At-Large ICANN Board Conflicts of Interest Review - Revised Conflicts of Interest Policy and Related Governance Documents Workspace

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02.04.2012 

ICANN Board Conflicts of Interest Review - Revised Conflicts of Interest Policy and Related Governance Documents

Adopted
12Y, 0N, 1A

28.03.2012

30.03.2012

02.04.2012

02.04.2012

05.04.2012

07.04.2012

02.04.2012

Amy Stathos Amy.Stathos@icann.org

AL/ALAC/ST/0412/1

Comment/Reply Periods (*)

Important Information Links

Comment Open:

11 March 2012

Comment Close:

2 April 2012

Close Time (UTC):

23.59 UTC

Reply Open:

3 April 2012

Reply Close:

24 April 2012

Close Time (UTC):

23.59 UTC

Brief Overview

 

Originating Organization:

ICANN Board

Categories/Tags:

ICANN Board/Bylaws

Purpose (Brief):

To receive comment on revisions to the Board Conflicts of Interest Policy, Code of Conduct and Expected Standards of Behavior as well as a proposed Corporate Governance Guidelines prepared as part of ICANN's ongoing review of its Conflicts of Interest and Ethics practices.

Current Status:

ICANN is undertaking a three-part review of its Conflicts of Interest and Ethics practices. One of those steps is working with ICANN's long-standing outside counsel to review ICANN's corporate governance documents to make recommendations of how those could be improved in light of best practices in corporate governance, while still reflecting the needs of ICANN. This review produced recommended modifications to the ICANN Board Conflicts of Interest Policy, Code of Conduct and Expected Standards of Behavior, as well as introducing a more comprehensive Corporate Governance Guidelines document. This work has been conducted in coordination with the Board Governance Committee.

Next Steps:

These documents are just the beginning of items that will be considered as part of ICANN's three-part review. After the comments are reviewed, the BGC will consider whether it is appropriate for the proposed documents be recommended for adoption. The comment received may also inform the expert work proceeding regarding ICANN's ethical culture, as well as the work of separate counsel that is also reviewing ICANN's corporate governance environment.

Staff Contact:

Amy Stathos, Deputy General Counsel

Email:

amy.stathos@icann.org

Detailed Information

 

Section I: Description, Explanation, and Purpose

As a part of ICANN's commitment to enhancing its overall culture of promoting superior ethics, integrity and transparency,ICANN is posting for public comment Corporate Governance Guidelines and revised versions of the following documents: the Board Conflicts of Interest Policy, the Board Code of Conduct and the Expected Standards of Behavior.

Section II: Background

Over the year, heightened attention and scrutiny has been placed on how the ICANN Board addresses conflicts of interest, and on enhancing ICANN's ethical culture. While ICANN has a robust conflict of interest policy and code of conduct in place, work has been ongoing with the community and experts to determine how these can be improved.
ICANN engaged two sets of outside counsel – one that is familiar with ICANN to perform a holistic review of our policies to make identifications of how they can be improved; and another set that is not familiar with ICANN to provide a review and recommendations for improvement. The documents provided for comment today arise out of one of those reviews.
ICANN has also engaged a team of international ethics experts to provide recommendations for the enhancement ofICANN's ethical culture, drawing on international sources, including practices in other not-for-profit organizations.
As another facet of this work, the ICANN Board has already finalized and announced rules on how Directors with interests in specific New gTLD applications may participate in New gTLD-related discussions. In addition ICANN announced stringent communication rules for its staff regarding communications with potential new gTLD applicants.

Section III: Document and Resource Links

Four documents are provided for public comment:* Revised Board Conflicts of Interest Policy (in Redline) [PDF, 140 KB]

Section IV: Additional Information

None

This page contains two statements.

The First Statement has already been submitted to the Public Comment forum and ratified by the ALAC.

The Second Statement is found below.

