[council] Regarding Conflicts of Interest for ICANN Board members

["Bruce Tonkin" <Bruce.Tonkin@xxxxxxxxxxxxxxxxxx>]

Hello All,

I have asked Michael Palage to provide a current conflict of interest
statement to provide information to assist GNSO Council members in
making their voting decision.

This request would apply to any candidates in the current election, and
also to candidates in future elections.

>From the ICANN Bylaws, with respect to Conflict of Interest:

"The Board, through a committee designated for that purpose, shall
require a statement from each Director not less frequently than once a
year setting forth all business and other affiliations which relate in
any way to the business and other affiliations of ICANN. Each Director
shall be responsible for disclosing to ICANN any matter that could
reasonably be considered to make such Director an "interested director"
within the meaning of Section 5233 of the California Nonprofit Public
Benefit Corporation Law ("CNPBCL"). In addition, each Director shall
disclose to ICANN any relationship or other factor that could reasonably
be considered to cause the Director to be considered to be an
"interested person" within the meaning of Section 5227 of the CNPBCL.
The Board shall adopt policies specifically addressing Director,
Officer, and Supporting Organization conflicts of interest. No Director
shall vote on any matter in which he or she has a material and direct
financial interest that would be affected by the outcome of the vote."

ICANN's conflict of interest policy (approved by the Board in March,
1999) is:
http://www.icann.org/committees/coi/coi-policy-04mar99.htm 

Conflicts of Interest Policy
[Adopted March 4, 1999, pursuant to ICANN Bylaws, 
Article V, Section 7, and Article VI, Section 3(b)] 

1. Purpose

The purpose of the Conflicts of Interest policy is to ensure that the
deliberations and decisions of the Corporation are made in the interests
of the global Internet community as a whole, and to protect the
interests of the Corporation when it is contemplating entering into a
transaction, contract, or arrangement that might benefit the private
interest of an Interested Director, Officer or Person (as defined
below). An Interested Director, Officer or Person may not use his or her
position with respect to the Corporation, or confidential corporate
information obtained by him or her relating to the Corporation, in order
to achieve a financial benefit for himself or herself or for a third
person, including another nonprofit or charitable organization. This
policy is intended to supplement but not replace any applicable laws
governing conflicts of interest in nonprofit and charitable
corporations.

2. Definitions

2.1 Compensation. "Compensation" includes direct and indirect
remuneration as well as gifts or favors that are substantial in nature. 

2.2 Family. The "family" of any individual shall include only his or her
spouse; his or her siblings and their spouses; his or her ancestors; and
his or her descendants and their spouses. 

2.3 Financial Interest. A person has a "financial interest" if the
person has, directly or indirectly, through business, investment or
family:

(a) An existing or potential ownership or investment interest in any
entity with which the Corporation has a transaction, contract, or other
arrangement, or 

(b) A compensation arrangement with the Corporation or with any entity
or individual with which the Corporation has a transaction, contract, or
other arrangement, or

(c) An existing or potential ownership or investment interest in, or
compensation arrangement with, any entity or individual with which the
Corporation is negotiating a transaction, contract, or other
arrangement, or

(d) An existing or potential ownership or investment interest in, or
compensation arrangement with, any entity whose business or operation
has been or will be directly affected by a decision or action of the
Corporation. 

2.4 Interested Director. "Interested Director" shall mean any Director
of the Corporation who has a material financial interest, as defined
above, or who serves as a Director or Officer of any entity with which
the Corporation has a transaction, contract, or other arrangement.

2.5 Interested Officer. "Interested Officer" shall mean any Officer who
has a material financial interest, as defined above, or who serves as a
Director or Officer of any entity with which the Corporation has a
transaction, contract, or other arrangement. For purposes of this
policy, the President of the Corporation shall be treated as an Officer.

2.6 Interested Person. "Interested Person" shall mean either:

(a) Any person currently being compensated by the Corporation for
services rendered to it within the previous 12 months, whether as a
full- or part-time employee, independent contractor, or otherwise, or 

(b) Any person whose family member, as defined in Section 2.2, is
currently being compensated by the Corporation for services rendered to
it within the previous 12 months, whether as a full- or part-time
employee, independent contractor, or otherwise. 

3. Committee on Conflicts of Interest

3.1 To administer and monitor compliance with this Policy, the Board
shall create a Committee of the Board on Conflicts of Interest
("Conflicts Committee"), to consist of at least two Directors named by
the Board. 

3.2 The Conflicts Committee shall require a statement from each Director
and Officer not less frequently than once a year setting forth all
business and other affiliations which relate in any way to the business
and other activities of the Corporation. 

4. Duty to Abstain

4.1 No Director shall vote on any matter in which he or she has a
material and direct financial interest that will be affected by the
outcome of the vote. 

4.2 In the event of such an abstention, the abstaining Director shall
state the reason for the abstention, which shall be noted in the minutes
of the Board of Directors. 

5. Disclosure by Directors and Officers

5.1 When requested by the Conflicts Committee (not less frequently than
once a year), each Director and Officer shall promptly submit a
statement to the Committee setting forth all business and other
affiliations which relate in any way to the business and other
affiliations of the Corporation. 

5.2 With respect to any particular matter then pending before the
Corporation, each Director and Officer shall disclose to the Conflicts
Committee any matter that could reasonably be considered to make the
Director or Officer an "Interested Director" or "Interested Officer," as
defined above.

