Hello All, See below for information on the Board resolutions passed on 8 Dec 2011. Key areas of interest are: - update on applicant support for needy applicants - update on batching - approval of New Annex A/GNSO Policy Development Process - approval of Board Director compensation - extended conflict of policy to apply to new gTLDs From: http://www.icann.org/en/minutes/resolutions-08dec11-en.htm Approved Board Resolutions | Special Meeting of the ICANN Board 8 December 2011 * Note: Where available, draft Rationale of the Board's actions is presented under the associated Resolution. The draft Rationale is not final until approved with the minutes of the Board meeting. 1.New gTLDs1.1. Applicant Support Rationale for Resolutions 2011.12.08.01 – 2011.12.08.03 1.2. Batching Rationale for Resolutions 2011.12.08.04 – 2011.12.08.06 2.Consent Agenda2.1. Approval of Minutes of 22 October 2011 ICANN Board Meeting 2.2. Approval of Minutes of 28 October 2011 ICANN Regular Board Meeting 2.3. Approval of Minutes of 28 October 2011 ICANN Organizational Board Meeting 2.4. ccNSO Amendment to the Fast Track Implementation Plan Rationale for Resolution 2011.12.08.10 2.5. New Annex A/GNSO Policy Development Process Rationale for Resolution 2011.12.08.11 2.6. Changes to SSAC Membership 2.6.1 Thank You from Security and Stability Advisory Committee to John Schnizlein Rationale for Resolution 2011.12.08.12 2.6.2 SSAC Appointments – Don Blumenthal and Rod Rasmussen Rationale for Resolution 2011.12.08.13 3.ATRT Recommendation 5: Board Compensation Rationale for Resolutions 2011.12.08.14 – 2011.12.18 4.Board Member Rules on Conflicts of Interest for New gTLDs Rationale for Resolution 2011.12.08.19 1. New gTLDs Conflict of Interest Identification: Ram Mohan, Thomas Narten, Thomas Roessler, Bruce Tonkin, Suzanne Woolf and Kuo-Wei Wu did not participate in the deliberation of these items. 1.1. Applicant Support ======================= Whereas, the JAS WG had published its Final Report with recommendations for a program to provide support to applicants requiring financial assistance in applying for and operating new gTLDs. Whereas, a Board working group was formed during the Dakar ICANN Meeting (24-28 October 2011) to work with staff on an implementation model taking into account the JAS WG Final Report and timely implementation of program. Whereas, the Board considered and discussed potential implementation models taking into account the current New gTLD Program development stage and timing. It is hereby Resolved (2011.12.08.01), the Board directs staff to finalize the implementation plan in accordance with the proposed criteria and process for the launch of the Applicant Support Program in January 2012. Resolved (2011.12.08.02), the Board approves the fee reduction to $47,000 Applicant Support candidates that qualify according to the established criteria. Resolved (2011.12.08.03), the Board directs staff to amend the communications campaign as needed to incorporate the Applicant Support Program which should include the publication of a brief handbook. Rationale for Resolutions 2011.12.08.01 – 2011.12.08.03 Delaying the evaluation of financial support applications provides additional time to raise funds. It is intended that the determination of financial need is to be made in parallel with the first batch of “regular” new gTLD applications. If the financial assistance awards are not made until the end of the first batch of new gTLD evaluations, fundraising can operate until November 2012. Delaying also takes the recruitment of the financial assistance evaluation panel off of the critical path. In this new plan, the panel is not required until May 2012. The $138K fee reduction is meaningful in size and follows JAS and GAC recommendations. It is thought that providing a meaningful level of assistance to a fewer number of applicants is better than providing a small benefit to all those who qualify. Assistance is limited to the available funding, thereby mitigating risk. The criteria (demonstrating need and operating in the public benefit) follow JAS recommendations. Completed new gTLD applications are due at the same time the financial assistance applications are due. This will help ensure only serious participants apply for financial assistance. Those who do not meet the criteria threshold will be disqualified from the new gTLD process altogether and lose their $47K fee. This will help ensure only bona fide candidates for assistance will apply. Note: This process does not follow all JAS recommendations. In particular, the JAS recommendations state that the $2MM seed fund should not be used for fee reductions. The JAS intended the $2MM and other funds raised be paid out to needy and worthy applicants to help build out registries. 