ALAC Schedule for second Statement

Call for Comments: starts 20 April 2012
Call for comments closing time: Tuesday 24 April 2012 @ 15:00 UTC
Statement to be submitted: 24 April 2012 
ALAC Vote starts: 25 April at 0:00 UTC and ends on 1 May 2012 @ 23:59 UTC
Vote reminder on: 30 April @ 0:00 UTC

DRAFT ALAC Statement on At-Large ICANN Board Conflicts of Interest Review - Revised Conflicts of Interest Policy and Related Governance Documents

Click here to download a copy of the Statement in PDF Format.

 

The At-Large Advisory Committee (ALAC) has already filed a first statement during the present comment period, marked as an “advance notice” due to the short time (21 days) allocated to the initial phase of the comment period. As a matter of fact, we echo the concerns made by the IPC and others that 21 days are too short for our needs to collect input from our five regions.

The present statement builds upon our “first notice”. Since then, we have noted a number of other comments on the issue of Conflicts of Interest (CoI), received in the first comment period, with which we concur.

Introduction

The At-Large Advisory Committee is concerned by the content of the Board's response to the rising levels of attention given conflict of interest matters both inside and outside the ICANN community. We are troubled by the possible impacts on ICANN's credibility as a steward of the multi-stakeholder model of Internet governance and the sustainability of that model in the global environment, especially in light of clear and present threats. 

In this document we make a recommendation which, in our view, would begin to redress the situation: the creation of a cross community Commission with the mission to recommend clear and concise steps to enhance the interests of global Internet users.

Main Issues

The document presented for public comment is unfortunately of little consequence when ICANN is repeatedly accused by many outside of ICANN to be a cartel of insiders, looking out for little more than the enrichment of a small number of its members. Indeed, many of these critics consider that the public interest appears to be ignored altogether. The ALAC is highly concerned that some of the commercial entities likely to capitalize the most on the new gTLD program were built by those very individuals who have worked as employees and key volunteers in ICANN and on the ICANN Board to build the policies under which their business will operate in the future.

This concern is widely echoed outside the ICANN microcosm.  Indeed, in its explanatory text for rejecting all of the proposals - including one from ICANN - for managing the IANA function, the United States Department of Commerce underlines a “need for structural separation of policy-making from implementation, a robust companywide conflict of interest policy, provisions reflecting heightened respect for local country laws and a series of consultation and reporting requirements to increase transparency and accountability to the international community.”  Their message is unmistakable and the ALAC believes this warning should be heeded by ICANN.

Current Situation

The ALAC welcomes the creation of a Board New gTLD Program Committee 2012.04.10.01-2012.04.10.04 which has been delegated with all legal and decision making authority of the Board regarding the new gTLD Program. However, the Resolution rationale explains that Board members not on the committee are all conflicted. This is a regrettable situation, and the ALAC is concerned that neither the ICANN Board Chair nor the Vice Chair are part of this Committee.

The creation of this non-conflicted Program Committee is definitely a step in the right direction, but ICANN needs to go much further in order to regain public confidence in the multi-stakeholder model it is supposed to embody.

The ALAC considers it necessary to remind the Board that ICANN is expected to operate according to the Affirmation of Commitments signed with the US Department of Commerce.

Specifically looking at the Affirmation of Commitments, we note:

9.1 Ensuring accountability, transparency and the interests of global Internet users:”

Although the paragraph does not explicitly include a mention of conflicts of interests, it is clear that any existing, or even a perception of Conflict of Interest in its Board may have a direct negative impact on the interests of Internet users around the world.

Recommendation

The ALAC therefore advises and recommends that a cross-community Commission (or Task Force, or Cross-Community Working Group) be set-up to examine ICANN’s conflicts of interest at all levels as well as any other structural issues that in effect prevent ICANN from meeting this commitment. In order to carry out its duties fully, this entity should have the possibility to engage the services of a few recognized experts, from outside the circle of ICANN, known for  their successful implementation of corporate governance, especially in not-for-profit organizations worldwide, in order to help develop a CoI framework for ICANN.

Finding and recommending hasty solutions in a Statement of the ALAC would lead to an unhealthy atmosphere of inquisition for the multi-stakeholder bottom-up model. Setting-up a Commission to come up with clear and concise steps to enhance the global public interest for Internet users is the only safe and sure way forward.

