not only so that they enable continuity of operations, but also so that they are supported by the community. This means that the Board needs to ensure, not only that it takes input into account but also that it gets buy-in. This is in my opinion, what our proposals will enable to achieve : greater alignment behind the strategy and budgets, for the benefit of the Purpose of Icann. Unintended Consequence 3: Dysfunctional Board ? Your concern is that the threat of removal of Board members without justification would lead to Board members fearing the loss of their seats if they do not adhere to the wishes of the constituency which appointed them. This concern has been raised by others in our public comment and we have launched additional work to see how best to address this. While I agree with you that a Board that would function as a representative body would not be appropriate, I also have to question whether a Board functioning on the basis of the addition of 16+ individual views (which are also subjective and certainly have no way to exclude some personal agendas) would be more, or less, appropriate to ensure that Icann fulfills its Mission. I see no contradiction between the Board being a place for debates, sometimes clashes, then reconciliation behind a common goal, and the fact that the Board would then act as a body in the interest of the Purpose of the organization (note that I am not mentioning the the interest of the organization itself but its purpose here). You have more experience than I have, but it seems to me that most Boards across the globe acknowledge the fact that shareholders (or stakeholders) appoint Board members, that some of these Board members take the interests of certain shareholders to heart, and that they can be removed at will. To my knowlege this is the situation in most corporations, as well as in many membership organizations. Being a Board member is not a "regular" job. It is always a service, to a company, to a community, and it is not always rewarding : the CEO gets the media attention and fancy presentations when everything's ok while you work in the background, and the Board members are liable, and people turn to them when things go wrong. I believe accepting the fact that one can be removed at any time would actually enhance Board member's ability to contribute : it reminds everyone out of the Board that THEY appointed you, and could remove you if need be. And until then, you are doing your best to serve the Purpose of Icann. To conclude, I hope we can pursue this dialogue and, at the same time, focus our efforts to deliver proposals in time. We need Board members inputs, we also need your support and efforts to get to a point of consensus that is sufficient to get approval in Dublin. There is no question to me that we are all in this together, trying to demonstrate the value of the multistakeholder model and its ability to "up its game" to face the challenge of the transition. This implies that we all, co-chairs, members, leaders of Icann, feel accountable to reaching consensus. Best, Mathieu PS: For full disclosure, I acknowledge that in my role as co Chair of the CCWG-Accountability I can be removed without cause at any point (some argue that I should say "be relieved") ;-) Le 07/07/2015 08:45, Cherine Chalaby a écrit : Dear Mathieu and the CCWG group, In Buenos Aires, I attended most of the sessions on the CCWG proposal and made several comments. I wish to share these comments in writing with you and the accountability-cross-community group as you prepare for the F2F meeting in Paris. As I said in Buenos Aires, please do not take my comments as fierce criticism but more as constructive suggestions. Let me start by saying that as a Director of the Board, I believe in (a) appropriate empowerment of the community within the multi-stakeholder model, (b) strengthening of the the bottom-up process, and (c) enhancing accountability without destabilising the security and stability of ICANN or introducing opportunities for capture. In my personal capacity as a member of the community, I support the CWG proposal, but I have concerns that the CCWG draft proposal, discussed in Buenos Aires, could lead to three unintended consequences that could seriously damage ICANN in the long run. These unintended consequences apply to both the Membership model as well as the Designator (Hybrid) model. Unintended Consequence 1: Weakening ICANN's Governance model The CCWG has asserted that the “empowered community” will have control over the Board in the following areas: Strategic Plan, Operating Plan, Budget and Bylaws changes, fundamental or not. As a consequence, there will be no decision that the Board can make in those core fiduciary responsibilities that cannot be rejected or stopped by the proposed new community-empowerment mechanism. The CCWG draft proposal indicates that the Board would always have the ability to exercise its own judgment after the community-empowerment mechanism makes its decisions. But the proposal also states that if the community-empowrment mechanism does not like what the Board has done, it can remove the Board individually or collectively. Hence, the new community-empowerment mechanism in fact has the ultimate power to control the activities of ICANN. While as a community member who believes in the bottom-up model, I support the principles behind this objective, I believe it is vitally important that