1.2. Batching ============== Resolved (2011.12.08.xx), the ICANN Board authorizes the President and CEO to develop a plan and propose to the community that a “secondary time stamp” be used for purposes of determining the processing order in the event that multiple batches of applications are to be processed under the New gTLD Program. A “secondary time stamp” would require applicants who are interested in participating in early batches to obtain a time-stamp through a designated process following the close of the application window. Resolved, (2011.12.08.04), there will be no preference given on the basis of whether an application is submitted in the beginning, middle or end of the application window. Resolved (2011.12.08.05), the Board will not approve a system that would include random selection process for determining the development of batches. Resolved (2011.12.08.06), the President and CEO is directed to add to the Applicant Guidebook that upon completion of the Board’s approval of a final designation of the operational details of the “secondary timestamp” batching process, the final plan will be added as a process within the Applicant Guidebook. Rationale for Resolutions 2011.12.08.04 – 2011.12.08.06 The best option from an operational and process management standpoint, random selection, is not available. It is likely to result in lawsuit based upon California law that makes operation of a lottery illegal in most cases. Even if a random selection process were determined to not be a lottery by a court, those seeking to discredit, delay or halt the process would file a lawsuit. The recommended option requires the development and implementation can be done outside of TAS and so not provide risk to the implementation of that complex system. There is judgment required on the part of the applicant, i.e., when to submit the secondary registration in order to increase the likelihood of prioritization in an earlier batch. One key to any mechanism is communications. Communications can be facilitated through TAS since applicants will have registered through the system. Concerns that European and North American participants might have an edge through greater participation in numbers and a higher level of process sophistication are addressed by rotating the award of priorities through every region. There are arguments against this but it is thought that this approach better promotes diversity. In the end, no application is denied consideration. Availability of an opt-out mechanism has been recommended several times in public comment. It will provide those entities that have elected to apply but not fully fleshed out business models time to consider the use of the TLD. Additionally, it will reduce the need and the importance of a batching mechanism. 2. Consent Agenda Resolved, the following resolutions in this Consent Agenda are approved: 2.1 Approval of Minutes of 22 October 2011 ICANN Board Meeting Resolved (2011.12.08.07), the Board approves the minutes of the 22 October 2011 ICANN Board Meeting. 2.2 Approval of Minutes of 28 October 2011 ICANN Regular Board Meeting Resolved (2011.12.08.08), the Board approves the minutes of the 28 October 2011 ICANN Regular Board Meeting. 2.3 Approval of Minutes of 28 October 2011 ICANN Organizational Board Meeting Resolved (2011.12.08.09), the Board approves the minutes of the 28 October 2011 ICANN Organizational Board Meeting. 2.4 ccNSO Amendment to the Fast Track Implementation Plan Whereas, the ICANN Board of Directors approved the Fast Track Implementation Plan at the ICANN meeting in Seoul, Republic of Korea on 30 October 2009 (http://www.icann.org/en/minutes/resolutions-30oct09-en.htm#2) Whereas, at the ICANN meeting in San Francisco in March 2011, the ccNSO formed a sub-group within ccNSO PDP Working Group 1 to provide clarification for the DNS Stability Panel within the IDN ccTLD Fast Track for handling cases of confusing similarity. Whereas, the ccNSO working group conducted a session on its recommendations during the ICANN meeting in Dakar, Senegal, in October 2011, and the ccNSO approved a resolution recommending that the ICANN Board approve an amendment to the Fast Track Implementation Plan in order to provide further guidance for a specific case of confusing similarity. Whereas a proposed amendment to the Fast Track Implementation Plan was prepared to implement the ccNSO recommendation. Resolved (2011.12.08.10), the ICANN Board of Directors approves the proposed amendment to the Fast Track Implementation Plan designed to implement the recommendation approved by the ccNSO at the ICANN meeting in Dakar, Senegal. The President and CEO is directed to incorporate the amendment into the Fast Track Implementation Plan previously adopted by the ICANN Board on 30 October 2009 and implement the amendment as soon as practicable. Rationale for Resolution 2011.12.08.10 Why is the Board addressing this issue now? In December 2010, ICANN conducted the first review of the IDN ccTLD Fast Track Process. The review sought