The ALAC would naturally need to be represented in such a cross-community Commission. The ICANN Bylaws (Article XI, Section 2.4) warrant such a role for the ALAC:

a. The At-Large Advisory Committee (ALAC) is the primary organizational home within ICANN for individual Internet users. The role of the ALAC shall be to consider and provide advice on the activities of ICANN, insofar as they relate to the interests of individual Internet users.”

--- end of draft second Statement -


ALAC Schedule for first Statement

Call for Comments: starts 23 March 2012
Call for comments closing time: Friday 30th March 2012 @ 23:59 UTC
Statement to be submitted: 2nd April 2012
ALAC Vote starts: 2nd April at 0:00 UTC and ends on 6 April @ 23:59 UTC
Vote reminder on: 5 April @ 0:00 UTC

Click here to download a copy of the PDF Below

The At-Large Advisory Committee is concerned by the Board's response to the
recent spate of conflict of interest matters raised from both inside and
outside the ICANN community. We are troubled by the possible impacts on
ICANN's credibility as a steward of the multistakeholder model of Internet
governance and the sustainability of that model in the global environment,
especially in light of clear and present threats.

In our view, ICANN must seize this moment to right itself by adopting and
applying the language of the Affirmation of Commitments with respect to
conflicts of interest. Indeed, in its explanatory text for rejecting all
of the proposals - including one from ICANN - for managing IANA affairs,
the United States Department of Commerce avers a “need for structural
separation of policy-making from implementation, a robust companywide
conflict of interest policy, provisions reflecting heightened respect for
local country laws and a series of consultation and reporting requirements
to increase transparency and accountability to the international
community.” Their message is unmistakable and it would be wise to heed the
warning.

The credible evidence so far suggests that top to bottom, ICANN is riddled
with conflicts of interest as measured by contemporary best practice
corporate governance frameworks. Indeed, with the identification of one
class of conflicts by CEO Rod Beckstrom as a “significant threat” to ICANN,
we are at a watershed moment.

Mr Beckstrom's proposal for remedy includes that of ICANN board candidates
be “financially independent of the domain name industry.” He also posited
reform of the board selection process ”not just desirable". He calls for
a "fully independent and non-conflicted NomCom" in place before the next
nomination cycle begins.

The evidence and arguments are compelling enough for the ALAC to agree with
them. While we would not wish to eliminate the domain name industry from
participation in what must be a viable multistakeholder model of
governance, that influence must be balanced and not overwhelming. For
example, we do not believe it is a good thing for declared domain name
industry representatives to hold the chairmanship of the Nominating
Committee. The counteracting argument that a non-voting Chair is without
power is not only simplistic but mocks what we know of organizational
behaviour. And as we now understand from the NomCom's senior leadership,
no conflict of interest framework exists within the committee governing
external financial conflicts of interest – only fiduciary relationships
with ICANN itself are addressed.****

We believe ICANN’s public credibility is being strained to breaking point
in this regard. And another major embarrassment is hardly affordable.

We urge the ICANN board to acknowledge the current gaps in
conflict-of-interest guidelines within the community and to immediate steps
to engage an impartial third party to review and propose a conflict of
interest framework to remedy and relieve the community of the serious
inherent implications.

Call for Comments: starts 23 March 2012
Call for comments closing time: Friday 30th March 2012 @ 23:59 UTC
Statement to be submitted: 2nd April 2012
ALAC Vote starts: 2nd April at 0:00 UTC and ends on 6 April @ 23:59 UTC
Vote reminder on: 5 April @ 0:00 UTC

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22 Comments

  1. Forwarded comment from Titi Akinsanmi:

    ------- Message original -------

    Sujet:

    Re: [ALAC] When will ALAC make its conflict of interest statement?

    Date :

    Wed, 21 Mar 2012 12:59:08 -0400

    De :

    Titi Akinsanmi <titi.akinsanmi@gmail.com>

    Pour :

    ALAC Working List <alac@atlarge-lists.icann.org>

    Good day to you all,

    I have taken the version of the CoI statement done by Carlton (Thank you
    Carlton) and adjusted it as pasted beneath.