these newly transferred powers are paired with the transfer of corresponding accountability. The CCWG proposal in effect creates two bodies – one that is empowered (the community) and a separate one that is accountable (the Board). This, in my view, breaches a fundamental principle of governance, weakens the overall structure of ICANN, and is not sustainable. Unintended Consequence 2: Threatening ICANN's financial stability The CCWG draft proposal gives the community the right to reject the Board approved budget. I have not yet seen proposed mechanisms to prevent the following from happening: (a) Budget paralysis, whereby members of the community will vote against each other rather than be accountable to each other. For example, given budget limitations, what will stop members from voting against funding projects that do not facilitate their personal interest. This could lead to a situation where the budget is never adopted or takes too long to adopt, therefore jeopardising ICANN’s ability to deliver on key commitments such as contractual compliance enforcement , including issues relating to enhanced consumer protections and enhanced IP and rights protections, and other initiatives important to the community. This budget paralysis could also risk the stable and continued funding of the IANA functions. That is why I suggested in Buenos Aires that a commitment to fund the IANA functions should be separated from this budgetary process and embodied in the ICANN Bylaws. (b) Threat to the stability of the business environment in which many have invested and rely on ICANN’s ability to maintain, as under the new proposal, members of the community will have the right to reject the budget, but not a single member of the community will be accountable for the budget bottom line. (c) Unfairness, where the financial needs of the minority will seldom be fulfilled because final budget decisions will be made as a result of a majority voting by members of the community who do not have an obligation to act in the collective interest of all stakeholders. it is worth noting that the current budget process is robust and transparent and ensures that none of the above consequences can occur. It also ensures community participation and it can always be improved. Unintended Consequence 3: Dysfunctional Board The CCWG draft proposal gives the community the right to remove an individual board member. The CCWG proposed mechanism for implementing this right will in my view lead to the creation of two classes of board members. Those that will act in sole the interest of the SO/AC that has elected them, and the others who will be free to act in the collective interest of all stakeholders. The threat of removal without significant justification runs the risk of having individual Board members fear the loss of their seats if they do not adhere to the wishes of the constituency from which they come. This could turn the Board into a representative body, or a parliament, i.e. a place where opposing interests clash and are reconciled, rather than the present situation in which all Board members are obligated to act as a body in the best interests of the overall organization. Furthermore, Board deliberations and decisions would be at risk of being driven to a large extent by subjective goals and personal compromise. I do not have concrete suggestions to prevent these unintended consequences from happening, but I sincerely hope that the CCWG takes my concerns into account when it prepares its 2nd draft proposal at its F2F meeting in Paris. Thank you for listening. Regards Cherine Chalaby On 6 Jul 2015, at 22:10, Mathieu Weill <mathieu.weill@afnic.fr<mailto:mathieu.weill@afnic.fr>> wrote: Dear Colleagues, In anticipation of our call tomorrow, here are a few points outlining the current thinking about the face to face in Paris. Goal of the meeting : 2 weeks before the publication of our second (and hopefully last) WS1 public comment the overarching goal will be to find the common views that will be detailed in our 2nd draft proposals. The expected outcome of the meeting is that we find common ground on most of, if not all the open discussions. Agenda of the meeting : Our plans are to work 8.30-18.00 local time (CEST, UTC+2), with lunch break from 12.00 to 13.00. Our plan is to define a topic based agenda, including : - WP3 proposals (emerging issues) - Community mechanism model (including thorough Q&A with lawyers) - modalities of of community mechanisms - Removal / recall Board members refinements - Government input related discussions (the BA GAC communiqué announced upcoming contributions before Paris) - IRP refinements We might have to plan sessions on the most difficult topics on day 1 and on day 2 to enable consensus building. Please let us know either on list or during the call tomorrow if you have specific suggestions or feedbacks regarding this plan for the meeting. Best regards, -- ***************************** Mathieu WEILL AFNIC - directeur général Tél: +33 1 39 30 83 06 mathieu.weill@afnic.fr<mailto:mathieu.weill@afnic.fr> Twitter : @mathieuweill ***************************** _______________________________________________ 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 -- ***************************** Mathieu WEILL AFNIC - directeur général Tél: +33 1 39 30 83 06 mathieu.weill@afnic.fr<mailto:mathieu.weill@afnic.fr> Twitter : @mathieuweill *****************************

