Board Review Workshop Mexico City 05 March 09. >>ROBERTO GAETANO: Good afternoon. Good afternoon. So we are ready to start with a review of the board. Behind me, we have the working group that has been working. I'll introduce. I'll start the presentation, and then we go through some preliminary remarks. Then we go through -- very quickly through the recommendations, and then we open the floor for questions and answers. The purpose of this meeting is more to have an interaction with the community about the different recommendations rather than explaining all the work that has been going on in the working group up to now. So just a quick opening. This review was not stipulated in the bylaws, but the board thought important that we had a review of the board as well, and this review of the board is now correlated with a lot of other reviews that are going on as you might have learned from the presentation in the previous session. So the board review working group is composed by Amadeu Abril i Abril, myself as chair, Steve Goldstein, Thomas Narten, Ramaraj, Rita Rodin and Jean-Jacques Subrenat. So we had the review from the outside contractor which was the Boston Consulting Group, and we had -- we went through already a cycle of public comments and we have now the preliminary report posted. So this is the current state of the art, and this is the moment in which we call the community to provide feedback on the work that has been done so far, and that will go into the production of a final report that will be the recommendations to the board. Just a couple of general remarks before we go through the different recommendations. There is -- the first element that the working group has noticed is that from the comments that we have received so far, between the publication of the report from the reviewers, from the Boston Consulting Group, and that was input to our work, is that there were certain aspects of ICANN that were not completely understood by the Boston Consulting Group or that were not well taken into account in the production of the recommendations. I'm not saying this as a criticism. I want to be very clear on this. The whole purpose of having an external reviewer is to bring a fresh view, a view from the outside, and so that's perfectly correct, but the recommendation that came from that report needs to have then the verification of internal expertise like a working group composed by current and past board members, and then, again, a second validation that is the validation of the community. Some of the recommendations that were presented initially by the Boston Consulting Group might be transformed during this work, and that is perfectly normal and is in the nature of things, but we have very much appreciated from the initial report of the Boston Consulting Group the ability to bring different points of views and also an analysis of a similar situation -- more or less similar situations in other boards. So I think that we are now ready to go to the key points for discussion, and I would like to have Marco Lorenzoni, who is the staff member who is helping us in this work. I would like him to continue, if I can invite him. So -- and another person that is very precious to us in order to help us, I think that you know him very well, and don't worry, we are not going to ask you to give replies with different sheets of different colors. It's going to be a little bit more quiet. But anyway, we need the expertise in order to run the discussion. >>MARCO LORENZONI: Thank you, Roberto. Thank you all. Let's try to go together through the eight key recommendations that were issued by the Boston Consulting Group, and to see what has been the replies from the working group so far. The first recommendation that was issued by the independent reviewers was about the reduction of the size of the board. You may remember that they made two different hypotheses, reduction to the number of 15 or half the size of the board, and the working group had very long discussion on this point, recognizing the complexity of all the issues that are associated with this recommendation. From one side, it has been seen the value of reducing the size of the board. From another side, other members of the working group noticed that the identification of the right size, the appropriate size for the board is much more a consequence of the workload on the shoulders of the board, rather than a priori selection. And on this specific point, the working group did not reach a conclusive opinion and very much welcomes the opinions from the community, by the way. The initial report, as mentioned by Roberto Gaetano, is now published. It's translated into all the official languages, and is open for public comments. The second point, it was about moving to fewer but longer board meetings. Different options also were formulated and different advisories were formulated by the Boston Consulting Group and the working group considers that ICANN and the board, in particular, is already moving in this direction, with the five face-to-face meetings that are currently scheduled for each year of the -- of work. And it was a bit critical on a specific recommendation that was issued by reviewers that was the dismantling of the present -- of the present series of monthly teleconferences and the working group underlines that on this specific part, that the monthly teleconferences would be abandoned. It would be almost impossible for them to manage all the workload they have to this point. Then we go to a recommendation about the consolidation of the board committees and as you know very well, being here in this room also for the previous presentation, the board already took decisions on that. The board already consolidated new board committees and reconsidered the full structure of the board committees, and other minor suggestions are being addressed already by the Board Governance Committee and you will see the full detail into the report that is published. There is a reviewer recommendation about the broadening of skills of the board. In this case, this recommendation is being addressed by the Board Governance Committee and there is a specific point which was discussed at length by the working group which was the proposal of the reviewers to include the chairman of ICANN and of the BGC into the NomCom process. The working group is very much of the opinion that a formal mechanism has to be put in place for making able -- for enabling the chair of the board to represent the need in terms of skill by the board and to represent this to the nominating committee. And there is wide support for the proposals that have been issued on the training of board directors. That are, by the way, under implementation. Then there is another very key recommendation, which is make board membership more sustainable. One of the key points of this recommendation was about the compensation of board members and the chair of the board. And during the public comment to the external reviewers, several and different opinions were collected. You will see them already. They are still published for consultation. And different and contrasting views were expressed, whether or not this is an option to be acceptable and about specific mechanism for compensation. The working group had a long discussion on this, and in reason of the complexity of the issue, decided not to formulate any recommendations at this stage and to ask for further inputs from the community. The same -- in the same recommendation, there is also an aspect which relates to the timing of the seating of directors. The reviewers were proposing two terms of four years instead of the present possibility for two terms of two years each. Different option -- alternative options were formulated in public comment. Some suggested that three plus three plus two subject to renewal. Also in this aspect, the working group seeks further input from the community. Then we have the Recommendation No. 6, which is to build high performance culture at the board level, and the working group which supports all the initiatives that are suggested underlines and reminds that most of the suggestions are already being addressed by the board committee, by different board committees. Recommendation No. 7 is about strengthening the strategic focus of the board, and also in -- also in this respect, the working group supports all