community input on a variety topics including assessment of confusingly similar strings. This resulted in several public sessions and the formation of a sub-group within ccNSO PDP Working Group 1 to provide clarification for the DNS Stability Panel within the IDN ccTLD Fast Track for handling cases of confusing similarity. The working group conducted a session on its recommendations during the ICANN meeting in Dakar, Senegal, in October 2011, and the ccNSO approved a resolution recommending that the ICANN Board approve an amendment to the Fast Track Implementation Plan in order to provide further guidance for a specific case of confusing similarity. What is the proposal being considered? This modification to the Fast Track Implementation Plan is made to clarify the rules for the DNS Stability Panel in its evaluation of confusing similarity of requested IDN ccTLD strings. This change addresses specific situations when a requested IDN ccTLD string is confusingly similar to an existing ASCII ccTLD and the request is being made by the existing ccTLD operator with consent of the relevant public authority for the country or territory name requested. Which stakeholders or others were consulted? The string similarity topic was the focus of a public session held during ccNSO meetings during the ICANN meetings in San Francisco in March 2011. This meeting resulted in the ccNSO forming a sub-group created within IDN ccPDP Working Group 1 to work on providing more guidelines to improve the predictability of confusingly similar strings. The ccNSO sub-group reported its findings during another public ccNSO session during the Dakar meeting in October 2011 Are there fiscal impacts or ramifications on ICANN? There are no anticipated fiscal impacts on ICANN from this decision. The amendment will clarify the rules for confusing similarity in the IDN ccTLD Fast Track, upholding ICANN’s obligation to manage the introduction of new TLDs in a secure and stable manner, and is not expected to affect or impact the security or stability of the DNS. 2.5 New Annex A/GNSO Policy Development Process ================================================ Whereas, in October 2008, the GNSO Council established a framework (see GNSO Council Improvement Implementation Plan; (http://www.icann.org/en/topics/gnso-improvements/gnso-improvements-implement... [PDF, 95 KB]) for implementing the various GNSO Improvements identified and approved by the ICANN Board of Directors on 26 June 2008 (http://www.icann.org/en/minutes/resolutions-26jun08.htm#_Toc76113182) (http://www.icann.org/en/minutes/resolutions-26jun08.htm); Whereas, that framework included the formation, in January 2009, of two Steering Committees, the Operations Steering Committee (OSC) and the Policy Process Steering Committee (PPSC), to charter and coordinate the efforts of five community work teams in developing specific recommendations to implement the improvements; Whereas, the PPSC established two work teams, including the Policy Development Process Work Team (PDP-WT), which was chartered to develop a new policy development process that incorporates a working group approach and makes it more effective and responsive to ICANN's policy development needs; Whereas, the GNSO Council decided to terminate the PPSC on 28 April 2011 and instructed the PDP-WT to deliver its Final Report directly to the GNSO Council; Whereas, the PDP-WT submitted its Final Report (http://gnso.icann.org/issues/pdp-wt-final-report-final-31may11-en.pdf [PDF,1.39 MB]) on 1 June 2011 to the GNSO Council; Whereas the GNSO Council opened a 30-day public comment period on the Final Report (see http://www.icann.org/en/announcements/announcement-2-09jun11-en.htm); Whereas the GNSO Council referred those comments back to the PDP-WT for consideration (see http://gnso.icann.org/resolutions/#201107); Whereas the PDP-WT reviewed those comments and updated the report as deemed appropriate (see https://community.icann.org/download/attachments/9405500/PDP-WT+Public+Comme...); Whereas the PDP-WT submitted its Updated Final Report (see http://gnso.icann.org/improvements/updated-final-report-pdpwt-28sep11.pdf [PDF, 1.51 KB]) to the GNSO Council on 27 September 2011. Whereas, the GNSO Council adopted the Updated Final Report, including the proposed new Annex A and the PDP Manual unanimously. Resolved (2011.12.08.11), the ICANN Board adopts the new Annex A as described in http://www.icann.org/en/general/proposed-bylaws-revision-annex-a-clean-04nov... [PDF, 80 KB]. The Bylaws as amended will take effect upon adoption. The transition to the new PDP will be conducted as recommended by the GNSO Council in its resolution (see http://gnso.icann.org/resolutions/#201110). Rationale for Resolution 2011.12.08.11 Why is the Board addressing the issue now? On 26 June 2008 the ICANN Board approved a set of recommendations designed to improve the effectiveness of