I agree, well put. On 7/8/2015 4:27 PM, Burr, Becky wrote:

+1

J. Beckwith Burr

*Neustar, Inc. /* Deputy General Counsel and Chief Privacy Officer

1775 Pennsylvania Avenue NW, Washington, DC 20006

Office: + 1.202.533.2932 Mobile: +1.202.352.6367 / becky.burr@neustar.biz <mailto:becky.burr@neustar.biz> / www.neustar.biz

From: <Drazek>, Keith Drazek <kdrazek@verisign.com <mailto:kdrazek@verisign.com>> Date: Wednesday, July 8, 2015 at 8:08 AM To: "Mathieu.Weill@afnic.fr <mailto:Mathieu.Weill@afnic.fr>" <Mathieu.Weill@afnic.fr <mailto:Mathieu.Weill@afnic.fr>>, "cherine.chalaby@icann.org <mailto:cherine.chalaby@icann.org>" <cherine.chalaby@icann.org <mailto:cherine.chalaby@icann.org>> Cc: Accountability Community <accountability-cross-community@icann.org <mailto:accountability-cross-community@icann.org>> Subject: Re: [CCWG-ACCT] Unintended Consequences of the CCWG proposal

I fully support Mathieu’s points. Exceptionally well said.

Regards,

Keith

*From:*accountability-cross-community-bounces@icann.org <mailto:accountability-cross-community-bounces@icann.org> [mailto:accountability-cross-community-bounces@icann.org] *On Behalf Of *Mathieu Weill *Sent:* Wednesday, July 08, 2015 7:41 AM *To:* Cherine Chalaby *Cc:* accountability-cross-community@icann.org <mailto:accountability-cross-community@icann.org> *Subject:* Re: [CCWG-ACCT] Unintended Consequences of the CCWG proposal

Dear Cherine,

Thank you very much for taking the time to articulate your concerns and share them openly on this list. This is very useful to achieve what we called for in Buenos Aires : a fruitful dialogue with mutual respect. Your points are very useful to highlight what we need to keep in mind and improve, including the communication about our proposals.

The comments I make below are not CCWG comments, but rather personal thoughts about the purpose of Enhancing Icann's Accountability. Sometimes we get lost in the details of the mechanisms and tend to lose track of the reasons why we go through this process. That is why this note is not much about the mechanisms but rather the vision our group is developing.

If you find it appropriate, feel free to share these comments with the rest of the Board. I am certain that the concerns you raise are shared by other Board members, and it is certainly valuable to have this dialogue with the whole Board.

Unintended Consequence 1: Weakening ICANN's Governance model ?

The headline of this section highlights the difference of perspective one can have of Icann's Governance model. I believe personnaly that the empowered community strengthens Icann's Governance model by setting up a *mutual accountability* between the Board and the Community, instead of the currrent model where the Board is fully empowered on all issues : it has the last word on Bylaws, budgets, policies, disputes, etc. The only *perceived* backstop is the NTIA, thanks to the leverage provided by the IANA contract and the AoC.

It is true that the CCWG proposals have focused so far on providing more powers to the Community. But I insist the underlying model is about mutual accountability, separation of powers. The community holds the Board accountable through this limited but powerful set of rights ; the Board is still in charge of running the corporations and holds SO and ACs accountable in terms of policy making or structural improvements. SO/AC accountability is an item of work we are currently investigating further, taking into account the comments we have received so far.

So both bodies are selected by the community, both bodies must be accountable, both bodies pursue the same Purpose, which is the Purpose of the organisation. The big change is that they are mutually accountable and powers are shared.

Unintended Consequence 2: Threatening ICANN's financial stability ?

In this section you mention three threats : budget paralysis, instability of the business environment and unfairness to minority interests. As a reminder the current proposal would enable the community, if a SO/AC approved a petition against a budget or strategic plan, to vote on this budget. Only if 2/3 of the communitty votes against the budget or strategic plan would it be rejected. This means that a budget that would secure support from only 1/3 of the community would not be blocked.

We are aware of the need to review our proposals to mitigate any risk of budget paralysis, and provide more details on the continuity measures in case a budget would be rejected. Just like the Board usually asks to be trusted by the Community, I guess we should also consider the opposite : can we seriously imagine a situation where more than 2/3 of the community would become so obsessed with their respective "pet" projects that they would jeopardize Icann's stability ? Does a strategic plan or budget that gets less than 33% support deserve to be carried forward ? There needs to be a balance found, and I am confident this can be achieved.

Regarding business environment stability I must admit I can't really see how our proposals are degrading the current situation. Icann policy decisions often are decried as creating instability for business, I have difficulties anticipating that budget decisions by themselves would have such an impact ?

And with regards to unfairness for a minority, I believe your point raises a fundamental question : should Icann be funding anything "for the benefit of a minority" if the rest of the community disagrees ? If Icann decisions are based on consensus and aim at fulfilling a common purpose, then I would argue that no project should raise opposition by 2 thirds of the community, even though direct beneficiaries might be a subset of stakeholders only.

