[Community-Discuss] FW: [members-discuss] Accountability assessment

[Mike Silber]

My ZAR0,02 below (at the current exchange rate - you decide what it is worth)

> On 29 Jun 2016, at 00:39, Badru Ntege <badru.ntege at nftconsult.com> wrote:
>> 
>>  
>>> >>>1 ......  but there is a conflict between 7.2(i) and 13.7(i) on whether or not Associate Members may vote in elections forDirectors. This conflict must be resolved one way or another.
>>> We need to decide whether or not Associate Members should vote, and modify the Bylaws to give effect to that decision
> 
> Following discussion in a separate thread if resource member includes legacy holders I think they should not vote.  They are either fully in or out.  They hold on to resources out of Afrinic and do not want to share or return and yet they want to take part in the governance by paying a measly fee.

I see no reason for associate members, so the question of voting is moot. If they remain - then I would leave them as non-voting.

As for legacy holders - I agree they should not vote. However the comments come pretty close to a suggestion of compelling them - which would amount to expropriation. They obtained resources under a specific process which has passed. I see no reason for people to be vindictive.

If we want legacy members as full members - them let us create incentives and not threaten them.
 
>  
>> 
>> Agree with term limits – would not however support a single term – there has to be some continuity and it takes any director time to get up to speed with everything in the organization as well.  Two terms with a two term break seems far more reasonable to me, and I would support such
>> 
> 
> Fully diasgree  if it takes time I think NOMCOM then needs to be more thorough in the selection process.

I agree about Noncom actively searching for candidates and not just a simple vetting process (do they meet the criteria). Some budget may be needed for outreach (and no - I am not suggesting we pay the Noncom to travel the continent, but rather some targeted advertising and possibly engaging a search firm).

>  The region has a wealth of highly intelligent people capable of grasping the board expectations in a very short time.

I agree. The problem is how many of them have an understanding of numbering resources and how many of them are willing to put in the time and effort required without compensation?

Having served on a number of non-profit boards, intelligence has little to nothing to do with grasping fiduciary obligations of a director. Actually common-sense and experience are (IMO at least) far more important. The pool of experienced directors with an understanding of technology, law, finance, governance and the obligations of being a director are far smaller than the pool of intelligent people.

Again my opinion - we need to assist intelligent people to get the skills they need to be effective directors. Some of it is training and some of it is experience. Right now - there are very places in which to gain that experience. In AfriNIC is is pretty much as PDWG co-chair. Suggestions most welcome.


>   The above suggests we are presented with incapable candidates to choose from which I fully disagree with. 

There is no need to be dramatic here. There is no suggestion of the capability of candidates, but rather the benefits that continuity and experience bring. Also the relatively shallow pool of candidates from which we are selecting. So we need a careful balancing between new blood and experience, continuity and incumbency. 

> 
> The proposal of One term and at least an election before another nomination is perfect.

I think a 2 term limit with a 3 year break is in fact preferable. I would not want to see candidates bouncing between geographic and non-geographic without a reasonable break. Still - I can accept the proposal.
>>> 
>>> >>> 5- Independence of Directors: Consider adding a limit to the number of Directors who may work for the same organisation.
>>> 
> 
> In a region of over 1 billion people and 53 countries the above submission would seem very weak.  Lets invest in finding those people.  
> 
> To put this in context we are looking for  0.000000009 %  from a population point of view and 17% from a countries point of view.  Surely we can and should increase our outreach efforts.
> 

Again, you are being disingenuous. Of that 1 billion people, how many of them have a clue how the numbering system works and have some legal, commercial, financial or governance experience? I could nominate my mother to the board and while she is a wonderful, kind, honest and fair person - she would be totally unable to fulfil her fiduciary obligations.

By all means, let us expand our outreach - but let us also not kid ourselves that we are selecting directors from a pool of a billion people.

I think 2 per organisation and 2 per country (excluding the CEO) is a reasonable protection from capture. I could be convinced that it should be only 1 per organisation - but I would like a more compelling reason. Right now I have not seen any.
>>> 
>>> >>> 9- Replacement of Directors: The bylaws sections 13.1, 13.8, 13.10, and 13.14 give  different methods of replacing Directors for  different reasons. Consider  harmonising this.
>> 
>> > Harmonisation supported but the preferred option should be replacement through election at the next AGMM. 
>>  
>> Supported – though I would add SGM as a possibility for replacement.  In the event of losing multiple directors at a single time through some unforeseen event it may become necessary to call an SGM for this purpose and the bylaws need to allow for it.  The risk of tying this to an AGMM is that the board could be down to a skeleton for close to a year if we don’t allow for SGM’s.
> 
> 
> Secretariat runs the organisation.  Board is just oversight.  No need for SGMM.  I think we are blowing board value out of proportion.

I see no harm in inserting the ability to use a SGM. If half the board decide to resign after the elections because someone they cannot work with is elected, I don’t think the organisation can limp for a year and a mechanism should be available. Hopefully it is never used.
>  
>>  
>>> 
>>> >>> 10- Board approval of nominations: The Board can approve or disapprove  nominations for Board elections in terms of the Bylaws section 12.14(i). Consider requiring a supermajority of two thirds of the Board to disapprove any nomination
>> 
>> > We should remove this approval and strengthen NOMCOM.  NOMCOM composition and operation should be reviewed and improved.   We can have the legal advisor and past NOMCOM chair as non-voting
>> > members and make the appointment of the other members by the board more transparent, fair and unbiased.   
>>  
>> I agree with the original proposal that states a super majority.  I believe that the board should have the right to reject candidates if certain situations. 
> 
> 
> Problem with the above is that “certain situations” is so subjective.  Could be used to manipulate selection pool.  Or community could read negative intentions out of the rejection and thus bring disrepute to the board.  Super majority is open to abuse.

