[At-Large] [BMSPC-2020] Board seat 15 selection
karl at cavebear.com
Fri Nov 22 18:21:57 UTC 2019
On 11/22/19 2:32 AM, Evan Leibovitch wrote:
> The sad truth is that ICANN (and as we've found out recently, ISOC)
> have no actual external stakeholders. In a for-profit the fiduciary
> duty is to stakeholders. In a normal nonprofit the fiduciary duty is
> to the stakeholders. In ICANN and ISOC, there is no external
> accountability so the fiduciary duty is soley to the institution
> itself. If this is an innovation of governance it's one I can do without.
Wow, you, Alan, and I all in general agreement! This is a rare (and
positive) event that ought to occur more often. ;-)
One minor nit. In a regular corporation the duty of directors is to
take actions (or refrain from actions) with the goal of improving the
corporation. What that means is as vague as it sounds. But it does not
mean what some have described as "increasing shareholder value",
although that can certainly be a consideration.
In a public-benefit/non-profit such as ICANN is under California law the
duty of directors is slightly different. Again the goal is to act (or
not act) in order to benefit the corporation. But the measure in this
case must necessarily include consideration of how the public benefits
from that act/non-act. In other words, a director's duty must ask how
well the corporation is acting to benefit the public. That's also a
quite vague standard. And the sense of "public" is broad, in that it
means the entire public not just a narrow selection of "stakeholders".
Yeah, this seems hyper technical and, at the same time, very vague. But
the distinctions are important and need to be recognized as part of the
calculus that directors have to use when making decisions even if at the
end the result in a given decision are the same.
Directors of non-profits are under great personal risk (to their
personal assets) should they fail to exercise these duties. (Some
rules, such as the US IRS's rule about "intermediate sanctions" are
utterly Draconian.) As a board member in ICANN and elsewhere I find it
useful to go through a little process in which I write down, in a ledger
or in the minutes, the reasoning for any particular decision, revealing
the evidence, the criteria used to measure that evidence. That creates
a thing called a "business judgement" which can not only be a defense
but also tends to induce better decision making.
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