the initiatives suggested, and underlines that discussions are already ongoing at the board level. There is a particular recommendation -- well, sub-recommendation, let's say, of this set of recommendations, which is the recommendation 7(f), if I'm not wrong, which is a suggestion for establishing clear criteria for delegating to management the active -- some of the activities that are actually undertaken and to better define which particular kind of activities have to be delegated to the management, and in this respect, the working group considered that the Board Governance Committee should be requested of formulating opinions on -- and guidelines, precise guidelines, on this and to develop also a monitoring system to verify that everything that has been said has been followed. Finally -- and you'll be glad to hear that this is the last one -- to Recommendation No. 8, which is clarifying the board accountabilities, and also in this case, the working group supports the initiatives suggested, underlining that ICANN is already moving in this direction but it is not surely something new, as the bylaws already state very clearly that directors are bound to ICANN and to the Internet community and not to their constituency. There is a last subset of recommendations, in this group of Recommendation No. 8, which is the idea that has been brought up by external reviewers to appoint a board which is representative of the interests of all the stakeholders, and on this specific point that has been also described as a council of councils by some of the members of the board, the working group recognized that the idea is surely worth further discussion. Thank you very much for your attention. Mr. President? >>PATRICK SHARRY: Thanks, Marco. I will now take comments from the floor. Marco, could I just ask you to come back to the lectern for a moment. And before we take comments, I'd like to draw your attention to the last line on the slide there, so that's in recommendation 8, where the working group is seeking particular input on that idea, as Marco phrased it, the council of councils or the idea of stakeholders appointing a board acceptable to all. And Marco if you can just go back a slide, please. Recommendation 5, which is to do with remuneration and the timing of seating of directors is another particular area where the working group is seeking the views of the community. And Marco, if you can go back to recommendation 1, please. >>MARCO LORENZONI: Yeah. >>PATRICK SHARRY: And again, in recommendation 1, about the -- particularly about the size of the board, that's a third area where the working group is, in particular, seeking the views of the community. It would be great if we could get, from our conversation this afternoon, as many community views as possible about these areas. However, as always, we're happy to take comments on any of the ideas that have been raised in the original report and in the working group's report. Perhaps one of the things that we should make explicit -- thank you, Marco -- is that the summary that Marco has put up there is a summary of the working group's interim report, which is posted on the Web site under the "reviews" area and has also been announced on the front page of the Web site, and if you want more detail of what we've done -- if you want more detail of what Marco's gone through there quite quickly, then that's the place to go to for more information. So I'd like to open for comments. Marilyn? >>MARILYN CADE: Thank you. My name is Marilyn Cade. I -- speaking as an individual -- would call to the working group's attention the fact that I submitted written comments to the consultant report, and I would just compliment the staff for having summarized the nine public comments that were received. I would also note that I'm really pleased that this session was scheduled at a time when the broad and interested community could participate in such an important discussion as major changes that might be considered for our board. The ICANN board, to me, is, in fact, what the community looks to to ensure that there is a place to appeal, to inform, to engage with, around their concerns. Geographically, the region spread of the Internet is changing dramatically. I talk about this around the world. I can give the statistics but we all know them. The face of the board and the persona of the board and the persons of the board have got to remain geographically diverse, and I think we have to also for example the mechanism in making sure that we strengthen the participation not only from Asia but also from my gender. But that's not really the purpose of my comments. I'll just give of you a comment. Yes, I'm really glad that you summarized my written comments and posted them, but I don't see how the working group committee -- I don't see how the report you gave me addressed all of the recommendations that were in the initial consultant report, many of which I have very strong concerns about. So I can't tell from your report if you considered everything that the board -- that the consultant put forward, but then you only decided to focus on these. So that's one point and that remains a big question to me. I -- there's several areas that I will go into in terms of strong support, but let me say I strongly oppose lowering the size of the board. And notice I am saying "the board." I'm not at this point addressing the role of the liaisons. I'm saying I object to the idea that you would lower the size of the board. I understand that some people may think a board could be more efficient by having fewer people. You have a huge amount of work, and I have really good news for you. We want you to keep doing all of it and probably more. So I think there's also a question of a board in an organization this diverse being effective, not just efficient. On the question of changing the way we select and elect the board, I think, in fact, that's a good discussion to have, but I don't think you should approach it by having the consultant ask, "Should we completely turn over the approach and you put a solution on the table?" I think you ought to ask the question to the community: "Are there different ways to elect and select our board?" You might, for instance, hear that people would like to revise the nominating committee process to go into a slate approach. So I'm just saying rather than my giving you answers to that, that it -- I don't think you should assume that you would change the way the board is selected. I think you might ask for ideas on how to change or improve the way the board is selected or elected. I do support -- and it's in my written comments -- I do support remunerating the board in a reasonable way. If one were to do a data search on the comments I made at a previous meeting, you might be a little nervous when you recall that I said I'd like to pay the board because then I'll feel better about firing them. That's a joke. But I do think the board works very hard, and that for us to attract the quality that we are blessed with today, and to be able to continue your ability to dedicate your time and your successors' time, it is fair for us to pay our board. I understand there will be issues related to liability insurance, et cetera. I'm on the board as supporting paying the board and paying the chairman of the board at a considerable amount more than paying the members. One more question you had and then I'll sit down. What was the third area? >>PATRICK SHARRY: The third area was on the last slide, we've covered the slate, we've covered remuneration, we've covered the size of the board. They were my three areas, Marilyn. 