Board Activities and Meetings
Minutes | Meeting of the ICANN Board 17 September 2011
A Special Meeting of the ICANN Board of Directors was held on 17 September 2011 in Santa Monica, California.
Chairman Steve Crocker promptly called the meeting to order.
In addition to the Chair the following Directors participated in all or part of the meeting: Sébastien Bachollet, Bertrand de La Chapelle, Chris Disspain, Bill Graham, Erika Mann, Gonzalo Navarro, Ray Plzak, R. Ramaraj, George Sadowsky, Mike Silber, Bruce Tonkin (Vice Chair), Katim Touray and Kuo-Wei Wu.
The following Board Liaisons participated in all or part of the meeting: Heather Dryden, GAC Liaison, Ram Mohan, SSAC Liaison; Thomas Narten, IETF Liaison; and Reinhard Scholl, TLG Liaison.
Cherine Chalaby, Rod Beckstrom(President and CEO), and Suzanne Woolf (RSSAC Liaison) sent apologies.
- Consent to Proceed with Meeting
- Approval of Investment Manager Selection
- Approval of International Banking Relationship
- Approval of ICANN Marina Del Rey Real Estate
- Approval of ICANN Brussels Real Estate
- Appointment of Chief Financial Officer
- CEO Succession Planning
- Board-GAC JWG Final Report Recommendations
- Process for Board Chair and Vice-Chair Selection, and Board Committee Slating (Discussion Only)
- Any Other Business
- Executive Session
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Consent to Proceed with Meeting
Prior to proceeding with the agenda, the Chair confirmed that there was no objection to proceeding with the meeting without formal notice. It was agreed that the absent Directors would also be asked regarding their consent to the meeting.
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Approval of Investment Manager Selection
The Board confirmed that no Directors had conflicts of interest relating to either Resolution 2011.09.17.01 or .02.
R. Ramaraj provided an update to the Board regarding the work in the Board Finance Committee (BFC) on the review of ICANN's investment manager, including an RFP and a recommendation from an investment advisor.
R. Ramaraj then moved and Ray Plzak seconded the following resolution:
All Board members in attendance approved of Resolution 2011.09.17.01. Rod Beckstrom and Cherine Chalaby were unavailable to vote on the resolution. The resolution carried.Whereas, the Board Finance Committee directed staff to issue an RFI seeking information from professional investment management firms on the investment policies and strategies available to ICANN to optimize the management of the ICANN Reserve Fund.
Whereas, five responses to ICANN's RFI from qualified investment firms were received.
Whereas, staff reviewed all responses to the RFI, interviewed all five investment firms, and determined that State Street Global Advisors was the preferred investment firm to manage ICANN's Reserve Fund.
Whereas, the ICANN Board Finance Committee received a presentation from State Street Global Advisors in Singapore.
Whereas, the ICANN Board Finance Committee met in Los Angeles on 15 September 2011 to discuss the selection of ICANN's new Reserve Fund manager and recommended that the Board authorize the CFO or the COO to engage State Street Global Advisors to serve as ICANN's Reserve Fund manager in compliance with ICANN's Investment Policy Statement.
Resolved (2011.09.17.01), the Board authorizes the CFO or the COO to engage State Street Global Advisors to serve as ICANN's Reserve Fund manager in compliance with ICANN's Investment Policy Statement, authorizes the CFO or the COO to transfer the funds from ICANN's current Reserve Fund manager to State Street Global Advisors, and authorizes the CFO or the COO to terminate ICANN's current Reserve Fund manager.
Rationale for Resolution 2011.09.17.01
In accordance with resolution 07.100, the Board authorized staff to engage an investment firm to manage ICANN's Reserve Fund. In furtherance of its due diligence, ICANN reviewed the performance and value added services provided by its current Reserve Fund manager. It was determined that, in order to increase accountability and transparency, ICANN should issue an RFI and solicit responses from various investment firms, including the incumbent firm. Five responses to ICANN's RFI from qualified investment firms were received. ICANN reviewed all responses to the RFI and interviewed all five investment firms.
Through the selection process, staff determined that State Street Global Advisors offered the best overall combination of services, reporting, expertise, and fee structure. The Board Finance Committee (BFC) received a presentation from State Street Global Advisors during their meeting in Singapore. On 15 September 2011, the BFC discussed the selection of ICANN's new Reserve Fund manager and recommended that the Board authorize the CFO or the COO to engage State Street Global Advisors to serve as ICANN's Reserve Fund manager in compliance with ICANN's Investment Policy Statement.
The suggested change is not expected to have any direct effect on the public. It is not expected to have any fiscal impact, or any impact on the security, stability and resiliency of the Domain Name System.
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Approval of International Banking Relationship
R. Ramaraj provided an update to the Board regarding the approval of a new banking relationship. The recommendation is based on improving operations related to banking across the world and ease of online transactions.
