Dear Jonathan and CCWG colleagues, I hope that those of you traveling to Copenhagen have arrived safely and already enjoyed productive meetings. Before your FtF meeting tomorrow, I would like to raise a few comments regarding the message we received from the board. As I understand the memo is one of the items on the agenda, I do hope that my comments/requests for clarification are asked during the meeting. Comments below, in between lines, marked with ** at the beginning. I trust our co-chairs in Copenhagen or Marika, can be so kind to raise the points below during the meeting. Warm regards, Sylvia From: Steve Crocker [mailto:steve.crocker@board.icann.org] Sent: Friday, March 3, 2017 3:48 AM To: chiao@brandma.co; jrobinson@afilias.info Cc: marika.konings@icann.org; Lauren Allison <lauren.allison@icann.org>; Icann-board ICANN <icann-board@icann.org>; Board-Ops-Team@icann.org Subject: Board message to the CCWG-AP Dear CCWG-AP members, We are pleased to hear that the CCWG-AP is now starting its work on creating one or more proposals for the Board’s consideration and we wish this work well over the coming months. The Board wishes to convey the following. First, to confirm what I think is already well understood, the Board has chosen Asha Hemrajani and Becky Burr as the Board liaisons to the CCWG-AP. Both are experienced, thoughtful, conscientious and committed to working constructively with the CCWG-AP. We have set up an internal process to keep the Board informed and to channel any thoughts we have through Asha and Becky. Second, although I think it’s been mentioned more than once already, we mention again this process presents important legal and fiduciary constraints in relation to ICANN’s 501(c)3 status and the fiduciary responsibility of the ICANN Board of Directors and Officers. It is important that all those participating in this effort are well-aware of these limitations and I encourage careful review of the Legal and Fiduciary note ( https://community.icann.org/display/CWGONGAP/Legal+and+Fiduciary+Constraints...) that was submitted to the Drafting Team by the ICANN legal and finance teams as well as any ongoing notes/recommendations that ICANN staff may provide to the CCWG in the course of the CCWG’s work. Third, with respect to the cost of operation of the CCWG-AP, we emphasize the importance of the following items in supporting a successful, responsible, and productive process for all involved: * The CCWG has to be run as a project with proper budget and schedule. This should be based on a plan for the working group. * The auction proceeds remain curtained off until the next phase, i.e. an approved plan for distribution of the proceeds. The CCWG-AP is funded out of the ongoing budget. ** ICANN staff and our CCWG chairs have indicated that there is no budget associated to the CCWG activities, for meetings or external advice. However, an advisor has been hired and the 2 items above mentioned make it clear that there is in fact a budget allocation, and as such it is appropriate to have a plan. Can you please clarify what activities might be covered under this? That will help the group to come up with ideas and support the development of a working plan. Will the development of the working plan be lead by the co-chairs? Or how that plan is supposed to be organized? * Once a system is set up for distribution, the cost of administering the distribution of the funds will naturally come out of the auction proceeds. As a point of departure, the nominal goal for the overhead is no more than 5%. However, rather than focusing on a specific figure first, the output of the CCWG-AP should include in its proposal the mechanism and/or process for: ** Although having a low percetage for management seems like a great idea, that was in fact one of the questions tasked to the CCWG to work on. What is a reasonable overhead or administration costs percentage. As that entirely depends on what kind of mechanism is in place, and what reporting mechanisms and moniotring tools are in place, I think it is very premature to call on a specific number at this stage. * receiving, selecting and distributing the funds; * overseeing the funded projects; * properly reporting on the expenditures and projects in order to meet the community’s requirements for transparency and accountability. ** The 3 main activities listed above are clearly steering the conversation towards a grant mechanism, which might be one of many financial mechanisms that are available to make use of the funds without jeopardizing the tax exempt status. These was, once again, one of the questions for the CCWG to deliberate, based on some expert input around financial mechanisms available. For each of those, there will be different requirements and considerations so it is important not to get set on a grants for project support as the mechanism of choice, as there might be other mechanisms to explore. Fourth, the CCWG-AP must cast a wide net, not limited to just the existing SO and AC structures. ** My understanding is that this refers to the participants and observers of the group, which are a considerable number. Fifth, the focus should be on general principles and objectives. Choices of specific projects will be made in the next phase. ** Again, the mention of projects might limit the options availabile. It is important for the CCWG to consider all the different options to allocate the funding, that do not necessarily imply that ICANN allocated grants to projects. Sixth, to avoid conflicts of interest, there should be clear separation of those deciding general direction, those choosing specific projects and those receiving the funds. ** Absolutely. That is why the Drafting Team divided the work in 3 clear phases. One to draft the charter, one for the CCWG to seek answers to those questions and provide recommendations, and a final one for final allocation of funds. The memo raises this point, as if there was a possibility for the CCWG to make funding allocations, which we are not tasked to do. I believe this comment creates confusion among members and participants of the CCWG, which is unnecessary. We look forward to following your work and thank you in advance for the efforts of the CCWG-AP. Steve Crocker Chair, ICANN Board of Directors