5.3 With respect to any particular matter then pending before the
Corporation, each Director and Officer shall disclose to the Conflicts
Committee any relationship or other factor that could reasonably be
considered to cause the Director or Officer to be considered to be an
"Interested Person," as defined above.

5.4 For purposes of this section, Officers of the Corporation need not
disclose compensation and other benefits paid to the Officer by the
Corporation pursuant to Board resolution. 

6. Disclosure by Supporting Organization

Members of or participants in Supporting Organization councils must
disclose conflicts of interest or other financial interests in matters
within the scope of the Supporting Organization in the manner required
by the Bylaws of the Supporting Organization.

7. Procedures in Connection with Proposed Transactions and Arrangements

7.1 Scope. This section applies to any proposed transaction, contract,
or arrangement in which a Director, Officer, or Interested Person has a
material financial interest. 

7.2 Duty to Disclose. In connection with any actual or possible
conflicts of interest, an Interested Director or Interested Officer must
disclose the existence and nature of his of her material financial
interest to the Conflicts Committee prior to the consideration of the
proposed transaction, contract, or arrangement by the Board or any
Committee of the Board.

7.3 Determining Whether a Conflict of Interest Exists. After disclosure
of the financial interest, the disinterested members of the Conflicts
Committee shall determine whether a conflict of interest exists. Neither
the Board nor any Committee of the Board shall vote upon any proposed
transaction, contract, or arrangement in connection with which an actual
or possible conflict of interest has been disclosed by an Interested
Director until such time as the Conflicts Committee has addressed the
actual or possible conflict of interest. For matters pending before the
full Board of Directors, a referral to the Conflicts Committee will not
be required where the Interested Director fully discloses to the Board
his or her financial interest and abstains from participation in the
Board's consideration of the proposed transaction, contract, or
arrangement.

7.4 Procedures for Addressing a Conflict of Interest

7.4.1 Where a matter has been referred to the Conflicts Committee and
the Conflicts Committee has concluded that a conflict of interest
exists, the chairman of the Board or Committee of the Board shall, if
appropriate, appoint a disinterested person or committee to investigate
alternatives to the proposed transaction, contract, or arrangement. 

7.4.2 After exercising due diligence, the Board or Committee shall
determine whether the Corporation can obtain a more advantageous
transaction, contract, or arrangement with reasonable efforts from a
person or entity that would not give rise to a conflict of interest. 

7.4.3 If a more advantageous transaction, contract, or other arrangement
is not reasonably attainable under circumstances that would not give
rise to a conflict of interest, the Board or Committee shall determine
by a majority vote of the disinterested Directors whether the
transaction, contract, or arrangement is in the Corporation's best
interest and for its own benefit and whether it is fair and reasonable
to the Corporation, and shall make its decision as to whether to enter
into the transaction, contract, or arrangement in conformity with such
determination. 

8. Violations of the Conflicts of Interest Policy

8.1 If the Conflicts Committee has reasonable cause to believe that a
Director or Officer has failed to disclose an actual or possible
conflict of interest, it shall inform the Director or Officer of the
basis for such belief and afford the Director or Officer an opportunity
to explain the alleged failure to disclose. 

8.2 If, after hearing the response of the Director or Officer and making
such further investigation as may be warranted in the circumstances, the
Conflicts Committee determines that the member has in fact failed to
disclose an actual or possible conflict of interest, it shall recommend
to the Board of Directors appropriate disciplinary and corrective
action.

8.3 The violation of this conflicts of interest policy is a serious
matter and may constitute "cause" for removal or termination of a
Director or Officer, or the termination of any contractual relationship
the Corporation may have with an Interested Person or other party. 

9. Records of Proceedings

9.1 The minutes of the Conflicts Committee shall contain: 

(a) The names of Directors and Officers found to have a material
financial interest in connection with an actual or possible conflict of
interest; the nature of the financial interest; any action taken to
determine whether a conflict of interest was present; and the decision
of the Conflicts Committee as to whether a conflict of interest in fact
existed. 

(b) The names of the persons who were present for discussions and votes
relating to the actual or potential conflict of interest; the content of
the discussion; and a record of any votes taken in connection therewith.


9.2 In connection with a conflict of interest, the minutes of the Board
or other Committee of the Board shall contain the names of the persons
who were present for discussions and votes relating to the transaction
or arrangement; the content of the discussion, including any
alternatives to the proposed transaction or arrangement; and a record of
any votes taken in connection therewith. 

10. Compensation Committees

A member of any Committee of the Board the jurisdiction of which
includes compensation matters and who receives compensation from the
Corporation for services is precluded from voting on matters pertaining
to that member's compensation.

11. Annual Statements

Each Director and Officer shall annually sign a statement which affirms
that such person:

(a) Has received a copy of the conflicts of interest policy; 

(b) Has read and understands the policy;

(c) Has agreed to comply with the policy; and

(d) Understands that the Corporation is a charitable organization and
that in order to maintain its federal tax exemption it must engage
primarily in activities which accomplish one or more of its tax-exempt
purposes. 

12. Periodic Reviews

The Conflicts Committee shall periodically consider whether and how this
Conflicts of Interest Policy should be revised or amended to better meet
its objectives. In connection with any periodic review conducted by the
Corporation to ensure that it operates in a manner consistent with its
charitable purposes, the Conflicts Committee shall report on the matters
referred to it and their resolution.


Regards,
Bruce Tonkin