the GNSO, including its policy activities, structure, operations, and communications. The following pertains to the PDP: “Revising the PDP: The Policy Development Process (PDP) needs to be revised to make it more effective and responsive to ICANN's needs. It should be brought in-line with the time and effort actually required to develop policy and made consistent with ICANN's existing contracts (including, but not limited to, clarifying the appropriate scope of GNSO “consensus policy” development). While the procedure for developing "consensus policies" will need to continue to be established by the Bylaws as long as required by ICANN's contracts, the GNSO Council and Staff should propose new PDP rules for the Board's consideration and approval that contain more flexibility. The new rules should emphasize the importance of the preparation that must be done before launch of a working group or other activity, such as public discussion, fact-finding, and expert research in order to properly define the scope, objective, and schedule for a specific policy development goal and the development of metrics for measuring success. The revised PDP, after review and approval by the GNSO Council and ICANN Board, would replace the current PDP defined in Annex A of the ICANN bylaws”. The GNSO Council has now submitted its proposal for this revised PDP. What is the proposal being considered? In furtherance of this effort, the GNSO Council unanimously recommended to the ICANN Board the adoption of a policy development process (PDP) as outlined in the Updated PDP Final Report [PDF, 1.51 MB]. The proposed Annex A to the ICANN Bylaws, and the PDP Manual proposed in the Updated PDP Final Report attempts to achieve the goals established by the ICANN Board when it approved the restructure of the GNSO Council. This revised PDP, after review and approval by ICANN Board, would replace the current PDP defined in Annex A of the ICANN Bylaws. The main elements of the new PDP include, amongst others: ◦Recommending the use of a standardized "Request for an Issue Report Template" ◦The introduction of a "Preliminary Issues Report" which shall be published for public comment prior to the creation of a Final Issues Report to be acted upon by the GNSO Council ◦A Requirement that each PDP Working Group operate under a Charter ◦Dialogue between the GNSO Council and an Advisory Committee in the event that an the GNSO Council decides not to initiate a PDP following an Issues Report requested by such Advisory Committee ◦Seeking the opinion of other ICANN Advisory Committees and Supporting Organizations, as appropriate that may have expertise, experience, or an interest in the PDP issue early on in the process ◦Changing the existing Bylaws requiring a mandatory public comment period upon initiation of a PDP to optional at the discretion of the PDP Working Group ◦Clarification of ‘in scope of ICANN policy process or the GNSO’ ◦Changing the timeframes of public comment periods including (i) a required public comment period of no less than 30 days on a PDP Working Group’s Initial Report and (ii) a minimum of 21 days for any non-required public comment periods the PDP WG might choose to initiate at its discretion ◦Maintaining the existing requirement of PDP Working Groups producing both an Initial Report and Final Report, but giving PDP Working Groups the discretion to produce additional outputs ◦A recommendation allowing for the termination of a PDP prior to delivery of the Final Report ◦Guidance to the GNSO Council on the treatment of PDP WG recommendations ◦New procedures on the delivery of recommendations to the Board including a requirement that all reports presented to the Board are reviewed by either the PDP Working Group or the GNSO Council and made publicly available ◦The use of Implementation Review Teams Which stakeholders or others were consulted? Public comment forums were held on the Initial Report, the Proposed Final Report, the Final Report and the proposed new Annex A, in additional to regular updates to the GNSO Council as well as workshops to inform and solicit the input from the ICANN Community at ICANN meetings (see for example, the ICANN Meeting in Brussels and San Francisco). What concerns or issues were raised by the community? In addition to workshops and regular updates to the GNSO Council, three public comment periods were held on the different versions of the report. Eight community submissions were received during the public comment forum on the Initial Report, seven contributions were received in relation to the Proposed Final Report and four contributions were received during the public comment forum on the Final Report. The PDP-WT reviewed all the comments received in great detail and documented how each of these comments were considered by the PDP-WT and how these comments resulted in changes to the report, if any (see Annex A, B and C