ICANN Board of Directors - Fiduciary Responsibilities, Conflicts, and Confidentiality John Jeffrey General Counsel & Secretary, ICANN 9 December 2010.
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ICANN Board of Directors - Fiduciary Responsibilities,
Conflicts, and Confidentiality
John JeffreyGeneral Counsel & Secretary, ICANN
9 December 2010
ICANN’s Corporate Structure
• What is a Director’s responsibility?
• Directors are responsible for the direction of this specific entity created under a legal framework.
ICANN’s Corporate Structure
• Public Benefit - Non-Profit – Corporation - which is very similar in nature to the concept of a “Public Trust”
• Availing itself of state and federal laws for entities in California, USA
4
Board Fiduciary DutiesA Director shall perform his/her
duties :
a) in good faith,
b) in the best interests of the organization and
c) with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.
5
Five Legal StandardsDirector’s legal standard is
generally understood to embrace four duties:
(a) care,(b) inquiry, (c) loyalty, and, (d) prudent investment.
Also, Directors have an affirmative personal obligation to avoid conflicts of interest.
6
Duty of Care
• the seriousness, which each Director brings to his or her responsibilities such as gaining and maintaining familiarity with:
a) the business objectives of the organization,
b) important business considerations, and
c) relevant industry information.
7
Duty of Inquiry
• Take steps necessary:
a) to be sufficiently informed to make decisions on behalf of the organization, and
b) to participate in the Board of Directors’ activities.
8
Duty of Loyalty
• generally involving the protection of the organization’s interests in the following areas:
– business, properties, assets, employees and legal rights
• avoiding of conflicts of interest or self-dealing, and
Duty of Loyalty (continued)
• serving the interests of the organization
• not the interests of any other person or group
• not the interests of a constituency of the organization (SO or AC) which caused the Director to be selected
10
Duty of Prudent Investment
• When acting in the management of the organization’s investments:
• to avoid speculation, and
• to comply with any applicable standards in the organization’s Articles, Bylaws.
11
Conflicts of Interest
• The ICANN Bylaws require a conflicts of interest policy applicable to the Board of Directors.
• The basic elements of that policy have been elaborated in the Conflicts of Interest Policy.
The Conflicts Policy is on the ICANN website at http://www.icann.org/committees/coi/coi-policy-04mar99.htm
Confidentiality• Directors receive confidential
information including (but not limited to):
• personnel information, • attorney-client and privileged
information • and business information from
contracting parties.• Where possible, such information will
be marked “confidential” – but not always.
Confidentiality (continued)
• Directors apply judgment to any materials or information received in Board role.
• Directors have a affirmative legal and ethical obligation to maintain confidentiality for this information.
Questions
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