10 out of 10. Thank you. Can we see if there's a quick response. >>STEVE GOLDSTEIN: Yeah. Marilyn, we take everything you say very seriously, even if you intended it as a joke. [Laughter] >>PATRICK SHARRY: Any other comments from the table? Jean-Jacques? >>JEAN-JACQUES SUBRENAT: Thank you. A quick reply to Marilyn about the remuneration of the board. I belong to -- I don't know if it's a majority or minority on this working group who estimate that actually part of the independence, the intellectual independence of the board, is the fact that it's made up of volunteers. I may be wrong, but for the time being, I still stick to that view. >>PATRICK SHARRY: Thanks, Jean-Jacques. Roberto? >>ROBERTO GAETANO: Yeah. One -- I think that this issue about the remuneration of the board is a very important one, in the context of what we are doing now, an exercise with the interaction with the community. I'm particularly -- rewind. I don't have a strong opinion on one or the other, on remuneration yes, remuneration no. I think that the remuneration of the chair is a special case, and it should be done because it's almost a full-time job, but what I'm concerned about is what is going to be the reaction of the community if we move from a situation that is -- where this work is voluntary to a situation in which this work is remunerated in one sort or the other. So it's very important for me to understand what the community thinks, and -- rather than what different board members might think, and they might have a vested interest in the issue. >>PATRICK SHARRY: Thanks. Roberto. Amadeu. >>AMADEU ABRIL i ABRIL: Marilyn, may I ask you a question? Are you still there? Sorry. You know, I cannot even pretend I look at you because these lights are killing my eyes. >>MARILYN CADE: Yes, yes, I'm here. >>AMADEU ABRIL i ABRIL: Thanks. So the question is you said you're strongly opposed to reducing the size of the board and you were talking about the elected members by SOs and NomCom appointees, and you were saying that you were -- don't touch the liaisons. Okay. My problem is that from any working perspective, the board is the -- thanks a lot. You were there all the time. So from the perspective of the work and the dynamics within the board, the liaisons count as board members because they are there for everything but voting, but voting is the last frequent activity of the board, quite frankly. And normally they have even more voice, historically, than many of the board members. Now, going from that point of view, for me the board has three main reasons or roles. One is providing the legitimacy to this process that doesn't have any other, so that people that come from the community, are appointed by different ways and somehow represent all the community of the Internet users, not just the industry but also the Internet users at large in this process. Second, they have to manage the company, and, therefore, there are some administrative, accounting tasks, et cetera, overseeing the staff. The third one is policy. Because this is a policy body organization, at the end. Do you think that ICANN was very different in 2003 and 2005 regarding these functions? >>MARILYN CADE: You've reminded me of a point I wanted to make, and so let me make it about the role of the liaisons. I'd like to give more thought to this, but I will just say that initially, I wasn't opposed to the idea that the more technically- oriented liaisons would be consulted rather than be a consistent member of the board, but I think that for the two advisory committees, in particular the ALAC and the Government Advisory Committee, I'm a little nervous about not having a nonvoting representative of the advisory committees on the board. And so I think that is a difference, from -- from those dates. I think that the work of the board, however -- and I'm in kind of -- kind of conflicted on this, Amadeu, because the work of the board is, I think, increasingly complex. I think that your work is actually much harder and more complex than it was in 2000 and 2003 and in 2005. I think the political environment that we all live in is much more challenging. So I don't know if I'm -- so I'll make one final point. I was embarrassed for us when the consultant said in the report that when the board is looking out after the interests, that they would be called micromanaging. I'd urge you to be very careful about the idea that you are micromanaging when you are looking out for what you perceive to be your responsibilities. I fully understand the difference between staff and board, and I fully support the idea that the board is about governance, but there are times when a board has to step in. So I was queasy, and still am, about the number of times it's kind of looked like the board would be called into a meeting and someone would wag their finger -- that's a joke -- and say, "You know, you got in my hair too much at this meeting." That is literally not what I think was meant. But think about that, and ask yourself whether the community wants you, in fact, to govern and sometimes govern means stepping in. >>PATRICK SHARRY: Thank you, Marilyn. Quickly a comment from Ramaraj and then Thomas and then we'll move to the next speaker on the microphone. Ramaraj. >>RAJASEKHAR RAMARAJ: Marilyn, I agree on the size of the board. But I thought there's another issue you might want to pay attention and that is the role of the liaisons on the board. There are a couple challenges there. One is the term. Many of them have one, two and three-year terms. So is there a more sustainable term that can come? Two, is what about giving them voting rights. And should there be some thought about that. And I think those are a couple of issues that we may want to think through and get community feedback. On remuneration, you know, we've -- the consultant said that to attract the right kind of board member, it may be a good idea to compensate. We have, as ICANN, have had a number of volunteers come in across different supporting organizations and have done a yeoman's service to ICANN for no compensation. And I think that once we start rewarding the board alone or remunerating the board alone I don't think that's sustainable. I think we will then have to see cross-volunteer room as to who all we need to compensate just as it is in travel support or anything else and then it becomes endless. And so we need to think this through and not just look at it in a limited way of attracting maybe the right people on the board. >>PATRICK SHARRY: Thanks. Thomas? >>THOMAS NARTEN: I'd just like to raise two of the points that you raised, Marilyn. On the roles of the liaisons, and I'm clearly a liaison so I have a bit of self-interest here but that's not really the angle I'm coming from. The board has had a fair amount of discussion about the way the liaisons work today and whether -- you know, moving to a different structure to work better. And I think the singular concern that gets raised repeatedly is if you move to the model where the board asks liaisons when they have something they need to ask, you lose the ability of the liaisons to step in and say, hey, you should be aware of this as you're discussing that. It's the problem you don't know need to ask. >>MARILYN CADE: Thomas, I'd like to respond to that -- that idea -- sorry, that loss did make me very nervous. That's why I originally didn't -- I'm not fully -- you know, I haven't thought enough about this. I worry that if the liaisons aren't with us then they can't actually give us a heads-up, I might have said warn us about something that we should be aware of so I think you've identified a risk. >> All throughout this week I've heard a lot of feedback about shrinking the number of board members. Even those people who agree would be a good thing to agree from the point of making the board more efficient, everyone seems to be concerned about losing the value we have with a large board and all of the sort of cross review you get and sort of the checks and balances. >>PATRICK SHARRY: Thanks, Thomas. Very quickly from Steve. >>STEVE GOLDSTEIN: I'd like to insert a point of information about liaisons. I was certainly one of the people who highly, highly, highly value having the liaisons around just about all the time so they don't lose continuity and so they can, as Thomas said, jump up and say, hey, you ought to know this. But we have revised or have under consideration by the board revised common charters of most of the board -- I'm sorry, revised common charters for board committees such that most of the board committees, omitting something like the audit committee, will be able to include liaisons now as members of board committees. Although at present they'll be nonvoting. So I think we are recognizing the very high value that liaisons bring to the board and we'll be incorporating them more and more into the activities of the board. Thanks. >>PATRICK SHARRY: Thanks, Steve. Now I'm cognizant of the line there, and of an English phrase that's something like brevity's the source of wit, and I'm conscious that brevity will also be the source of getting us to the bar on time, and so if I could