Re: [ga] ICANN Board unanimously approves .biz/.info/.org registry agreements by 13-0

[Karl Auerbach <karl@xxxxxxxxxxxx>]

Veni Markovski wrote:
> I wouldn't go as much as personal attorney. Common sense sometimes is 
> better.

Uh, as a California attorney myself, I would suggest that that is an 
extremely unwise strategy.  The rules of fiduciary duties fill thick 
volumes.  And those duties are potentially more complex for directors of 
non-profit/public benefit corporations (such as ICANN) than they are for 
directors of private corporations.

And I bet that most Directors do not even know of the existence of 
"Intermediate Sanctions" much less know what they are.  (They are a 
draconian hammer that the US tax authority holds over directors and 
officers of bodies, such as ICANN, that operate with Federal tax 
exemptions - see http://en.wikipedia.org/wiki/Intermediate_sanctions)

Do you know the obligations that are placed on a director with regard to 
the making of a decision, including the decision that is made to 
abstain?  Do you know the kind of record keeping that a Director must 
undertake to demonstrate that the director is making proper independent 
and informed business judgments?

Many attorney's give this advice to people who consider taking a seat on 
a non-profit board of directors: Don't do it unless you are willing to 
put everything you own, your entire worth, on the line.

Yes, there are rules that provide a degree of protection to "volunteer" 
directors.  But those rules are inconsistent, full of complex 
pre-conditions, and perhaps subject to pre-emption.

And there are forms of liability, such as the way that the IRS (the US 
Federal tax authority) structures penalties as a form of tax that may 
not be coverable by corporate liability insurance.

This is not a maze that can be navigated by "common sense", particularly 
if that common sense is has been constructed on experience in places 
where the legal system is different than that of the US and California.

ICANN's legal counsel is *not* counsel for individual directors; the 
obligation of ICANN's counsel is to protect ICANN, not to protect 
individual directors.

A director, or a person considering becoming a director, ought to expend 
some money to obtain advice from legal counsel who is looking out for 
the interests of the director.

		--karl--