    ***What would be useful to support this statement would be a list of CoI
    issues/instances identified over the last year at the very least to
    buttress our statement - this would be where I would include references to
    the CEOs speech)

    *****

    The At-Large Advisory Committee is concerned at the minimal response by the
    Board to the growing instances of glaring conflicts of Interest issues
    within ICANN and its various constituencies. This has been raised both
    internally by ICANN members as well as by externals outside of the ICANN
    community.

    The impact/toll this is taking on ICANN’s credibility as a steward of the
    multi-stakeholder nature of the Internet governance ecosystem and its
    sustainability in the in the global environment is very troubling in light
    of the continuing threats.

    We as the ALAC assert that ICANN needs to promptly address this growing
    perception by adopting and applying the language of the Affirmation of
    Commitments with respect to Conflict of Interest. We refer to the
    explanatory text for the rejection of all proposals to manage the IANA
    contract by the United States Department of Commerce which stated ‘a need
    for ((the)) structural separation of policy-making from implementation, a
    robust company-wide conflict of interest policy, provisions reflecting
    heightened respect for local country laws and a series of consultation and
    reporting requirements to increase transparency and accountability to the
    international community.” The intent and message is clear and unmistakable
    and we as the ICANN community would be wise to heed such direct criticism of
    our systems.

    Till date it has become even more obvious with a series of credible
    instances and situations that ICANN is very much riddled with conflicts of
    Interest when compared with or measured by contemporary best practice in
    corporate governance frameworks and standards.

    ((Indeed, with the identification of one class of conflicts by CEO Rod
    Beckstrom as a “significant threat” to ICANN, we are at a watershed moment.
    Mr Beckstrom's proposal for remedy includes that of ICANN board candidates be
    “financially independent of the domain name industry.” He also posited reform
    of the board selection process ”not just desirable". He calls for a
    "fully independent and non-conflicted NomCom" in place before the next
    nomination
    cycle begins.))

    *[not sure about including this line or reference to Rod’s speech ((lending
    it more significance than necessary)) but rather specific instances could be
    used here]*

    • *

    The evidence and arguments are compelling enough for the ALAC to agree with
    these but not at the expense of eliminating the domain name industry from
    participation in a viable multi-stakeholder model of governance. Rather its
    influence must be unbiased, balanced and far from totalitarian in nature.
    We do not for instance, perceive it to be advantageous that a domain name
    industry representative should hold the chairmanship of the Nominating
    Committee at this point – juxtaposed with the many other powerful
    influencer roles held by industry representatives across ICANN
    constituencies. The counteracting argument that a non-voting Chair is
    without power is simplistic and undermines what is known of organizational
    behavior and the power of influencers – voting powers or not. It is noted
    that as clarified to us by NomCom senior leadership, no conflict of
    interest framework exists within the committee to govern external financial
    conflicts of interest at present - as only fiduciary relationships with
    and within ICANN itself is addressed.

    We believe ICANN’s already tenuous public credibility is being strained to a
    breaking point in this regard – and we can hardly afford another major and
    public embarrassment. We, as the ALAC, representing end-users in this
    complex ecosystem, urge the ICANN board to acknowledge and address the
    current gaps in conflict-of-interest guidelines within the community by
    taking immediate actionable steps to engage an impartial third party to
    review, propose and support the implementation of a conflict of interest
    strategy across all its constituencies.

    *****

    TT

  2. Hi! I think that this is an excellent initiative by Beau and Carlton. I think that we should restructure the Statement because it will go to their Legal Counsel. Here are my suggested structural changes/edits:

    Introduction

    [Briefly describe context - Beau/Carlton have done this]

    Brief Summary of Advice

    In a single sentence what is the crux of our advice and recommendations. [To read more, they can go through the rest of our statement but we need to capture their attention.]

    Laws, Rules and Procedures 

    We should do this according to hierarchy.(Affirmation of Committments) as well as any accountability laws that may be applicable under US laws, that is Federal laws and Californian State Law as well as internationally accepted corporate governance standards [This can also include competition laws - we just need to quote appropriate sections without going into details]. We can also broadly draw from regional best practices is available by highlighting the relevant references.