encourage you to make your comments as short as possible and we'll try to encourage short responses from the table as well. Please go ahead. >>RON ANDRUFF: Thank you very much. Ron Andruff, R and A Parters, members of the business constituency but speaking as an individual. Having said that, I'm also speaking for many voices that we've spoken with over the course of this week or during the -- since these recommendations have come down. And I would like just to start by saying I support many of the things that Marilyn has said and underscore them, but there's a couple things I would like to bring out in this dialogue. The first comes to what Marco said when he first brought forward these points of discussion today. And he mentioned that the Boston consulting group had looked at similar situations. I don't think there's a similar situation. Quite frankly, many times people ask me, is ICANN like the U.N. or how does it work because you've got all these people and where do they come from and how does it -- there's nothing like what we have here, it's a very unique animal. I think all of us would agree on that. So I think we need to be mindful when a consultant said I've looked at similar situations, I don't know what they've looked at because there is no similar situation, in my view, and in the view of many others. Speaking specifically to the points, the board is now, in the view of my -- I'm sorry, in the view of myself and many, it must remain large enough to be representative of the community and therefore, in our view, the current size is appropriate. Reducing the number of voices does not make it more efficient. It may mean that you may have fewer people making more noise and the medium might be just as long so reducing the number of voices is not the way but clearly we need to make sure that whatever the size, it represents the global community of Internet users. Speaking to point number five, compensation, the -- we are now in steady state as many people. 10 years old, the Internet is here, we're moving into a whole new world in terms of Internet. Many are calling it Internet 3.0. The point here is that we need to make sure that the people who are sitting at the board level, this is a second job. I don't think any of you will disagree the number of ours that you put into ICANN is an enormous amount of work. And therefore, we need to look at the -- at attracting people who have the ability to guide our organization forward in the coming decade. It's true that it may be a slippery slope when you say, well, we'll compensate this group and then that means we need to compensate GNSO and so forth. That's not the case. Let's be very clear. The board has the last responsibility for ICANN. And particularly, the Chairman of the board. So the Chairman should be compensated at least in six figures, if, in fact, the CEO and other staff members are compensated in six figures. So this is a very, very important point that we recognize that the quality of the people that lead our organization forward in the coming period must be the best we can get. And I can assure you, for all the work that you do and all the hours that you put in, if you were really to share that with a candidate and say that "by the way, you get paid nothing," I don't think you're going to find those people. I wants to make sure we're mindful of these things and thank you for taking this input. >>PATRICK SHARRY: Thank you, any quick responses from the table? Amadeu, very quickly, please? >>AMADEU ABRIL i ABRIL: No, I have the same question for Marilyn. Do you really think that the board is today much less representative from the community than it was in 2003 when there were three representatives from each SO? I don't think so. >>RON ANDRUFF: No, I think we're growing, I think we're evolving and we're developing. I happen to be a voice that's often said I'm not sure why we have NomCom. Everyone else comes from specific community -- or specific parts of our community. So putting up an independent voice is -- when I hear that phrase, I go ballistic because I like to think we all have independent voices so from my point of view NomCom should be abolished right through the organization and it should be representative people of the organization. >>PATRICK SHARRY: Thank you, let's go to Chuck. >>CHUCK GOMES: Chuck Gomes from VeriSign. Regarding recommendation one, to reduce the size of the board, I support that with qualification. I think some reduction in size of the board would -- could increase efficiency as stated in the report. But later on in that same section and, by the way, I compliment you on the report, the interim report, it was very easy to follow and very helpful, but it talks about geographic and cultural diversity on the board. And those are absolute essentials but it doesn't talk about stakeholder diversity. And I think you really have three areas that need to be represented on the board. Not as representatives from specific communities, we know that's not the model. But it's not enough just to have geographic and cultural diversity. You also need to have shoulder diversity. And so if you go to too small a board, I think it's almost impossible to meet all three of those objectives in any kind of reasonable way. So of the options that are on -- in the report I would support option A, the first option, because I think it does accomplish some increased efficiency, at the same time it doesn't make it too small. I respect, though, the challenges with respect to that as well. With regard to recommendation five, and in particular the remuneration issue, I, for one, because for at least 33 out of the 34 meetings have seen how hard you work as board members, am very comfortable with that, realizing that there's some other issues that need to be dealt with because the workload for board members, in my mind, doesn't compare to any other board I've seen. And last of all, the last issue, that stakeholder groups get together to appoint a board acceptable to all of him. I'd like to know how we do that in our diverse community. I think that would be very, very challenging. >>PATRICK SHARRY: Thank you, Chuck and thank you for being so concise. >>STEVE GOLDSTEIN: Patrick, I've got to jump in for just a second please. >>PATRICK SHARRY: Please. >>STEVE GOLDSTEIN: Somehow I've been dubbed the sheriff of the board reminding people of their position vis-à-vis conflict of interest and things like that. I don't know how that role fell into my lap except that I was the chair of the conflict of interest committee for all of about three days before it got merged into the governance committee. But Ron and Chuck and Marilyn, while we certainly appreciate your sentiments about compensation and so forth, we're also facing a situation where we're considering applications for new gTLDs and new ccTLDs and so forth. And if there is a -- we really need you to state your relationship vis-à-vis those issues so it is very clear, you know, that there's no potential conflict of interest in what you're saying vis-à-vis compensation for the board. I'm sorry to bring this up but I hope you'll appreciate it and thank you. >>RON ANDRUFF: Absolutely, Steve. Ron Andruff speaking, you're absolutely right, and I beg your pardon for not having stated that. In fact, we are looking at the new gTLD round with the consideration to apply for a TLD and I beg your pardon for not having stated that. >>PATRICK SHARRY: Thanks, Ron. Roberto. >>ROBERTO GAETANO: Just one point further. I think that I see a long queue and I'm very much interested in what the community wants to tell us. And I would just invite ourselves from this side of the table to -- to intervene only when necessary but to give more space to them. I don't want to have a five-minute question and 15 minutes reply. Clarification on Chuck. When he's talking about option A, you are talking about the option of reducing the size to 15 members. I'm just saying this because not everybody might have the -- know the document by heart. >>PATRICK SHARRY: Thanks, Roberto. Vanda. >>VANDA SCARTEZINI: Thank you. One point, well, most of the colleagues already said. You know, the board's -- this board is not the company board, it's much more a community board. So we cannot treat this board as a board of ICANN company. So it's about the -- the board must represent better the community, geographically, in the gender, in