of the Updated PDP Final Report [PDF, 1.51 MB]). As a result, all issues and concerns raised were addressed and responded to by the PDP-WT. A summary and analysis of comments received during the public comment period prior to ICANN Board consideration of the revisions to Annex A can be found here: [To be completed following closing of public comment period on 5 December]. As of 23 November 2011, no comments were received What significant materials did the Board review? The Board reviewed the Updated PDP Final Report, including the Annexes that detail how the PDP-WT has reviewed and addressed the comments received, the proposed Annex A, a redline showing the changes from the Current Annex A, as well as the summary of public comments and Staff's response to those comments. What factors the Board found to be significant? The recommendations were developed allowing for broad community input and participation. The Updated Final Report was adopted unanimously by the GNSO Council. The new PDP is expected to: maximize the ability for all interested stakeholders to participate in the GNSO's policy development processes; incorporate the Working Group model; ensure that the policy development process is based on thoroughly-researched, well-scoped objectives, and are run in a predictable manner that yields results that can be implemented effectively; and make it more effective and responsive to ICANN’s policy development needs. Are there positive or negative community impacts? As outlined above, the ICANN Board expects positive effects of the new PDP, including maximizing the ability for all interested stakeholders to participate in the GNSO’s policy development process. Are there fiscal impacts or ramifications on ICANN (strategic plan, operating plan, budget); the community; and/or the public? No fiscal impacts or ramifications on ICANN; the community; and/or the public are expected. Are there any security, stability or resiliency issues relating to the DNS? There are no security, stability, or resiliency issues related to the DNS if the Board approves the proposed recommendations. 2.6 Changes to SSAC Membership 2.6.1 Thank You from Security and Stability Advisory Committee to John Schnizlein Whereas, John Schnizlein was appointed to the ICANN Security and Stability Advisory Committee on 26 June 2009. Whereas, ICANN wishes to acknowledge and thank John Schnizlein for his service to the community by his membership on the Security and Stability Advisory Committee. Rationale for Resolution 2011.12.08.12 It is the practice of the SSAC to seek Board recognition of the service of Committee members upon their departure. 2.6.2 SSAC Appointments – Don Blumenthal and Rod Rasmussen Whereas, the Security and Stability Advisory Committee (SSAC) does review its membership and make adjustments from time-to- time. Whereas, the SSAC Membership Committee, on behalf of the SSAC, requests that the Board should appoint Rod Rasmussen and Don Blumenthal to the SSAC. Resolved (2011.12.08.13) that the Board appoints Rod Rasmussen and Don Blumenthal to the SSAC. Rationale for Resolution 2011.12.08.13 The SSAC is a diverse group of individuals whose expertise in specific subject matters enables the SSAC to fulfill its charter and execute its mission. Since its inception, the SSAC has invited individuals with deep knowledge and experience in technical and security areas that are critical to the security and stability of the Internet’s domain name system. The SSAC’s continued operation as a competent body is dependent on the accrual of talented subject matter experts who have consented to volunteer their time and energies to the execution of the SSAC mission. Don Blumenthal is a Senior Policy Advisor with the Public Interest Registry. He would bring to the SSAC wide experience from government and law enforcement. Rod Rasmussen is President and CTO of Internet Identity. He would bring to the SSAC extensive experience in cross-industry organizations, law enforcement collaboration, and Internet policy development. 3. ATRT Recommendation 5: Board Compensation ============================================== Whereas, ICANN is considering whether to offer compensation to all of its voting directors for their services to ICANN. Whereas, ICANN is a nonprofit California public benefit corporation that is exempt from Federal income tax under §501(a) of the Internal Revenue Code of 1986, as amended (the “Code”) as an organization described in §501(c)(3) of the Code. Whereas, ICANN may not pay directors more than Reasonable Compensation as determined under the standards set forth in §53.4958-4(b) of the regulations issued under §4958 of the Code (the “Regulations”). Whereas, ICANN has taken all steps necessary, and to the extent possible, to establish a presumption of reasonableness in the level of voting Board member compensation, if approved. Whereas, certain portions of