    Issues

    We should highlight the classes or categories of conflicts. If there are statistics or after highlighting the various classes, do a quick scan through ICANN and if it is possible to quantify this with statistics, this will be useful. I feel that we do not need to start afresh as there is probably enough published work already through the various constituencies. We just need to go through the material and glean this information. Empirical analysis is needed to substantiate an assertion.

    Analysis

    Here we can present a succint analysis of the issues and remind the Board of why this is important and emphasise the impact on the ordinary end user, the internet ecosystem etc. We can present and highlight simple and key recommendations of what needs to be done.

    Conclusion

  3. My suggested version:

    The At-Large Advisory Committee is concerned by the ICANN Board's minimal response to the rising levels of attention regarding conflict of interest raised both inside and outside the ICANN community. We are troubled by the possible threats to ICANN's credibility as a steward of the multi-stakeholder model of Internet governance and the sustainability of that model in the global environment, especially in light of clear and present threats to ICANN itself.

    The speed at which Rod Beckstrom's speech in San José has been echoed by the mainstream media merely brings to light longstanding ALAC concerns about this issue. Even in advance of the speech, members of At-Large were engaging ICANN's Governmental Advisory Committee on this issue, and its Future Challenges Woking Group had already begun indeed preparing its own analysis. Mr. Beckstom's comments merely shed a much-needed light on this fundamental problem.

    In general, the ALAC agrees with the substance of Mr. Beckstrom's comments and certainly with the urgency he expressed. From top to bottom ICANN is riddled with conflicts of interest as measured by contemporary best practice corporate governance frameworks. Directly vested interests appear throughout ICANN's leadership structures, including leadership in its Nominating Committee, as well as leadership in policy development directly affecting those interests.

    Such conflicts, deeply embedded into the organization, have identifiable origins. ICANN's corporate culture seems to embrace the posture that because it serves as the primary conduit for funds into ICANN, the domain industry retains a prime position and disproportionate voice in policy development. Repeated attempts by At-Large and other constituencies to recruit less conflicted interests to the ICANN policy making agenda have been frustrated even as solicitation of contracted parties continue apace.

    We believe it is both bad practice and bad public relations for representatives of contracted parties to hold the chairmanship of the Nominating Committee. As we understand, no conflict of interest framework exists within the committee governing external financial conflicts of interest – only fiduciary relationships with ICANN itself are addressed.

    The multi-stakeholder model is not one of industry self-regulation; ICANN must neither act in that manner or be seen to act in that manner. Statements of Interests are not sufficient. The ICANN practice which enables directly conflicted participants to create policy – so long as they declare those conflicts – is unsustainable.

    ICANN must seize this moment to right itself by adopting and applying the Affirmation of Commitments to its many existing conflicts of interest. We echo Mr. Beckstrom's proposal that ICANN board candidates be “financially independent of the domain name industry”. While we share his concerns about the composition of the Nominating Committee that selects so much of ICANN's leadership, we are concerned that some of his proposals could lead to capture and require more investigation.

    ICANN's corporate culture must ensure that robust protection from conflicts of interest are embedded into ICANN processes and implementations from beginning to end.  We share the demands of the US Department of Commerce (in its rejection of the ICANN proposal for continued management of IANA) for a structural separation of policy-making from implementation and a robust organization-wide conflict of interest policy.

    While we fully agree that the the domain name industry is a vital and necessary participant in a truly viable multi-stakeholder model of governance, its influence must be balanced and not be allowed to overwhelm the global public interest.

    As the ALAC commits to auditing and strengthening our own Conflict of Interest policies, we advise the ICANN Board  to acknowledge the current gaps in guidelines within the community and to immediate steps to engage an impartial third party to review and propose a conflict of interest framework -- one that goes beyond mere disclosure -- to remedy and relieve the community of the serious inherent implications. ICANN must also reconsider its outreach and promotion priorities, to encourage the greater involvement of stakeholders who are not financially incentivised to be involved.