the cultural approach, and all the stakeholders. So I don't see to reduce, instead, I see to enlarge, probably, during the process of going on on ICANN. The second point is I don't want to have a closed view for this kind of issue about remuneration. I know about the work that there is a lot of volunteers as Ramaraj said and this can be very difficult. I can see this chair as another kind of position because this chair really needs to dedicate much more time for international contact and so on and so on. But considering the board, maybe we should use the same as the Congress. When you are at the stage, you are working. You have 10 days' paid. But not as a regular payment, as this could be a kind of job. I'm afraid if we have this kind of a situation, we're going to have huge campaigns to go to the boards, not only because you want to collaborate, but because you are looking forward to get some money extra for your life. So considering that and talking to the developing community -- countries, community, it's -- they are afraid they will never have time or money to do that. So starting campaign means you need to call everybody, you need to fly, you need to attend meetings and so on, and what is the chance for Africans, Latin Americans and so on? So let's think about remuneration in a more clear and wide view. Because this is not a board company. Thank you. >>PATRICK SHARRY: Thank you, Vanda. And we'll go straight to Alejandro. >>ALEJANDRO PISANTY: Alejandro Pisanty (Speaker off microphone) on the issue of remuneration but I think it's useful to bring in one point and valuable to bring in another one. The useful one is that in further consideration of the issue of remuneration, unless it has been dismissed, it would be very useful, I believe, for the working group and the board to consider issues of equatability of this remuneration and implementation before going forward. Things like fiscal implications for people who are not based in the United States who get remunerated for this work may be nightmarish. The issue of how and where to pay this remuneration may be a nightmare. And it could find -- you know, certain situations could bring ICANN into complex positions like being in collusion with tax evasion, into fiscal havens and things like that, tax havens, sorry. And as I mentioned the question of equatability. Imagine a figure like 20 or $50,000, it may be dramatically insufficient as compensation for some people and in other countries unless you go into the complexities of cost of living adjustments of COLAs, you may be creating empires. This implementation issues, these detailed issues may be issues for consideration. Vanda has already pointed out a very significant point. Compensation may be an incentive for getting not the best people but the people who, in fact, find themselves that instead of competing in their own fields and being top excellency carriers of their fields will jump into these remunerative jobs. Second point I mentioned one that was going to be value on compensation. I -- there, the consultant who judged the directors that worked for free sometimes 30 hours a week in addition to regular jobs were bad just for being cheap. I dare to show -- I dare this consultant in the name of all sitting directors to show who of us is bad for coming free. And I would like to point out also this has been mentioned by Vanda but my angle I think cuts much deeper. I found this report, this evaluation extremely flawed, extremely lacking, I find it extremely disappointing. I think the board or management of ICANN must really call the consultants into account. They consider in operations management report, they considered, you know, an oversight of a company of 50 or 100 people and they found that there were too many people were on the board, that the board should sit up straight at the table and have good table manners but they didn't consider anything. It doesn't show anywhere in the report. As Vanda pointed, that the [[(inaudible) policy, it shapes decisions that have huge consequences for the Internet. It does nothing about policy advice, about policy discussions. In fact, by -- many of the board adopted many of the recommendations to make the board more efficient, it will well find itself giving short shrift to issues that merit in repeated in-depth discussion and consideration. >>PATRICK SHARRY: Thank you, Alejandro. Bertrand. Before you start, Marilyn, can I just put you on notice that I'll give preference to people who haven't already spoken. >>MARILYN CADE: I was just voluntarily doing that. >>PATRICK SHARRY: Thank you, thank you. Bertrand. >>BERTRAND DE LA CHAPELLE: I'm Bertrand de la Chapelle, I'm the French representative in the GAC. But in this discussion, I would like to speak more as a contributor, not as a -- not as an official position. It's just a delicate issue and I don't think we have at the moment all the different pieces. So I would like just to contribute a few elements. First, the notion that this organization is not a company. And that the biggest flow, as Alejandro was saying in the report and in the review, and I expressed that maybe in intemperate terms in Cairo, was to basically address this and make recommendations that might have been good in their own component, but for really the wrong reasons. It was basically applying a boilerplate corporate -- board corporate governance analysis to an organization that is unique. First point. The second thing is that whenever we discuss the review of the board and the evolution, as I've said in many other sessions, all these are moving pieces. These are components of a general evolution of the organization. And so in discussing what the board is and what it -- how it should be composed, we need, first of all, to see what exactly its role in the organization is. And that would come to a notion that the very fact of using the term "board" is bringing a mental framework that is leading us maybe in wrong directions. The reality, I think, is that the function of the board is more a function of a council than a function of a board. It is not a remote supervision, once or twice in a year, looking at if the accounting is okay and if the company's going well. It is, in fact, when you think about it, one of the components of oversight for this organization, without getting into a debate on the Jan and so on -- JPA and so on, the reality is that the people who are here on the board are the ones who are here to ensure that the organizations is serving the interest of the community, that the processes are developed in the appropriate manner. Either way, it is a council. And this has a consequence in terms of diversity representatives probably the numbers. I'm not adamant on a larger or smaller board, but it's an important... The next point is the attention between independence and accountability. There's a very big difficulty of board members I suppose to be both independent as they're supposed to be and accountable to the community that has nominated them. If you are here to represent their interests then you're not independent. And if you're independent, you cannot be accountable. I would make an analysis with the European Commission. In the European Commission, the government designates some person. But once this person has been designated by one entity, this person is independent because its task is with the other ones in the commission to define the common European interest in an independent and collegial manner. This board is a collegial council. And in this respect, I would say that, as the last point, there's a question of scalability here. And I'm wondering whether the board -- and, by the way, the staff in certain ways -- is not taking too much on board. Too much on its own. And basically becoming more a decision-making structure than an oversight structure. I would apply to the thinking and the discussion of the evolution of the board or the council the same kind of thinking that was applied to the GNSO Council when the reform said the GNSO Council should be less a legislative body than the steering actor for the process of policy development. The fact that for instance every review and I'll finish by that, every review is basically handled by a board working group with only input for the community is maybe taking too much, putting too much on the board. There should be probably a greater distribution