ICANN’s current Conflicts of Interest Policy must be revised in order for the Board to vote on whether to approve compensation for the voting Directors. Whereas, certain portions of ICANN’s current Bylaws must be revised in order to allow voting Board members other than the Chair to be compensated. Whereas, the public comments received on the specific proposed revisions to the Conflicts of Interest Policy and Bylaws generally were in favor of the proposed revisions. Whereas, the Board recognizes that many commenters suggested additional but unrelated revisions to the Conflicts of Interest Policy, which ICANN is committed to reviewing and revising as appropriate (see Board Resolution on Review of ICANN Conflicts of Interest Policy and Ethics at http://www.icann.org/en/minutes/resolutions-28oct11-en.htm#6). Resolved (2011.12.08.14), the Board approves the limited changes to ICANN’s Conflicts of Interest Policy needed to allow the Board to either approve or reject the Independent Valuation Expert recommendation on voting Board member compensation. Resolved (2011.12.08.15), the Board approves the limited changes to ICANN’s Bylaws needed to allow all voting Board members to receive compensation for services provided. Resolved (2011.12.08.16), the Board approves the recommendation from the Independent Valuation Expert (as that term is defined in §53.4958-1(d)(4)(iii)(C) of the IRS Regulations), made in its Report or Reasoned Written Opinion, (as that term is defined in §53.4958-1(d)(4)(iii)(C) of the Regulations), that it is reasonable to “[i]ntroduce annual cash retainer of $35,000 for outside directors and maintain the $75,000 for Chairman of the Board” and “[a]n additional $5,000 annual retainer would be provided for committee chair (except the Chairman of the Board).” Resolved (2011.12.08.17), all Board members will be required to complete and sign a form either specifically accepting or declining the approved compensation, and a list of all will be posted on the Board of Directors page. Resolved (2011.12.08.18), compensation for all voting Board members who choose to accept the compensation approved herein, shall be effective on 9 December 2011. Rationale for Resolutions 2011.12.08.14 – 2011.12.18 Over the past several years, ICANN has been considering issues surrounding voting Board member compensation. The Board has publicly discussed the matter and has reviewed independent analysis and advice on the matter, as well as public comment. For example: (i) there were calls from the community in relation to ICANN Framework for Accountability and Transparency that voting Board members be compensated; (ii) budget contingency discussions since FY08 have involved the concept of possible Board compensation; (iii) outside counsel provided advice on the ramifications of Board compensation, including identification of assessments and safeguards ICANN would need to establish before proceeding; (iv) Watson Wyatt, and then Towers Watson, provided studies on other non-profit organizations and Board member compensation; (v) the Boston Consulting Group (“BCG”) that conducted the Board Review suggested that relatively modest fees to compensate voting directors for service may be appropriate; (vi) the Board Review working group acknowledged general support from the BCG and the community for director compensation, but recommended further study in coordination with General Counsel; (vii) the Accountability and Transparency Review Team (ATRT) specifically recommended that the Board should implement a compensation scheme for voting Board members; and (viii) public comment and input was sought on required changes to ICANN’s Conflicts of Interest Policy and Bylaws, as well as on the Independent Expert report on voting Board member compensation. In August of 2010, the Board approved compensation for the Board Chair. (See http://www.icann.org/en/minutes/resolutions-05aug10-en.htm#5.) Since that time, a call for all voting Board members to be compensated has continued, most recently through Recommendation 5 from the ATRT. On 24 June 2011, the Board noted that the CEO and General Counsel had been directed to take the next steps to properly consider the ATRT’s recommendation. (See http://www.icann.org/en/minutes/resolutions-24jun11-en.htm#2.) ICANN followed a process calculated to pay an amount that is in its entirety Reasonable Compensation for such service under the standards set forth in §53.4958-4(b) of the Treasury Regulations. First, the Board sought a recommendation from an Independent Valuation Expert (“Expert”) as to the reasonableness of, and if so, the amount of compensation. The Board approved Towers Watson (TW) to be engaged to serve as the Expert. TW is a leading global professional services company with expertise in compensation for non-profit organizations. TW had provided advice on the Board Chair compensation and was recommended by the