    While the ALAC is absolutely committed to its multi-stakeholder model, we believe ICANN’s public credibility is being strained to breaking point in this regard. Mr. Beckstrom's highlighing attention on Conflict of Interest as a “significant threat” to ICANN offers a watershed opportunity. By addressing these core problems and demonstrating the full potential in its multi-stakeholfder model, ICANN will truly demonstrate its commitment to serving the global public interest.

    1. Some of the wording in this comment was changed at the suggestion of Carlton. His changes are welcomed and incorporated.

  4. Anonymous

    Here under is my version of Beau's draft letter to the Board for your advice and consent. As promised, this is intended to be sent to the Board.--------------------------------------

    The At-Large Advisory Committee is concerned by the Board's response to the recent spate of conflict of interest matters raised from both inside and outside the ICANN community. We are troubled by the possible impacts on ICANN's credibility as a steward of the multistakeholder model of Internet governance and the sustainability of that model in the global environment, especially in light of clear and present threats. 

    In our view, ICANN must seize this moment to right itself by adopting and applying the language of the Affirmation of Commitments with respect to conflicts of interest.  Indeed, in its explanatory text for rejecting all of the proposals - including one from ICANN - for managing IANA affairs, the United States Department of Commerce avers a “need for structural separation of policy-making from implementation, a robust companywide conflict of interest policy, provisions reflecting heightened respect for local country laws and a series of consultation and reporting requirements to increase transparency and accountability to the international community.”  Their message is unmistakable and it would be wise to heed the warning.

    The credible evidence so far suggests that top to bottom, ICANN is riddled with conflicts of interest as measured by contemporary best practice corporate governance frameworks.  Indeed, with the identification of one class of conflicts by CEO Rod Beckstrom as a “significant threat” to ICANN, we are at a watershed moment.

    Mr Beckstrom's proposal for remedy includes that of ICANN board candidates be “financially independent of the domain name industry.”  He also posited reform of the board selection process  ”not just desirable".  He calls for a "fully independent and non-conflicted NomCom" in place before the next nomination cycle begins.

    The evidence and arguments are compelling enough for the ALAC to agree with them. While we would not wish to eliminate the domain name industry from participation in what must be a viable multistakeholder model of governance, that influence must be balanced and not overwhelming. For example, we do not believe it is a good thing for declared domain name industry representatives to hold the  chairmanship of the Nominating Committee.  The counteracting argument that a non-voting Chair is without power is not only simplistic but mocks what we know of organizational behaviour.  And as we now understand from the NomCom's senior leadership,  no conflict of interest framework exists within the committee governing external financial conflicts of interest – only fiduciary relationships with ICANN itself are addressed.

    We believe ICANN’s public credibility is being strained to breaking point in this regard. And another major embarrassment is hardly affordable. 

    We urge the ICANN board to acknowledge the current gaps in conflict-of-interest guidelines within the community and to immediate steps to engage an impartial third party to review and propose a conflict of interest framework to remedy and relieve the community of the serious inherent implications.

    ------ end -of- statement ------------

     - Carlton

    1. Carlton,

      I believe that the "First Draft" is the version which you have drafted here. Please be so kind to point out if this is not the case. Thanks!

  5. Anonymous

    Hello all,

    Because I think this is an incredibly important topic in the bigger scheme of things, and because it is something that the ALAC can really be a lead on because it is not conflicted (or less so, anyway) as it represents Internet users and not the domain name industry, can I make the following suggestions:

    * Don't write in terms of negatives - i.e. what is wrong, and how wrong it is

    * Instead write in terms of positives - i.e. what can be done and how it can be done

    * Don't squander the ALAC's capital on this topic by making personal attacks or focusing too much on the current state of affairs

    * Instead give examples of what roles need to be given particular scrutiny, and point out the selection systems that are likely to always led to people with conflicts of interest being selected

    * If you can, do some real research into other industries and lessons learnt and provide that knowledge in a helpful way. This is not the first time an industry body has been through this process, so let the ALAC do what is should be best at - reflecting the broader world, using its members knowledge and experience to contribute to the bigger issues

    I would love nothing more than to see the ALAC really step up on this topic and given the community something to really think about. This broader reflection can only come from two bodies - the ALAC and the GAC. If you leave it up to the GAC, the ALAC will miss a golden opportunity to strengthen its useful role within ICANN.

