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Board Finance Committee (BFC) Minutes 27 October 2011

22 and 27 October 2011

BFC Attendees: Sébastien Bachollet, Cherine Chalaby (Chair), Rajasekhar Ramaraj, and George Sadowsky.

Other Board Attendees: the following Board members were present in the room for all or part of the meeting – Steve Crocker, Chris Disspain, Erika Mann, Ram Mohan, Gonzalo Navarro, Mike Silber, and Bruce Tonkin.

Staff Members Present: Akram Atallah – Chief Operating Officer, Xavier Calvez – Chief Financial Officer, John Jeffrey – General Counsel and Secretary, Kurt Pritz – Senior Vice President, Stakeholder Relations, Daniel Halloran, Juan Ojeda and Diane Schroeder.

22 October 2011

The following is a summary of discussions, actions taken and actions identified:

  1. Minutes. The BFC minutes were already approved online.

  2. BFC Schedule. Discussed BFC schedule, including posting of budget framework on or around 17 January 2012.

  3. Contingency Fund Update. Budgeted contingency amount of US $2.5 million. No expenditures approved to date. Potential unbudgeted expenses include CEO succession costs (0.3 – 0.5m?), Board compensation (half-year would be 0.5m), New gTLD communication plan (0.9m); total = 1.7m to 1.9m.

  4. New gTLD Communications Budget. Discussed request for additional US$0.9m, and options for Communications Budget, including approving the full request or a partial amount. Discussed merits of approving full amount or something less. Discussed overall expenditures to date and anticipated transfer to reserve fund. Resolution to recommend that the Board approve additional budget of $0.9 mil for New gTLD communication plan – approved 3-0 (George Sadowsky abstained).

  5. Investment Policy. Approved resolution formally approving the revised Investment Policy:

    Whereas, ICANN updated its Investment Policy in July 2009;

    Whereas, the Board Finance Committee requested that an outside expert review the Investment Policy to ensure it is appropriate for ICANN;

    Whereas, the outside expert completed a review of the ICANN Investment Policy and concluded that overall the Investment Policy is comprehensive and well-written;

    Whereas, the outside expert recommends a few modifications of the Investment Policy be made to ensure that it is as strong as possible;

    Resolved (2011.10.28.01), the Board endorses the ICANN Investment Policy and adopts the recommended modifications to the Investment Policy.

  6. Disbursement Policy Update. Discussed forthcoming revisions to Disbursement Policy to reflect updated officer structure and changes to disbursement and approvals language.

  7. Reserve Fund Update. Current cash on hand: 32.9m. Need 23m working capital for next 3 months. Closed fiscal year last month, and usual process would ordinarily call for transferring 9m to reserve fund. Discussed process for reserve fund contributions, and timing in relation to spending on new gTLD program. Agreed to review the amount to be contributed and discuss at a future meeting.

  8. FY13 Budget Process Update. Reviewed overall timeframe and the proposed content of the framework. Discussed process for consultation with community.

    Due to external time constraints, the BFC meeting adjourned and a second meeting was called to order on 27 October 2011. The BFC members in attendance for the continued meeting were: Sébastien Bachollet, R. Ramaraj (Acting BFC Chair), and George Sadowsky.  Other Board members in attendance were: Steve Crocker, Chris Disspain and Mike Silber.  Invited attendee Judith Vazquez was also present, as well as staff members Akram Atallah, Xavier Calvez, Samantha Eisner, Diane Schroeder and Amy Stathos.  Cherine Chalaby sent apologies.

  9. FY12 Budget Process Update – Continued.  Received an update on the process for reviewing the FY12 Budget, including a commitment to be more precise on how community comments are received and responded to within the Budget process.  Discussed how to address community prioritization of budget requests and the need to better document the process.

    • Action:

      • Staff to provide update to BFC on how community comments will be reflected in the budget as presented, and recommendation modifications to the process that currently exists.

  10. Update on Banking Relationships.  Received an update on the change of banking relationships authorized in September 2011.

  11. Update on Reserve Fund.  Received an update on the performance of the ICANN Reserve Fund.

    • Action:

      • Provide update to the BFC regarding the transfer of the Reserve Fund as approved by the Board in September 2011.

  12. Update on Insurance.  Received an update on ICANN’s insurance policies and coverage.

  13. Surplus New gTLD Funds.  Discussed the approach to addressing the question of application of any surplus funds derived from string contention under the new gTLD program, including issues surrounding the creation of a foundation or other structure for distribution of funds and how to continue discussions on this topic.

    • Action:

      • Staff to provide BFC with information on work regarding both the mechanisms by which the funds could be held and distributed as well as the purposes to which the funds could be devoted.