In conclusion on this point, budgets and strategic plans are tough, and I know that. Especially in the multistakeholder environment where bottom up is key. And it is a key responsibility for the Board to define these plans and budgets not only so that they enable continuity of operations, but also so that they are supported by the community. This means that the Board needs to ensure, not only that it takes input into account but also that it gets buy-in. This is in my opinion, what our proposals will enable to achieve : greater alignment behind the strategy and budgets, for the benefit of the Purpose of Icann.

Unintended Consequence 3: Dysfunctional Board ?

Your concern is that the threat of removal of Board members without justification would lead to Board members fearing the loss of their seats if they do not adhere to the wishes of the constituency which appointed them. This concern has been raised by others in our public comment and we have launched additional work to see how best to address this.

While I agree with you that a Board that would function as a representative body would not be appropriate, I also have to question whether a Board functioning on the basis of the addition of 16+ individual views (which are also subjective and certainly have no way to exclude some personal agendas) would be more, or less, appropriate to ensure that Icann fulfills its Mission. I see no contradiction between the Board being a place for debates, sometimes clashes, then reconciliation behind a common goal, and the fact that the Board would then act as a body in the interest of the Purpose of the organization (note that I am not mentioning the the interest of the organization itself but its purpose here).

You have more experience than I have, but it seems to me that most Boards across the globe acknowledge the fact that shareholders (or stakeholders) appoint Board members, that some of these Board members take the interests of certain shareholders to heart, and that they can be removed at will. To my knowlege this is the situation in most corporations, as well as in many membership organizations.

Being a Board member is not a "regular" job. It is always a service, to a company, to a community, and it is not always rewarding : the CEO gets the media attention and fancy presentations when everything's ok while you work in the background, and the Board members are liable, and people turn to them when things go wrong. I believe accepting the fact that one can be removed at any time would actually enhance Board member's ability to contribute : it reminds everyone out of the Board that THEY appointed you, and could remove you if need be. And until then, you are doing your best to serve the Purpose of Icann.

To conclude, I hope we can pursue this dialogue and, at the same time, focus our efforts to deliver proposals in time. We need Board members inputs, we also need your support and efforts to get to a point of consensus that is sufficient to get approval in Dublin. There is no question to me that we are all in this together, trying to demonstrate the value of the multistakeholder model and its ability to "up its game" to face the challenge of the transition. This implies that we all, co-chairs, members, leaders of Icann, feel accountable to reaching consensus.

Best, Mathieu PS: For full disclosure, I acknowledge that in my role as co Chair of the CCWG-Accountability I can be removed without cause at any point (some argue that I should say "be relieved") ;-)

Le 07/07/2015 08:45, Cherine Chalaby a écrit :

Dear Mathieu and the CCWG group,

In Buenos Aires, I attended most of the sessions on the CCWG proposal and made several comments. I wish to share these comments in writing with you and the accountability-cross-community group as you prepare for the F2F meeting in Paris. As I said in Buenos Aires, please do not take my comments as fierce criticism but more as constructive suggestions.

Let me start by saying that as a Director of the Board, I believe in (a) appropriate empowerment of the community within the multi-stakeholder model, (b) strengthening of the the bottom-up process, and (c) enhancing accountability without destabilising the security and stability of ICANN or introducing opportunities for capture.

In my personal capacity as a member of the community, I support the CWG proposal, but I have concerns that the CCWG draft proposal, discussed in Buenos Aires, could lead to three unintended consequences that could seriously damage ICANN in the long run. These unintended consequences apply to both the Membership model as well as the Designator (Hybrid) model.

*_Unintended Consequence 1: Weakening ICANN's Governance model_*

The CCWG has asserted that the “empowered community” will have control over the Board in the following areas: Strategic Plan, Operating Plan, Budget and Bylaws changes, fundamental or not. As a consequence, there will be no decision that the Board can make in those core fiduciary responsibilities that cannot be rejected or stopped by the proposed new community-empowerment mechanism.