Ray Plzak then moved and Chris Disspain seconded the following resolution:
All Board members in attendance approved of Resolution 2011.09.17.02. Rod Beckstrom and Cherine Chalaby were unavailable to vote on the resolution. The resolution carried.Whereas, ICANN wishes to operate banking transactions out of its Southern California, Brussels, and Sydney office in their respective local currencies.
Whereas, staff explored various possibilities, including current banking partners.
Whereas, staff review determined that HSBC is the most suitable bank to manage ICANN's domestic and international banking needs.
Whereas, the ICANN Board Finance Committee met in Los Angeles on 15 September 2011 to discuss the selection of ICANN's new banking partner, and recommended that the Board approve HSBC as ICANN's new banking partner and authorize the CFO or the COO to open all necessary domestic and international accounts.
Resolved (2011.09.17.02), the Board approves HSBC as ICANN's new banking partner, authorizes the CFO or the COO to open all necessary domestic and international accounts, authorizes the CFO or the COO to transfer all ICANN operational funds to HSBC, and authorizes the CFO or the COO to terminate any or all of ICANN's existing operational banking relationship(s).
Rationale for Resolution 2011.09.17.02:
ICANN wishes to operate banking transactions out of its international offices as well as in Southern California, as efficiently as possible. Staff explored various possibilities, including current banking partners. Staff analysis included a review of each bank's relationship with its international offices, its overall global reach, and the ability to manage all accounts from one web portal. Through the selection process, it was determined that HSBC offered the best overall combination of services, international presence, and consolidated account management tools, at a competitive fee structure. HSBC also has the largest international footprint.
The suggested change may have a positive effect on the public as a result of the simplification of internal operations, thereby improving ICANN's ability to support the public interest. No fiscal impact is expected from this resolution. There will not be any impact on the security, stability and resilience of the Domain Name System.
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Approval of ICANN Marina Del Rey Real Estate
R. Ramaraj provided an update to the Board on the options available to ICANN upon the expiration of the lease for the Marina del Rey office in June 2012.
Kuo-Wei Wu inquired about the option of purchasing real estate.
Ramaraj noted that no purchase options were available in the area that were close to the needs of ICANN's space requirements, and that wouldn't require ICANN to do a joint deal or become a landlord.
Sébastien Bachollet raised the question of whether more efforts shouldn't have gone into looking into a purchase opportunity. He noted that he would really like to keep open the possibility to purchase office space near Marina del Rey.
The Chief Operating Officer noted that it is important to have the real estate decisions worked out sufficiently in advance of the end of lease, given the launch of New gTLD applications and the CEO transition.
R. Ramaraj then moved and Bruce Tonkin seconded the following resolution:
Whereas, ICANN's current lease in Marina del Rey expires 30 June 2012.
Whereas, ICANN's primary operations and staff are located in the greater Los Angeles area.
Whereas, current and future office space needs for primary operations will be at least 27,000 square feet.
Whereas, ICANN has an organizational benefit being located in and about a primary technology center.
Resolved (2011.09.17.03), the ICANN Board authorizes the CEO and COO to negotiate for and finalize a lease for office space in Southern California [REDACTED]
Thirteen Board members in attendance approved of Resolution 2011.09.17.03. Sébastien Bachollet abstained from voting on the resolution. Rod Beckstrom and Cherine Chalaby unavailable to vote on the resolution. The resolution carried.
All Board members in attendance approved of Resolution 2011.09.17.04. Rod Beckstrom and Cherine Chalaby were unavailable to vote on the resolution. The resolution carried.Sébastien Bachollet noted that his abstention is based upon his prior remarks that a purchase option was not presented.
Resolved (2011.09.17.04), the Board approves the redaction of the details of the Resolution 2011.09.17.03 and corresponding rationale pending completion of negotiations.
Rationale for Resolution 2011.09.17.03
ICANN's lease for office space in Marina del Rey is expiring 30 June 2012. In addition to the expiration of the lease, the amount of space ICANN has been leasing is insufficient to meet anticipated future needs, particularly with the launch of the New gTLD program.
Alternatives considered included purchasing a building, leasing additional space (if available) in the current location, and leasing space in an alternative location. [REDACTED]
This Board action should not have any impact on accountability and transparency or any effect on the public, except that ICANN staff members should have more and sufficient space within which to perform their duties in furtherance of the public interest. There will not be any significant variance to pre-planned expenditures. Annual expenses for any new lease will be included in future annual budgets and reported in future annual financial reports. This Board action will have no impact on security, stability or resiliency of the domain name system.
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Approval of ICANN Brussels Real Estate
R. Ramaraj provided an update on the current state of the Brussels office real estate situation, where ICANN occupies offices operated by Regus, and the identification of office space for ICANN to lease directly from the landlord.
