[At-Large] ICANN Accountability Mechanisms

Karl Auerbach karl at cavebear.com
Mon Jan 3 01:21:44 UTC 2022

On 1/2/22 15:41, Carlton Samuels via At-Large wrote:
> This is a story in reprise from heated conversations many years ago at 
> the Sloan School of Management when corporate strategy was discussed.
> I readily confess that I am one who believes that it is the CEO who must 
> answer to the Board on the matter of staff output.

It's useful to remember that ICANN is a California corporation and, as 
such, ultimate responsibility (and liability) is vested in the board of 
directors.  (That responsibility is actually greater for board members 
of non-profits than it is for for-profits.)

That's why California law explicitly and clearly gives each individual 
director the "absolute right" to examine any and all corporate papers, 
ledgers, facilities, and other property or relationships.

When I exercised that power (which took a 18months of litigation with 
ICANN, which I won) I took a look at the corporate ledgers.

I found nothing horrible or criminal; rather I found the usual kinds of 
things that go awry in new organizations.  For instance I found a lack 
of control over staff travel.  Indeed I discovered on staffer who had 
traveled around the world several times in one year, stopping at nice 
places at prime times of year, like Davos in the ski season.  ICANN has, 
I believe, long since put into place better travel controls as a result. 
  (I also discovered ICANN also had no employee handbook or rules to 
govern staff conduct.  That, too, was fixed as a result of my inquiries.)

It can be disruptive when board members do exercise their power of 
inquiry, so a sense of discretion and scale ought to be self-imposed. 
For instance, I chose not to do a physical inspection of the L-root 
server system because doing so, although within my authority, would have 
raised a small (but real) concern about the physical security.

ICANN's board has greatly improved since my day, but it remains 
excessively impassive.  I ascribe that to a couple of reasons.

First is the nominating committee method.  I conceive of it as much like 
one of those barrels into which one pours rough stones and polishing 
abrasives. After a run through the system - whether it be the nominating 
committee or a rock polishing barrel - the results are smooth and 
without any sharp points, pleasing to view and inoffensive to anything 
they may touch.  In other words, ICANN's nominating committee system 
unlikely to produce nominees (actually selections) that have many 
qualities that tend to go hand-in-hand with a desire to deeply dig into 
the corporation and see if anything is awry.

Second is the tendency of board members to understand their roles and 
responsibilities.  That is not helped when too many people on boards 
believe that corporate counsel or corporate legal works in the board's 
interest (much less in their own interest as an individual board 
member.)  Corporate counsel represents the entity of the corporation, 
not any particular piece of the corporation.

And corporate counsels, like me in my own companies, tend to take very 
conservative, protective positions.

I don't like it when my corporate management overrules my legal 
opinions, but that's life and it is their power and duty to measure 
legal advice against other matters.  It is 100% appropriate for a board, 
after reasoned and informed contemplation, to tell corporate counsel to 
take its opinion and shove it into a place where the sun rarely shines.

A CEO (or in ICANN's case, the job is formally called "President") is 
merely a hireling of the board.  ICANN has a long history of the board 
letting itself be stampeded and overcome by the person it hires.  That's 
not right; a board always needs to be prepared to take actions to remove 
a President/CEO.  That authority may be exercised even if there is a 
long term employment contract - a board can always dis-empower the 
person but may have to pay him/her the contracted amount.

By-the-way, I do not agree with ICANN's placement of the President on 
the board of directors.  We disagreed with that even in the initial 
Boston Working Group (BWG) proposals when ICANN was being formed - 


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