    Just my two cents. Hope you are all well

    Kieren McCarthy

    1. Excellent suggestions Kieren. Thanks!

      A joint statement GAC-ALAC is forthcoming in the long term (this was agreed in the San José GAC-ALAC meeting) but is likely to take too much time for our immediate needs, hence the current process to collect opinion and draft a strongly worded, but also positive statement.

    2. Anonymous

      Hi Kieren:

      Thanks very much for your suggestions.  Very insightful, as usual.

      Best,

      - Carlton Samuels

  6. I tried to comment on the last version of Evan's draft, but I found it easier and clearer to provide a text based on Evan's draft with my modifications.

    -------------------------------------

    The At-Large Advisory Committee is concerned by the ICANN Board's minimal response to the rising levels of attention regarding conflict of interest raised both inside and outside the ICANN community. We are troubled by the possible threats to ICANN's credibility as a steward of the multi-stakeholder model of Internet governance and the sustainability of that model in the global environment, especially in light of clear and present threats to ICANN itself.

    The speed at which Rod Beckstrom's speech in San José has been echoed by the mainstream media merely brings to light longstanding ALAC concerns about this issue. Even in advance of the speech, members of At-Large were engaging ICANN's Governmental Advisory Committee on this issue, and its Future Challenges Working Group had already begun indeed preparing its own analysis. Mr. Beckstom's comments shed a much-needed light on this fundamental problem.

    In general, the ALAC agrees with the substance of Mr. Beckstrom's comments and certainly with the urgency he expressed. From top to bottom ICANN is riddled with conflicts of interest as measured by contemporary best practice corporate governance frameworks. Directly vested interests appear throughout ICANN's leadership structures, including leadership in its Nominating Committee, as well as leadership in policy development directly affecting those interests.

    We fully understand that the domain name industry is a vital and necessary participant in a truly viable multi-stakeholder model of governance. Nevertheless, we believe that the Nominating Committee (NomCom) should be the most neutral so that its selection of the ICANN leadership is done fairly. Those having a financial interest with the Internet industry components shouldn’t be on the NomCom in our point of view even if they provide a statement of interest.

    We encourage ICANN to seize this moment to adopt and apply the Affirmation of Commitments to its many existing conflicts of interest. We echo Mr. Beckstrom's proposal that ICANN board candidates be “financially independent of the domain name industry” and share his concerns about the composition of the Nominating Committee that selects so much of ICANN's leadership.

    We find it crucial that ICANN's corporate culture ensures a robust protection from conflicts of interest well embedded into ICANN processes and implementations from beginning to end.  We share the demands of the US Department of Commerce (in its rejection of the ICANN proposal for continued management of IANA) for a structural separation of policy-making from implementation and a robust organization-wide conflict of interest policy.

    As the ALAC commits to auditing and strengthening its own Conflict of Interest policies, we advise the ICANN Board to acknowledge the current gaps in guidelines within the community and to immediate steps to engage an impartial third party to review and propose a conflict of interest framework -- one that goes beyond mere disclosure -- to remedy and relieve the community of the serious inherent implications. ICANN must also reconsider its outreach and promotion priorities, to encourage the greater involvement of stakeholders who are not financially incentivized to be involved.

    While the ALAC is absolutely committed to its multi-stakeholder model, we feel that ICANN’s public credibility is being strained, which could lead to a breaking point. By addressing these core problems of Conflict of Interest (as a “significant threat” to ICANN), and demonstrating the full potential in its multi-stakeholder model, ICANN will truly prove its commitment to serving the global public interest.

  7. I recommend to add explicitly the NomCom and financial independence in new sections in the COI Policy document as follows:

    Section 1.2.a All ICANN Board Directors shall provide evidence that they are financially independent of the domain name industry before they get selected to participate in such capacity.”