The Chief Operating Officer provided some historical context on ICANN's 2010 research into purchasing a building in Brussels. However, no purchase decision was taken at that time because ICANN did not have a finalized globalization strategy.
The Board and staff discussed the specific space requirements and lease terms that should be considered for the Brussels office. The Board provided specific guidance to staff regarding items to be included in the negotiations. As that guidance modified the resolution as recommended to the Board, Ray Plzak moved and George Sadowsky seconded the modification, with all Board members in approval.
Ray Plzak then moved and Kuo-Wei Wu seconded the following resolution as amended:
Whereas, ICANN's currently leases space on a temporary basis from Regus at 6 Rond Schuman, Brussels;
Whereas, ICANN is committed to maintaining and expanding an office in Brussels;
Whereas, current and future office space needs for primary operations will be at least 450 square meters,
Whereas, ICANN has an organizational benefit being located in the central European district of Brussels,
Resolved (2011.09.17.05), the ICANN Board authorizes the CEO and COO to negotiate for and finalize a lease for office space [REDACTED].
All Board members in attendance approved of Resolution 2011.09.17.05. Rod Beckstrom and Cherine Chalaby Board Members were unavailable to vote on the resolution. The resolution carried.
Resolved (2011.09.17.06), the Board approves the redaction of the details of the Resolution 2011.09.17.05 and corresponding rationale pending completion of negotiations.
All Board members in attendance approved of Resolution 2011.09.17.06. Rod Beckstrom and Cherine Chalaby were unavailable to vote on the resolution. The resolution carried.
Rationale for Resolution 2011.09.17.05
ICANN leases space through a full service office suite (Regus) in Brussels. Lease terms can be month to month or for longer periods of time. The office suite environment means ICANN has private offices but shares many common amenities including conference rooms, mail/shipping/receiving center, copier, reception area and more. Rent includes many services (whether used or not) and certain services (such as conference room use) are on a “pay as used” basis. ICANN wishes to continue to build its global presence and the Brussels office is part of that plan. It is anticipated that additional staff will be hired to work out of the Brussels office. This will require additional space.
[REDACTED]
This Board action should not have any impact on accountability and transparency or any effect on the public, except that ICANN staff members should have more and sufficient space within which to perform their duties in furtherance of the public interest. There will not be any significant variance to pre-planned expenditures. Annual expenses for any new lease will be included in future annual budgets and reported in future annual financial reports. This Board action will have no impact on security, stability or resiliency of the domain name system.
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Appointment of Chief Financial Officer
Prior to considering this item, all members of the Board confirmed that they are free from a conflict in voting on the appointment of the CFO.
Bruce Tonkin moved and Sébastien Bachollet seconded the following resolution:
All Board members in attendance approved of Resolutions 2011.09.17.07-08. Rod Beckstrom and Cherine Chalaby were unavailable to vote on the resolutions. The resolutions carried.Whereas, the attraction and retention of high calibre staff is essential to ICANN's operations and ICANN desires to ensure competitive compensation for staff.
Whereas, Xavier J. Calvez has been identified through a vigorous global search and senior management agrees that he is the right candidate to fill the role of Chief Financial Officer.
Whereas, independent market data provided by outside compensation consultants indicates that the compensation, including at-risk compensation, for a Chief Financial Officer would fall between [REDACTED] at the 50th percentile and [REDACTED] at the 75th percentile.
Whereas, the Compensation Committee has recommended that the Board approve this compensation package for Xavier J. Calvez.
Resolved (2011.09.17.07), the Board hereby appoints Xavier J. Calvez as an Officer of the Company in the position of Chief Financial Officer effective 17 September 2011.
Resolved (2011.09.17.08), the Board authorizes a starting compensation package for Xavier J. Calvez to consist of: (i) a base salary of US $250,000 per year; (ii) an at-risk compensation opportunity of 30% of base salary per year to be paid in a manner consistent with other U.S. based staff and in accordance with the company's bonus program; and (iii) the standard benefit programs made available to all other regular full time U.S. based staff.
Rationale for Resolutions 2011.09.17.07 – 2011.09.17.08
ICANN has been without a full time Chief Financial Officer (CFO) for several months. In order to fill the CFO position, ICANN engaged a global search firm and conducted a global search. The search firm screened dozens of applicants, several of whom were interviewed by senior management, and two were interviewed by one or more Board members.
Mr. Calvez is an experienced finance professional with extensive international experience. Born in France, Mr. Calvez has had a progressive career with KPMG (France), Deloitte (France and USA), and most recently for the past nine years with Technicolor (France and the USA where he most recently served as Chief Financial Officer, Network Services Division and then Chief Financial Officer, Creative Services Division.
Mr. Calvez is fluent in French and English, has a degree in Finance & Accounting from Université de Bretagne Occidentale, a Masters in Business, Finance & Accounting from Université du Maine, and is an Expert Compatable Memorialiste (the French equivalent to a CPA in the United States).
