[council] Meeting with Board - ethics policy question

["Rosette, Kristina" <krosette@xxxxxxx>]

All,

All comments, suggestions, and revisions welcome!

K

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QUESTION FROM BOARD:  As we work to develop ethics guidelines, what are your 
top 3 concerns and proposals to address them (within the confines of the 
multistakeholder, voluntary participation model)?

PROPOSED RESPONSE:

1.  Two threshold points.  (1)  As an initial matter, the relevance of "within 
the confines of the multistakeholder, voluntary participation model" is 
unclear.  (2) In addition, ICANN has an opportunity to adopt a "gold standard" 
ethics policy.  Whether we like it or not, the fact of the matter is that the 
absence of one provides a basis for challenging BoD decisions, the 
multi-stakeholder model and/or ICANN's viability to those who seek to do so.

2.  The general view among GNSO Councilors is that the need for a stronger 
conflict of interest policy and an anti-revolving door policy is far greater at 
the level of ICANN Officers and Directors than it is at the level of GNSO 
volunteers.

3.  Concern 1 is that the current conflicts of interest policy is too narrow.

[Background:  Not to be read at meeting, but just fyi:

Article VI, Section 6 of the ICANN bylaws states that:

The Board, through the Board Governance Committee, shall require a statement 
from each Director not less frequently than once a year setting forth all 
business and other affiliations that 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.

Section 5233 is limited to self-dealing transactions, which are defined as "a 
transaction to which the corporation is a party and in which one or more of its 
directors has a material financial interest" and does not qualify for certain 
statutorily defined exemptions.  
http://codes.lp.findlaw.com/cacode/CORP/1/1/d2/2/2/3/s5233  Section 5227 
defines interested persons as "either: (1)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, excluding any reasonable compensation paid to a director as 
director; or (2)Any brother, sister, ancestor, descendant, spouse, 
brother-in-law, sister-in-law, son-in-law, daughter-in-law, mother-in-law, or 
father-in-law of any such person."]

The current conflicts of interest policy does not impose an obligation on a 
Director to avoid conflicts that may not create a material financial interest 
but create an appearance of impropriety, would not be triggered by a close 
personal relationship that would not be encompassed by the statutorily defined 
relationships, and allows a Director to fully participate in discussions of 
votes on topics on which she/he would be otherwise prohibited from voting.  A 
revised CoI policy should resolve these deficiencies.

4.  Concern 2 is that there is no anti-revolving door policy.  The absence of 
one can cast doubt on the integrity of decisions by the BoD and the resulting 
policy and implementation decisions.  Similarly, the absence of an 
anti-revolving door policy allows a former Officer or Director to "cash in" on 
their experience as an Officer or Director in a way that creates an appearance 
of impropriety.   A new anti-revolving door policy should address these 
deficiencies.

5.  Concern 3 is a broader interest in considering possibly more robust ethics 
policies across the board -- for example, including a meaningful conflict of 
interest policy for employees, instituting penalties for a volunteer's failure 
to disclose material information in SOIs, and a GNSO equivalent of Article VI, 
Section 4 of the ICANN bylaws.  We would welcome your feedback on these ideas 
as well as any others that you think should be included.