of activities below. And the remuneration I won't get into. >>PATRICK SHARRY: That's great, Bertrand. >>BERTRAND DE LA CHAPELLE: We shouldn't be radical on that. It has to be explored and nobody can say at the moment one not at all or, yes, of course. >>PATRICK SHARRY: Thank you, Bertrand. Andy, and I know I can rely you on to be brief. >>ANDY LINTON: I'll try. I've got two hats that I'm going to wear briefly here, because in New Zealand we have to do that sort of thing and wear multiple hats because there's not that many of us. The first hat I'm going to wear is, I'm a board member of the domain name commission in New Zealand which manages the dot nz name space, and we remunerate our board members as we do all the sort of working groups and committees that work for Internet NZ, and we did submit a letter to the review saying that we supported the idea of remuneration. I'm not going to read it out to you. I'll just have it out here to remind me. But the main thing -- one of the main points that we wanted to get across there was that this remuneration could be voluntary, so if people don't feel need to take the money, there's no reason for them to do so, and that can be [inaudible] in to some sort of conflict of interest type register and so on. They didn't take the money, that means they must be independently wealthy or working for some other company because that's the only way people can afford to do this. The second point, some years ago, I served on the board of PIR, Public Interest Registry, which manages the dot org space. I was persuaded to do it. I took the job on. In the first year, it was a busy first year because we did the move from VeriSign to Afilias and so on with the registry. And was asked to stay on the board at the end of the year. And I couldn't afford to do it. I work for myself, and basically time that I had to take to do PIR board work was time I couldn't be earning a living. And because I live in New Zealand, if I wanted to go to a board meeting -- a board meeting that lasted a day took a week of my life. And if I had to do, like, something like the ICANN thing and I was on the board here, I would be taking many weeks of my life, and that applies to people coming from people coming from Africa and it applies to people coming from remote parts of the world. And they, as well, can't afford to sort of put themselves forward. So I've been talking -- a couple of people have talked to me this week, you know, in terms of the NomCom saying, "Are you interested," and I said, "I'm really interested in doing some more work like this but I can't afford to do it." So I think you should think about that when you -- when you look at the remuneration aspect of this. So that's me. >>PATRICK SHARRY: Thanks, Andy, and thanks for being so concise. Thomas? >>THOMAS ROESSLER: I will be speaking with the two hats that I'm -- well, I wear three hats here, in a way, and I will speak with two of them. I'm currently the technical liaison to the ICANN board, appointed by the World Wide Web Consortium, I'm on the World Wide Web Consortium's staff and the first point I would like to make is fundamentally in that function, and the point here is that we think it is critically important that the ICANN board keep a close and tight connection to the technical community; that that connection probably, as Thomas Narten pointed out, needs the ability of direct participation in the board's deliberations. The second point is one that I make more with the hat of a long-time participant in this community. This is my third appearance here. The last one was on a nominating committee. And the point goes to recommendation 8(f), about the council of councils. The liaisons, the supporting organizations, the nominating committee, they're all different paths into the board. And each of these paths has a different failure mode. I think it is really important for the integrity and accountability of ICANN as a whole that there not be a single path leading into the board. The diversity of mechanisms is critical, and I also think that the lack of accountability for the nominating committee itself, coupled with a group of people who are deeply rooted in this community, is a really important property of that process and is an important property that enables them to pick the best candidates they can identify. That's a very different dynamic from a, quote, council of councils, and it's a very different dynamic from appointments through supporting organizations. I think we need the mix. >>PATRICK SHARRY: Thank you, Thomas. Next, please. >>DESIREE MILOSHEVIC: My name is Desiree Miloshevic. I'm one of the members of the NomCom, and -- but I'll speak in my had personal capacity. I want to make two brief points. One point is with regards to remuneration of the board members, and the second one is about the NomCom and something that Ron Andruff said earlier on, that I want to correct about the usefulness of NomCom. So the first one goes towards the remuneration of the board and maybe I have had a different way of thinking about this issue. First of all, I do not know if any of the board members currently on the board, in the view of a new global economic downturn, has any issues and problems and economic difficulties, let's say, in attending the board meetings, in addition to the time. I do want to thank everyone who is putting their time into this work and doing it in the form of public spirit. So that brings me further to the recommendation that maybe we're not ready to adopt the remuneration policy across the board, but we really need to look if you want to maintain geographical diversity on the board, what other potential board members, what difficulties they may be facing, and have some different kind of mechanism to support their participation. So lastly, I think that NomCom is doing a great job, and if we are lucky, we won't all get just retired professors and people who have a lot of time on their hands or wealthy people, but we will get also some more diversity as well. Thank you. >>PATRICK SHARRY: Thank you. Roelof? >>ROELOF MEIJER: Yeah. Roelof Meijer, CEO of SIDN, the registry for dot nl. As an opening remark, four years I'm still not used to it, that we have a discussion -- that I have to have a discussion with people who are 25 meters away from me up on a stage. Especially if we discuss about the board with the board, I think it would be better if we could do it somewhere in this room, like we did on Monday. Second opening remark, I do not intend to offend the present members of the board because I think we presently have a very good board. However, what I agree on with the previous speakers, I think, is that on the ICANN board, we need the best. If we all conclude that, then I don't understand how through elections of stakeholder organizations we think that we can get those best. In my opinion, you hunt, you assess, you contract, you pay, and you evaluate, if you want to have the best. On the matter of the board is overloaded so we can't reduce it in size, I think you first reduce it in size, make sure you have professionals that will have little time so they will be efficient and effective and you will solve the problem by itself. They won't go into the details but they will stay on the strategic issues. >>PATRICK SHARRY: Thank you, Roelof. I'm going to close the line after Marilyn here, and put the people at the top table on notice that after Marilyn, I'll provide you with a chance to reflect on some of the things that you've heard in the comments today. >>KUO-WEI WU: This is Kuo-Wei Wu from Taiwan. And I don't want to repeat those of the people who already comment and I agree with many of them. I really am disappointed about this consultant report. It's really bad. And second of all, I think it's -- you know, I think the consultant really doesn't really understand what is ICANN -- really the key issue is. I think ICANN, the key issues are the Internet Governance issues, and the policy would be the major focus for ICANN, and I didn't see anything in the report talking about these issues. And for my personal -- for seeing, actually I would say if we are not going to create or we are going to solve the new issue in the future, that ICANN will be in the very dangerous position in the next two or three years where maybe you have trouble because, you know, we are lacking of the critical issue right