Hiring such a highly qualified individual to serve the role of CFO will have a positive impact on the organization's ability to serve the public interest. While this engagement will have a fiscal impact on the organization, the level of compensation called for within this resolution is contemplated in the current budget. This action will not have any impact on the stability, security or resiliency of the domain names system.
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CEO Succession Planning
Bruce Tonkin presented a resolution to the Board reflected discussion during the Board workshop for the creation of a CEO Search Process Management Work Committee and the Board engaged in a discussion surrounding the need to identify skill sets for the members of the work committee within the resolution.
Bruce then moved the resolution and Ray Plzak seconded the following resolution:
All Board members in attendance approved of Resolution 2011.09.17.09. Rod Beckstrom and Cherine Chalaby were unavailable to vote on the resolution. The resolution carried.Whereas, ICANN's CEO and President announced his intention to leave ICANN at the conclusion of his term, on 1 July 2012.
Whereas the Board has initiated planning for the CEO succession process.
RESOLVED (2011.09.17.09) the Board Governance Committee is directed to recommend a slate of Board members to comprise a CEO Search Process Management Work Committee for the Board to consider at its next meeting.
Rationale for Resolution 2011.09.17.09
The ICANN Board has begun a process for planning for the CEO succession process, to assist in transition of the leadership. The establishment of a work committee will allow the Board to coordinate this process with regular reporting to the Board as a whole, as well as reviewing opportunities for involvement in the community in the CEO succession process. Timely succession of the ICANN CEO will assist the organization in maintaining its work in overseeing the security and the stability of the DNS. The establishment of the work committee will not have a financial impact on ICANN, though resources are likely to be required at later points in the process.
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Board-GAC JWG Final Report Recommendations
Jamie Hedlund provided an update to the Board on the work of the Board/GAC Joint Working Group and the posting of the final report, as well as the need to identify an entity to guide the implementation of the GAC-related Accountability and Transparency Review Team Recommendations. Jamie noted that this resolution recommends the formation of a group of Board members designated to consult with the GAC and oversee the implementation of the ATRT recommendations.
Chris Disspain moved and Katim Touray seconded the following resolution:
Whereas after review of the public comment on the Final Report of the Board-GAC Joint Working Group (JWG), the Board agrees that the recommendations within the Final Report should be implemented in complement to the GAC-related recommendations from the Accountability and Transparency Review Team (ATRT).
Whereas the Board and the GAC have continued work to do to oversee the implementation the recommendations in the Final Report and the GAC-related recommendations from ATRT.
Whereas the JWG was previously tasked with the oversight of the GAC-related recommendations from the ATRT.
Whereas the JWG was dissolved after the Board received the Final Report.
Resolved (2011.09.17.10) the Board directs the Board Governance Committee to recommend the composition of a working group of the Board to lead the Board's coordination with the GAC on the implementation of recommendations of the JWG and the GAC-related recommendations of the ATRT.
Resolved (2011.09.17.11) the CEO is directed to provide staff support as necessary to complete implementation of the recommendations.
All Board members in attendance approved of Resolutions 2011.09.17.10-.11. Rod Beckstrom and Cherine Chalaby were unavailable to vote on the resolutions. The resolutions carried.
Rationale for Resolutions 2011.09.17.10 – 2011.09.17.11
The work of the Board-GAC Joint Working Group and the Accountability and Transparency Review Team are both important to enhancing the relationship between the Board and the GAC. This resolution will provide a formal mechanism to oversee the implementation of the recommendations. This action will not impact the security and stability of the Internet, and is not expected to have an impact on ICANN's resources.
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Process for Board Chair and Vice-Chair Selection, and Board Committee Slating (Discussion Only)
The Chair introduced the topic of planning for the selection of the Board Chair and Vice-Chair at an Organizational Meeting in Dakar.
Bruce Tonkin noted that the Chair/Vice-Chair seclection, as well as committee slating work were scheduled, and noted anticipated refinements in the Board Governance Committee processes for slating and leadership selection. Bruce confirmed that there would be a period for nominations for leadership positions and the process would be run similar to the process run in Singapore. For committee slating, Bruce noted that the BGC would be circulating a request to Board members to identify skills to assist the BGC in slating. Bruce noted that there would also be a new process for identification of committee leadership, including the identification of skills needed to chair any particular committee.
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Any Other Business
Sébastien Bachollet raised a question regarding announcements of community meetings on the ICANN website. The Chair noted that questions of this type would be forwarded to management.
Katim Touray mentioned the follow-up to review the feasibility of coordination of a summit on developing countries and additional information needed to continue that conversation. The Chair requested management assistance in achieving resolution.
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Executive Session
The Board conducted an Executive Session in confidence, with no staff present. No actions were taken in Executive Session.