    Section 1.4.A ICANN will request NomCom to adhere, as a minimum, to the principles and practices of this COI.

    Even though I agree with the overall statement that Beau, Carlton, Evan and others have being putting together, the NomCom issue related to the “fully independent and non-conflicted NomCom should be raised in article VII of the by-laws also. I do not see how to incorporate this in any of the four documents. 

    -ed

  8. As one of  At Large's representatives on the NomCom, I'm concerned about the possible effect of the references to it on the 2012 NomCom's ability to work together as a team, whatever its composition,  and to do our job as best we can. In this respect, I hope that Tijanis' draft will be the basis for the final wording.

    Yrjö

  9. I notice that, during the course of the development of this statement, the sentence:

     “The credible evidence so far suggests that top to bottom, ICANN is riddled with conflicts of interest as measured by contemporary best practice . . .”

     This has changed, version by version, to:

     “From top to bottom, ICANN is riddled with conflicts of interest . . .”

    I suggest that the second version is rather strong, given that the only specific instance that is described is the NomCom. 

    If I didn't understand the seriousness of the situation myself, or were I unwilling to acknowledge it, I would greet such a statement with some scepticism (for one thing, “from top to bottom” would necessarily include At-Large).

    Olivier suggested that some specific instances, hopefully meaning more than one. should be added to buttress such a statement, and I agree. On the other hand, Kieren McCarthy's suggestions should perhaps be taken to heart.

    At the least, I recommend that we retain the first version of the “riddled with conflicts of interest” sentence, which, at least, bases the statement on “the credible evidence so far”.

     Gordon

  10. I realize much of this concerns specifically the board members and their potential conflicts, but I hope to raise the issue of financial conflicts of the organization itself, namely superfluous fees paid by some Registrars. ICANN receives 2 million+ each year from 5 companies through redundant accreditation held by shell companies. This has never been adequately explained by ICANN, even though the "batch pool" or "after market" reasons are thrown out. This is 3-4% of ICANN's budget, it's not a trivial amount. The question needs to be raised if this gives certain entities better access to ICANN, especially if those entities also pay roles various policy development and governance areas.

  11. I still believe reiterating some of the comments (see here) I made earlier on CoI are still valid here. There is a big gap in the way ICANN defines its CoI in its bylaws from what ICANN needs to have as a global internet governance body which embodies the multi stakeholder model.

  12. Anonymous

    I agree with the draft document elaborated by Evan and Carlton.  Eventhough the document is to be sent today, I question the term "Direct Conflict of Interest" from section 2.1 (a) as the defiinition includes "direct" and "indirect" financial interests or other links.  At first reading, I wondered why only "Direct"?  I got the answer after reading the definition which includes "direct" and "indiret".  Therefore, I suggest removal of "Direct"

    Fatimata

  13. I completely endorse the Draft "second statement" (which is actually the second part of a single CofI statement of which the first half has already been submitted; the two parts should not be seen as discrete comments).

    1. Yes I agree it is one statement in two parts, but strictly for filing reasons they'll have to be allocated two separate filing numbers.

  14. My concern for any  policy of good intentions is  the need to have  a evaluation  body that monitors and enforces the Confilct of Interest Guidelines (Code)  Perhaps  ICANN should look to have have  a Office of the Conflict of Interest and Ethics Commissioner providing  confidential advice to board and officers and  provide  a  regular evaluation and feedback to the community on compliance

    We need to make sure to remind all those involved  of their obligations and provide them with the necessary information they need to comply with the  Code. .

    1. This could be the first recommendation of the "Commission". I do not know whether the office of the Ombudsman could fulfill that role or whether another office should be created.

  15. Agree on issue of the cross community groups risked with addressing how cOI is addressed with addition of an index endear officer within ICANN that looks into COI not a terror creating role but one that ensures the commui self regulates on this issue. Cross comm group should look into past and present instances of how COI has and continues to affect external perceptions of ICANN as well as causing interal dichotomy.

    TT

    1. This looks like a very valid roadmap that could be suggested for the group to start work. But first step is to have ICANN create the group and I hope that our advice is heeded.