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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