National Association of Corporate Directors to serve as the Expert. The Expert Report, which was posted for public feedback, can be found with the Announcement at http://www.icann.org/en/announcements/announcement-3-04nov11-en.htm. Second, in the event that the Expert recommended compensation for voting Board members and the Board intended to vote on that recommendation, ICANN’s Conflicts of Interest (COI) Policy had to be revised. Currently, the Policy states “[n]o Director shall vote on any matter in which he or she has a material Financial Interest that will be affected by the outcome of the vote.” (See Article II, section 2.4(a) http://www.icann.org/en/committees/coi/coi-policy-30jul09-en.htm.) Thus, voting on Board compensation without any change would be a direct conflict of interest. Accordingly, the Board approved posting for public comment limited revisions to the COI Policy that will allow the Board to vote on director compensation. (See http://www.icann.org/en/public-comment/bylaws-amend-vi-coi-policy-01sep11-en....) Third, in the event that the Expert recommended a compensation arrangement for voting directors and the Board approves that recommendation, ICANN’s Bylaws must be changed. Currently the Bylaws specifically prohibit compensation for voting directors. Article VI, section 22 states “All Directors other than the Board Chair shall receive no compensation for their services as Directors.” See http://www.icann.org/en/general/bylaws.htm#VI. The Board approved the posting for public comment proposed revisions to the Bylaws that would allow all voting Directors to be compensated. (See http://www.icann.org/en/public-comment/bylaws-amend-vi-coi-policy-01sep11-en....) The Board was provided a summary of all of the public comments with reference to each individual comment (see http://www.icann.org/en/public-comment/bylaws-amend-vi-coi-policy-01sep11-en...) on the specific proposed revisions and determined that all generally were in favor of the proposed revisions as they were necessary to allow for all voting Board members to be receive compensation, if approved. Further, no Feedback was received on the Expert Report. The Board has thus taken all steps necessary to ensure that consideration of voting Board member compensation for services provided was done in accordance with all appropriate laws, rules and regulations, including that any compensation be, in its entirety, Reasonable Compensation under the standards set forth in §53.4958-4(b) of the Treasury Regulations. In making its decision and passing these resolutions, the Board has reviewed all of relevant materials referenced above. In addition, throughout the time the Board has been considering the issue of voting Board member compensation, it has had the opportunity to review and consider: (i) the Boston Consulting Group’s Independent Review Final Report, comment on that report, the Board Review Working Group’s Final Report and comment on that final report (all of which can be found at http://www.icann.org/en/reviews/board/); and (ii) the ATRT Recommendations and related comments, all of which can be found through http://www.icann.org/en/public-comment/public-comment-201012-en.htm#atrt-dra... and http://www.icann.org/en/announcements/announcement-31dec10-en.htm. Taking these steps positively impacts the accountability and transparency of ICANN as it fulfills a particular recommendation of the ATRT. Further, regularly informing the community through posting all of the process steps the Board is followed, as well as the proposed revisions for the Conflicts of Interest Policy and the Bylaws, and the Expert Report, significantly enhanced ICANN’s transparency in this matter. Accordingly, this should have a positive community impact in its implementation. Compensating voting Board members who choose to accept compensation at the amount recommended and approved will have a fiscal impact on ICANN. For this fiscal year, in anticipation of possible approval of voting Board member compensation, a portion of the budgeted contingency fee has been identified to cover whatever amount is needed to compensate voting Board members as approved pursuant to this resolution. As it is not yet not known precisely how many Board members will and will not accept compensation, the precise amount needed has not yet been calculated. This decision will have no impact on the security, stability or resiliency of the domain name system. 