Dear IFR2 Team,
As a follow up to the discussion around the relationship between the PTI and ICANN Boards, Sam Eisner and Kim Davies provided insight below. There are multiple facets to this question and the insight offered is around the interaction between the two boards as well as the relationship from a legal perspective.
Interaction between the two Boards: The Naming Functions does not specify a “formal” relationship directly between the two Boards. The Board delegates its authority to the CEO and their designees to perform direct oversight of PTI via the contracts. There are general relationships between Kim, as a representative of PTI, Sally and her designees, as representatives of ICANN. Kim, as the PTI President, presents to the ICANN Board periodically on PTI topics of interest, and from time-to-time the ICANN CEO meets with the PTI Board. These are not driven by specific contractual obligations and are more about general relationship management.
Legal Perspective: From the legal perspective, as the Sole Member of PTI, the ICANN Board is responsible for the identification of the PTI President (who is a member of the PTI Board), and for formally appointing all the other four members of the PTI Board. Under the Bylaws, the ICANN Board appoints two of those members from either ICANN or PTI (to complete the requirement that three of the members of the PTI Board must be employees of ICANN or PTI) and then the Board accepts the ICANN Nominating Committee selection for the other two seats. The ICANN Board also holds the right to remove any of the directors pursuant to section 5.6.2 of the PTI Bylaws (as that is a corporate right of members). The ICANN Board has never exercised this right.
Once comprised, the PTI Board has some items that it is required to communicate to the ICANN Board, including PTI’s approved annual budget (to be included in ICANN’s Budget) and PTI’s approved Strategic Plan.
The PTI Board and the ICANN Board each have roles in the Amendment of PTI Bylaws (requiring PTI Board approval and the approval of the member).
As the member of PTI, the ICANN Board also has the following rights: “sale, transfer or disposition of the Corporation's assets (other than in the ordinary course of the Corporation's business), on any merger and its principal terms and any amendment to those terms, on any election to dissolve the Corporation and on any amendment or repeal of these Bylaws.” (PTI Bylaws Section 4.2). None of these have been exercised. Also, the ability for the ICANN Board to impact PTI is limited by the ICANN Bylaws, which require ICANN to maintain PTI (“ICANN shall maintain as a separate legal entity a California nonprofit public benefit corporation (["PTI"]) for the purpose of providing IANA services, including providing IANA naming function services pursuant to the IANA Naming Function Contract, as well as other services as determined by ICANN in coordination with the direct and indirect customers of the IANA functions.”); impose other requirements on ICANN’s exercise of its role as the member, such as requiring Empowered Community approval for any changes to the PTI Articles of Incorporation or certain changes to the PTI Bylaws; and requiring that ICANN couldn’t take actions such as a sale or disposition of assets if the Empowered Community rejected such an action. See Article 16, Section 16.2 of the ICANN Bylaws.
If further clarification is needed, we can arrange for Sam to join a future IFR2 meeting.
Thank you,
Reda