now, the Internet community that people are really concerned. And the problem is, we can see what's going on, because I think in most of the ICANN meetings, most of the attendees we fully agree most of the domain name industry people was here, and this is good. But unfortunately we lack of the other people from the Internet community. For example, tell me how many ISP people want to come here. How many content provider people want to come here. How many IETF people want to come here. Nobody want to come here. Then you just start looking at one angle, in one area of the Internet community, and that is the problem. I think that is really the big problem for the ICANN looking in the future, in the next 10 or 15 years. And sooner or later you will see you are going to, you know, reach the same problem as the ITU 10 years ago. You know, the ITU have a problem. Remember the time it almost bankrupt, because they don't have a good issue and really meet the people who want it, and I think that is very important. If the consultant report cannot come up with this as a key issue in the report, the ICANN should not pay them money. >>STEVE GOLDSTEIN: Who do you represent, please? >>KUO-WEI WU: Say again? >>STEVE GOLDSTEIN: Please, could you state for the record whom you represent? >>KUO-WEI WU: I represent myself, and actually I tried to help ICANN to survive in the 10 or 15 years after, because this is very important. Remember that ICANN is very important in the Internet Governance for all -- the whole Internet community. I don't want to see ICANN fail, and so it's my personal opinion if ICANN fail, it's no good for the whole Internet community. So it doesn't matter who I represent for. I really concerned that the Internet community survives, and ICANN is important, and so please be careful and look at the policy issue instead of five board members, 10 board members. That is not a key point. >>PATRICK SHARRY: Thank you, Dr. Wu. Marilyn as you start there, could I just ask you to comply with Steve's request of earlier, just to let people know your affiliation and so forth, where appropriate. >>MARILYN CADE: Sure. My name is Marilyn Cade. I own a small consulting company called ICT Strategies, mCADE, llc. I advise two companies who have attended and participated in the ICANN meetings. One of them is AT&T. AT&T represents itself at ICANN. I also advise Overstock. They're interested in o.com. They represent themselves at ICANN, but I do advise them. I spend far more of my time at ICANN, like almost all the rest of us, because I want the organization to survive. So I have three things to say to you, and the reason I came back is I wanted to cover a couple of points. First of all, in following the comments that were just made, I've really been wondering how we managed to give the direction to the consulting company that misled them about what our DNA is. You see, they did think that we were corporate, and they -- and I understand. You can learn things from corporate boards. But this organization does have unique DNA, and I do think the report was very flawed, but as I said in my written comments, I think maybe we get -- took them in the wrong direction. So now I'm going to talk about the DNA and how it relates. I'm reading Recommendation No. 4, small letter (g): "Occasionally invite prominent company directors to meet the board or to dinner to talk about the role of the director." [Laughter] >>MARILYN CADE: Really? I am just astounded! Nontransparent meetings with, God knows who, so that you can talk about their business? We need to do more to get folks like that to come and participate in the community. Yes. But I really don't think the answer is fireside chats or private, closed dinners. Which brings me back to the issue of independence. I'm really shocked. You know, I have complete faith that every one of you can be independent, regardless of whether you're paid or not, and I'm not worried about that, and I'm surprised you are. So I want to hear more from all of you who are concerned about it, and I'd like to talk to you individually about it. Many nonprofits around the world do pay their directors, and in some cases they do it because they believe that that ensures independence. So clearly, we do need to think more about this, but I'm going to say we need to think about it quickly. Because it is true, this organization has to survive. And right now, we've got a board that is faced with a huge number of challenges and you're going to be going through a search for a new CEO. So you're going to be doing even more work. I actually think we should move ahead with paying the chair and paying the board. One more comment about paying beyond that. I have been a councillor. Many of you know that. And I do an incredible amount of work as I did then, but the reality is, there is nothing as hard as special or as responsible as being on the board. >>PATRICK SHARRY: Thank you, Marilyn and thank you, everyone, who took the time to make a comment this afternoon. Can we return to the top table and get some reactions to what we've heard? Roberto? >>ROBERTO GAETANO: Well, I will start. First of all, I've heard a lot of criticism for the contractor who did the initial report. I have to get one thing straight here, that to get somebody who had experience with other types of boards, and that was looking at things from the outside was a choice, because I think that although ICANN is obviously a completely different organization and so on, I think that sometimes we have to confront ourselves with the outside world. I'm not saying that then the contractor -- the moment that we have a report from an outside consultant that has certain recommendations we have to adopt them. We have to filter them according to our DNA, as Marilyn calls it, and I completely agree, but I think that out of the things that were brought, the elements that were brought by the consultant, there are a couple of ideas that we could pick, and that would not have been coming to surface if we were just thinking of things in our community. So, yes, ICANN is a different animal. It doesn't have to behave necessarily like everybody else. But sometimes there are some ideas that you can pick from the outside that can be good for doing a change. The second thing is that I'm extremely happy to have had this sort of feedback, and I will invite people to submit more comments and to provide more input to us. I have heard different opinions on the different subjects. I've heard contrasting opinions on some of the -- on some of the issues, like remuneration or size of the board or even about the role of the NomCom and so on. At one point in time, this working group, in preparing their recommendations for the board and then the board itself in taking a decision, will have to take a decision. I would like to assure the whole Internet community that the decision that is going to be taken, of course, cannot make everybody happy. Those who will be on the side of the people whose opinion has not been taken fully into account, because if you have different groups that say -- that give different answers, like remuneration yes or remuneration no, well, the board at one point in time cannot say remuneration half and half. It has to say yes or no. And so somebody's going to be unhappy. Please don't walk away from this process with the impression that the board -- that this working group in the first place and then the board has not listened to us. We listen to you. It's that sometimes when we have to make a synthesis, we cannot make everybody happy. >>PATRICK SHARRY: Thank you, Roberto. Steve? >>STEVE GOLDSTEIN: Thank you, Patrick. It would be very difficult for me to speak directly to the issue of compensation because I obviously have a built-in conflict, being a board member. Current board member. But let me speak to the organization itself. I don't know if you would characterize ICANN now as being a teenager headed toward adulthood or, you know, where in that continuum between a youth and an adult you would characterize ICANN, but definitely ICANN has to be moving toward greater maturity. Also, as the nature of the relationship with the U.S. government is bound to change, ICANN is very definitely going to have to attract some strong allies because, quite frankly, in the not-too-distant future it's going to be cut loose and be swimming in waters that are