4. Board Member Rules on Conflicts of Interest for New gTLDs ============================================================== Whereas, ICANN is committed to attaining a higher ethical standard to ensure the legitimacy and sustainability of the multi-stakeholder model. Whereas, ICANN's current corporate governance documents, as set out at http://www.icann.org/en/documents/governance/, include a Conflicts of Interest Policy and Board Code of Conduct (including ethical guidelines and confidentiality provisions). Whereas, it is crucial to have strengthened rules and practices in place as ICANN embarks on the New gTLD Program. Whereas, ICANN is undertaking multiple external reviews of its existing Conflicts of Interest Policy, Code of Conduct and other conflicts and ethics practices. Whereas, while awaiting specific recommendations for enhancements to ICANN's policies and practices, ICANN is committed to demonstrating that it will treat decisions approving any new gTLD application in an ethical manner and with care to avoid even an appearance of a conflict of interest. Resolved (2011.12.08.19), the Board adopts the following conflicts of interest rules as they specifically apply to the New gTLD Program: ◦Any and all Board members who are either knowingly or potentially advising on, or involved in any way with submitting, any new gTLD application: ■Will not vote on that application or any related application; ■Will not participate in any deliberations about that application or any related application; and ■Will not receive any information about that application or any related application until such information is made public. ◦Any and all Board members who approve any new gTLD application shall either: ■Not take a contracted or employment position with any company sponsoring or in any way involved with that new gTLD for 12 months after the Board made the decision on the application. ◦If deliberations call for expertise about the industry operations, or any other matters, that could be provided by a Board member excluded as a result of these rules, the Board member can be asked to participate in the limited discussion requiring such expertise. Independent experts could be similarly invited to participate in the deliberations. If such expertise is sought, the nature of the discussion and the expert will be identified in the meeting minutes or notes, as applicable. ◦In addition to all of the above, all existing conflicts of interest, ethics and conduct requirements continue to apply to all Board members, including the prohibition on using any confidential information obtained while serving on the Board for any other purpose whatsoever. Rationale for Resolution 2011.12.08.19 Over the past several months, ICANN has placed a strong emphasis on the need for enhancing ICANN's policies relating to conflicts of interest, ethics, confidentiality and an overall code of conduct. During the Singapore meeting, the President and CEO identified such issues as crucial given that the New gTLD Program was entering into a new phase with Board approval, which was taken on 20 June 2011. In addition, the community has been calling for a thorough review of these policies. Accordingly, ICANN has determined that it should strive to achieve a Gold Standard in both the documentation of polices and the adherence to polices relating to conflicts of interest ethics, confidentiality and code of conduct. In order to achieve the Gold Standard that ICANN has determined to achieve, ICANN is undertaking multiple external reviews of its conflicts and ethics practices. First, our corporate law firm is reviewing our current working documents, including our "Conflicts of Interest Policies", "Code of Conduct" and "Employee Handbooks," to enhance the focus on best practices for conflicts and ethics. Second, a new independent law firm (not involved in ICANN processes) is reviewing ICANN's documentation, comparing ICANN to similarly situated non-profits and making recommendations for enhancements. Third, ICANN is contracting with an international expert group to review ICANN's documents and practices and to make recommendations. This group will focus on ICANN's global function and the best practices of other international organizations. While awaiting specific recommendations for enhancements to ICANN's policies and practices, ICANN is committed to demonstrating that it will treat decisions relating to approving any new gTLD application in an ethical manner and with care, to avoid even the appearance of a conflict of interest. Accordingly, ICANN has passed this resolution to help direct the Board members’ conduct. Again, it should be noted that this is not meant to supplant or supersede any existing or soon to be additional policies and practices relating to conflicts of interest, conduct or ethical behavior. Taking this action will positively impact the ICANN community by addressing these issues with urgency, and committing to the highest ethical standards, particularly with respect to the New gTLD Program. Such enhancements are meant to ensure the legitimacy and sustainability of the multi-stakeholder model as enshrined in ICANN. Further, this resolution will should not have any fiscal impact on ICANN or the community. This action will not have any impact on the security, stability and resiliency of the domain name system.