The CCWG draft proposal indicates that the Board would always have the ability to exercise its own judgment after the community-empowerment mechanism makes its decisions. But the proposal also states that if the community-empowrment mechanism does not like what the Board has done, it can remove the Board individually or collectively. Hence, the new community-empowerment mechanism in fact has the ultimate power to control the activities of ICANN. While as a community member who believes in the bottom-up model, I support the principles behind this objective, I believe it is vitally important that these newly transferred powers are paired with the transfer of corresponding accountability. The CCWG proposal in effect creates two bodies – one that is empowered (the community) and a separate one that is accountable (the Board). This, in my view, breaches a fundamental principle of governance, weakens the overall structure of ICANN, and is not sustainable.

*_Unintended Consequence 2: Threatening ICANN's financial stability _*

The CCWG draft proposal gives the community the right to reject the Board approved budget. I have not yet seen proposed mechanisms to prevent the following from happening:

(a) Budget paralysis, whereby members of the community will vote against each other rather than be accountable to each other. For example, given budget limitations, what will stop members from voting against funding projects that do not facilitate their personal interest. This could lead to a situation where the budget is never adopted or takes too long to adopt, therefore jeopardising ICANN’s ability to deliver on key commitments such as contractual compliance enforcement , including issues relating to enhanced consumer protections and enhanced IP and rights protections, and other initiatives important to the community. This budget paralysis could also risk the stable and continued funding of the IANA functions. That is why I suggested in Buenos Aires that a commitment to fund the IANA functions should be separated from this budgetary process and embodied in the ICANN Bylaws.

(b) Threat to the stability of the business environment in which many have invested and rely on ICANN’s ability to maintain, as under the new proposal, members of the community will have the right to reject the budget, but not a single member of the community will be accountable for the budget bottom line.

(c) Unfairness, where the financial needs of the minority will seldom be fulfilled because final budget decisions will be made as a result of a majority voting by members of the community who do not have an obligation to act in the collective interest of all stakeholders.

it is worth noting that the current budget process is robust and transparent and ensures that none of the above consequences can occur. It also ensures community participation and it can always be improved.

*_Unintended Consequence 3: Dysfunctional Board_*

The CCWG draft proposal gives the community the right to remove an individual board member. The CCWG proposed mechanism for implementing this right will in my view lead to the creation of two classes of board members. Those that will act in sole the interest of the SO/AC that has elected them, and the others who will be free to act in the collective interest of all stakeholders. The threat of removal without significant justification runs the risk of having individual Board members fear the loss of their seats if they do not adhere to the wishes of the constituency from which they come. This could turn the Board into a representative body, or a parliament, i.e. a place where opposing interests clash and are reconciled, rather than the present situation in which all Board members are obligated to act as a body in the best interests of the overall organization.

Furthermore, Board deliberations and decisions would be at risk of being driven to a large extent by subjective goals and personal compromise.

I do not have concrete suggestions to prevent these unintended consequences from happening, but I sincerely hope that the CCWG takes my concerns into account when it prepares its 2nd draft proposal at its F2F meeting in Paris.

Thank you for listening.

Regards

Cherine Chalaby

On 6 Jul 2015, at 22:10, Mathieu Weill <mathieu.weill@afnic.fr <mailto:mathieu.weill@afnic.fr>> wrote:

Dear Colleagues,

In anticipation of our call tomorrow, here are a few points outlining the current thinking about the face to face in Paris.

Goal of the meeting : 2 weeks before the publication of our second (and hopefully last) WS1 public comment the overarching goal will be to find the common views that will be detailed in our 2nd draft proposals. The expected outcome of the meeting is that we find common ground on most of, if not all the open discussions.

Agenda of the meeting : Our plans are to work 8.30-18.00 local time (CEST, UTC+2), with lunch break from 12.00 to 13.00.

Our plan is to define a topic based agenda, including : - WP3 proposals (emerging issues) - Community mechanism model (including thorough Q&A with lawyers) - modalities of of community mechanisms - Removal / recall Board members refinements - Government input related discussions (the BA GAC communiqué announced upcoming contributions before Paris) - IRP refinements

We might have to plan sessions on the most difficult topics on day 1 and on day 2 to enable consensus building.

Please let us know either on list or during the call tomorrow if you have specific suggestions or feedbacks regarding this plan for the meeting.

Best regards,

-- ***************************** Mathieu WEILL AFNIC - directeur général Tél: +33 1 39 30 83 06 mathieu.weill@afnic.fr <mailto:mathieu.weill@afnic.fr> Twitter : @mathieuweill *****************************

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-- ***************************** Mathieu WEILL AFNIC - directeur général Tél: +33 1 39 30 83 06 mathieu.weill@afnic.fr <mailto:mathieu.weill@afnic.fr> Twitter : @mathieuweill *****************************

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