On 2/26/16 3:01 PM, Evan Leibovitch wrote:
In most ​jurisdictions in which I have been involved in the creation of nonprofits, the kind of member-less, mostly-unaccountable-Board that is the cornerstone of ICANN's present structure could not exist.
In California the memberless approach is intended for use by things like theatre companies that tend to reflect the artistic direction of a director.   The creation of ICANN intentionally mis-used the memberless approach (and we saw the legal scurrying when ICANN held the 2000 "selection" that was actually an "election" that triggers the mandatory use of a membership structure.)

However, a member based organization can be created - and often is created - in California.  The rules of membership organizations here are pretty decent.  And given that ICANN is already a California public-benefit/non-profit those rules would slide onto the organization like a well tailored glove.  Or to pick a different simile - moving ICANN (including its assets and contracts) to another jurisdiction and imposing these proposals would be somewhat like attaching a helicopter to El Capitan in Yosemite and trying to air lift it to Iceland - at best hard, more likely impossible.
In most other nonprofits in most other places where one exists, a Nominating Committee does exactly that
Nominating committees are troublesome, because one needs a solid legal structure to create them, populate them, run them, impose standards of care on the committee members, resolve disputes, and use their output.

The use of nominating committees is particularly ICANN-ish; it is not a common form of organization largely because they contain all of the structural issues of a board of directors.  In a sense they become simply a higher level board of super-directors.  And then one turns the recursion crank and ask "who nominates the nominating committee, and what if there is disagreement?"  One might think that there is no risk of competing panels each claiming to be "the nominating committee".  But world history has demonstrated that this thing can, and has, occurred.

-- nominate a slate that must be elected or ratified by some greater body. It is this body -- not the Board itself or the NomComm -- that determines the fiduciary duty and the good to be served.
Fiduciary duty is to the corporate body, period.  It is not levied onto a board or directors or individual directors by an outside body, particularly not by a nominating or electing body.  That duty of care to the corporate interest alone is a fairly primary foundational element of corporate structures.

That said, in public-benefit/non-profit corporations, such as ICANN the corporate interest is measured by how well the corporation improves the public interest.  That twist is something that is not well understood by most people who sit in board seats on public-benefit/non-profit corporations.

But let's be clear - a corporate director owes no fiduciary duty to follow the opinions of a nominating committee or a membership.  The entire duty of care is to the corporate interest (which in our case includes the public interest.)  Ethics, politics, and simple good sense indicate that those opinions should be heard and considered.  But, again, there is no duty to accept them or give them more weight than any other source of information.

One of the best ways to destroy a corporation is to create marionette strings in which parties such as shareholders or debt holders or members or nominating committee can affect the decisions of a board of directors.

That penetration of the corporate structure is the great danger that I see in these proposals.  The result of such a failure would be chaos.  It is foolish to consider proposals that contain that risk.  And these proposals do.

​I had never encountered the ability of a nonprofit to unilaterally shed itself of Board oversight by its members until ICANN.
ICANN does not have that ability.  It can not wave a wand and say that it does.  People should laugh (or as I did, take legal action) when ICANN makes such assertions.

But, unfortunately, people have accepted ICANN's assertions about membership.  It might legal action to dispel years of propaganda from the law firm that created ICANN and still serves ICANN (and is still makes a lot of money from ICANN.)

But the current effort at reform should use the current window of malleability to demand that ICANN adopt a membership structure.  But that membership structure should not be this silly (and probably not-viable) proposed system that is as overtly contrived as is ICANN's present form.

The California law of membership in public-benefit corporations is good, it is easy, it is apt.  It is such an obvious path that I remain astounded at the level of effort being expended trying to not follow it.

        --karl--