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.

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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.

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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.

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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.

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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

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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.

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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