Agreed. 

While very different, let me explain a little about the ICANN Nominating Committee (which selects candidates, rather than just preparing the slate - though preparing the slate is the 6th phase in their process). The ICANN nomcom:

reviews the positions they need to fill (board, SO and ALAC councils)
they interview the respective organisation to understand the skills set and qualities they need (for example: the chairs of the finance committee and the audit committee are both leaving, we have a shortage of financial skills and need people with good financial skills, or our only African resident director is leaving and the SO and AC selection is unlikely to give us an African resident: please focus on that region)
the nomcom embarks on outreach (including hiring a recruitment firm, advertising in some publications, engagement at meetings, word of mouth etc). They may give specific focus to a skill set or region based on the requests they receive.
the nomcom receive and review the applications (largely done by the recruitment firm) to check the candidate is who s/he says s/he, works where they say they do etc.
they shortlist and call for references
they review the candidates, the references and the requests / requirements of the board / SO councils and prepare a slate. The requests are ONE of the considerations they use, but it is not preemptory and the nomcom is independent and has the discretion to select who THEY believe has the skills set and experience the organisation needs.
they select from the slate.

I would like to see the AfriNIC Nominating Committee go through a similar process. That may involve strengthening the Nominating Committee and I have no problem with a board member on the Nominating Committee, however I disagree completely with the notion of a board veto.

> 
>>  
>> 
>>> >>>11-  Modification to the Bylaws or Constitution: The Bylaws say how the AFRINIC Members may change the Bylaws, but the Companies Act say that the  Registered Members can change it. Consider requiring that the  Bylaws/Constitution may be changed only after a Special Resolution by all AFRINIC Members in terms of Bylaws 7.6(vi),so that the Registered Members (the same nine people as the Directors) cannot act without broader approval.
>> 
>> > Registered members only MUST never amend  the bylaws.  Amendment of Bylaws beyond regulatory compliance must require general membership notice and consultation.  
>>  
>> >The proposed amendment should be published not less than 60 days and not more than 90 days before with provisions for members to comment online and in any meeting held during the consultation
>> 
>> Am not sure we can legally override the companies act in this regard and would like to see legal opinion on this.  In principle I agree that the board should never change the bylaws without a super majority special resolution of the community at either an SGM or AGMM, I am just not sure we can have the bylaws match the companies act in this regard. 
>> 
> 
> Companies act  should never come in the way of community.  We have 53 possible jurisdictions to consider if this becomes a major issue.  By the way we can change our registered office without moving out of Mauritius.

I see no need to be melodramatic. 

The question here is one of discipline and process. 

Either we need to change the membership process so all members become Registered Members, or we need an insertion as suggested indicating that in exercising their powers the Registered Members will only do so with the consent of the members. I see no legal obstacles to a 2 stage process, as long as the Registered Members do not have their discretion limited as fiduciaries and as long as the membership has the ability to remove the board if they go against the will of the members.

So a vote of no confidence at an AGM or a SGM can topple the board (hence the need to be able to elect at a SGM).

> 
>>> 
>>> >>>12- Policies introduced by the Board: In terms of the Bylaws section 11.4, the Board may adopt policy changes that did not go through the normal PDP. Consider giving the community the right to reject such policy changes introduced by the Board.
>> 
>> 
> 
> 
> In the above case board members would also be taking full responsibilty with legal repercussions should the board policy bring negative outcomes to the organization.  Lets remember the boards oversight role is to ensure that the bottom up process is maintained.  The ultimate decision for policy belongs to the community.  Board in Afrinic is not like board in any other company.  The Afrinic board role is purely oversight.  We can and should not allow board to give themselves more powers.

I think this is partly correct. The AfriNIC board performs two roles: fiduciary just like any other corporate board and Policy oversight (you will notice the uppercase “P” in policy). The board is decisional in corporate matters and oversight in Policy matters. However Policy can have an impact on the corporation.

There are a number of organisations in our sphere that operate in a similar manner. Some of them manage the roles by actually splitting them out (into a board and a policy committee). I don’t think we need to split the two (just yet), however we do need better definition of the issues and hopefully our governance committee can help document these issues. There are three “buckets” into which board decisions can fit: board decisions (the corporation), community developed Policy (the Policy) which are ratified by the board and board or community decisions which have an impact on the other (the contention).

To give some examples:

board decision: moving offices as the current offices are too small. Management identifies new office space, the board reviews the financial and legal impact and approves
community decision: Policy as we understand it
cross-impact: Expected standards of behaviour. Fees. The Board may be responsible for ensuring the organisation has enough money to operate, but raising fees has an impact on the community. Or the community proposes a Policy which will dramatically reduce revenue or increase costs.

I think the issue is that there is no process around raising or resolving disagreements.  I think that should be the subject of another thread. However we saw disagreement when the board published expected standards of behaviour without discussion. However those are not Policy, they fall into that contention bucket without a clear “owner”.

I also think we need more community (note - not member, but community) engagement around these issues. Right now the budget does not go out for community discussion or input. I think that is a very good place to start getting engagement. If our revenues are too low, the community needs to understand where the company is spending its money and if revenue increase or cost containment is needed. If every place where costs can be cut meet community opposition (we cannot reduce the training budget, or the meetings budget) then revenues must go up. We also do not have a process of costing proposals (not just Policy proposals but all proposals). The reason commit and not just members is that the community participates in many of our activities - if we cut training, it is not just members who will be affected.

Mike


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