shark- infested. This is my personal opinion as I look at ICANN's future. In that regard, I think that we're going to need directors in the future who have what I would term "firepower." So I'd just leave it as an open question: If you in any way agree with my own personal views about ICANN and its future and the kinds of directors that it will need, what do you think about compensation in that regard? Thank you. >>PATRICK SHARRY: Thank you, Steve. Amadeu and then I'll come to Jean-Jacques. >>AMADEU ABRIL i ABRIL: (Speaker is off microphone) okay. So I will learn it by the end of the meeting. The problem here being in this working group is how you take your own personal views, your comments, and the independent review report and try to make sure that you are not trying simply to impose your own views. My own views are quite clear that the board size doesn't matter, and my personal view is also that we are not careful enough when we talk about, you know, representation and when we talk about the need or the access or the lack of micromanagement or oversight. My personal experience from inside the board for four years, and outside the board for the last five years, is that the board tends to micromanage the administration and to completely abandon the policy direction. It's policy reaction more than policy direction. Let me exaggerate as I do always. The board too often pretends to write the budget and not let the staff do and, you know, contribute zero percent% to any RFP for new TLDs and only react when that's published. I repeat, this is an exaggeration but you understand what I mean by this difference between micromanaging the administration and not being enough involved in policy direction to the staff. So the staff is, in my view, too free in that area and too micromanaged in the administrative part. But both things are important. And the representation as well. I disagree of the future with ICANN with Steve. I think ICANN has been in a very difficult political situation from the beginning but now is much stronger than it was 10 years ago. And at the end, if it does its job correctly, and it has the support of the community -- not just of the industry -- it will have all the political allies it will need. And if it fails there, it will have no political allies, and who is sitting in the board table will count for nothing in both cases. Or, I mean, will not -- sorry. Will not be the critical element. The critical element is having or not having your support. And for -- having your support, we will need, you know, that this works. So -- oh, the independent review has understood nothing because we are not a company. That was my first, second, and third reaction. And the fourth was: Wait a second. We are also a company. We are not just a company, but we are also a company, and we need to at least ensure some oversight -- not micromanagement over the staff functions -- some, you know, oversight of the financial procedures, from the governance procedures, et cetera, et cetera, et cetera. So one of my views was why don't -- if we need to have a very wide board for the representation legitimacy issues, why don't we split them into two councils, so to speak, those with more vocation, with management and governance would be on one side doing that, those with more vocation on policy direction will be on that side. And the important things would be voted by the board as a whole, indeed, with an executive committee. But I don't think this will fly either because everybody will be -- would like being in both sides at the same time. It will be with two committees of the whole at the end. This was not taken into account by the independent reviewer either because they said, "Well, you know, this sort of different boards or separate boards is only known at different layers, not in parallel in places like Germany," which we all know is completely marginal regarding corporate law. It's just the other standard, but not theirs, and that's the problem with cultural diversity. We tend to love what we understand and we understand what we tend to love -- >>PATRICK SHARRY: Amadeu, could I just ask you to close up quickly so we can move to Jean-Jacques before we run out of time? >>AMADEU ABRIL i ABRIL: Yeah. So the question here for the community is also I would like having some input when you say, "Micromanagement" or "representation" whether you see also this difference of functionality in the board as I see in what's the administrative part or the management part or the governance part and the policy part. >>PATRICK SHARRY: Thank you, Amadeu. Jean-Jacques? >>JEAN-JACQUES SUBRENAT: Thank you. Yes. I'd like to react to some of the statements and especially contribute to looking ahead. Board? Council? Why not? Just a little note. I've been discussing with members of the French- speaking community and also with the interpreters and I suggested that instead of "conseil d'administration" which has the word "administration," that means to administer, to manage, that we should use, at least in French "directoire" because that gives, I think, a sense of collective responsibility. Of course "conseil d'administration" also does that. But perhaps more it gives a sense of direction. I'd like to come back to what Bertrand said. I think that is really the important point. This word has to set directions. It has to concentrate, to focus on important issues. There was the issue of representivity. I personally was rather attracted by Thomas Roessler's remark about the fine mix or balance which is currently the case. Things can be improved, but I support his point that this mix does correspond to the kind of duties which we are faced with. Just a small remark about retired professors. [Laughter] >>JEAN-JACQUES SUBRENAT: I think that we may be missing a point if we want to make this board or, in fact, any part of ICANN gender- specific or age-specific or whatever-specific because I think that it's extremely important we see that the Internet, by its very constitution and novelty, goes beyond those fractures. But in any case, for me, the central issue is the focus on strategic issues. And that does not exclude the board from looking at detail, if and when necessary, and that's why we have an Audit Committee, et cetera, et cetera. What you have set up, many of you who are in this hall and who have helped set up ICANN in the early stages, and what we are trying to do today, I think is of relevance not only to ICANN. In fact, not only even to the Internet world. But if we get this right, if we get public participation right, if we get rules of governance and representation, if we get languages and proper consideration for geographical balance right, perhaps we could also be a model in other areas of public trust. Final word about remuneration. As I said earlier, I don't have very strong feelings about this. But I do want to acknowledge the input of this evening's discussion, and especially to Vanda, who suggested something I had not seen clearly enough, that perhaps some form of remuneration on meetings attended and prepared basis would allow, in fact, for one of our duties, which is to ensure sufficient diversity from people from emerging economies or emerging countries, where that is truly a difficulty. Thank you. >>PATRICK SHARRY: Thank you, Jean-Jacques. And unless there are some comments from Ramaraj or Thomas, I'll just say thank you again for your comments this evening. I'll remind you that there is a public comment forum online on the ICANN Web site that will be open, and we'd very much encourage you to submit comments there. People who didn't feel that they could speak to the microphone today -- I'm sorry, I'm just going to move to close it off. Roberto, would you like the last word? >>DESIREE MILOSHEVIC: Could I just respond. If we get lucky, we'll get retired professors. [Laughter] [Applause] >>JEAN-JACQUES SUBRENAT: Sorry. >>STEVE GOLDSTEIN: Don't forget retired ambassadors, too. [Laughter] >>ROBERTO GAETANO: No. I think I've said what I said before. I would only really thank the people for having provided the comments, and invite to have -- to have more comments. Thank you. >>PATRICK SHARRY: Thank you. Thank you to our scribes and to our interpreters, and thank you for your attendance. [Applause] >>STEVE GOLDSTEIN: Shortly, your uncompensated board will convene a working session until probably way past midnight.