Minutes | Board Finance Committee (BFC) Meeting
BFC Attendees: Maarten Botterman, Ron da Silva (Chair), Danko Jevtovic, and Tripti Sinha
BFC Apologies: Khaled Koubaa
Other Board Member Attendees: Avri Doria
ICANN Org Attendees: Susanna Bennett (SVP, Chief Operating Officer), Michelle Bright (Board Content Coordination Director), Xavier Calvez (SVP, Chief Financial Officer), Franco Carrasco (Board Operations Specialist), Elizabeth Le (Associate General Counsel), Becky Nash (VP Finance), Wendy Profit (Manager, Board Operations), Shani Quidwai (Director of FP&A), Lisa Saulino (Board Operations Senior Coordinator), and Amy Stathos (Deputy General Counsel)
The following is a summary of discussions, actions taken and actions identified:
- BFC Workplan – The BFC reviewed its Workplan, which is on target.
Update to the Investment Policy of Secured Overnight Financing Rate (SOFR) - In the 10 June 2019 BFC meeting, a summary of the SOFR, a new index, was presented to the BFC. SOFR will be replacing LIBOR by 31 December 2021. ICANN org recommended that the BFC recommend that the Board update Paragraph 4.3 Eligible Investments of the New gTLD Investment Policy (Policy), to include the new index to achieve capital preservation. As discussed in detail at the BFC's 10 June 2019 meeting, adding the next index in the New gTLD Investment Policy will permit the portfolio managers to purchase floating rate notes that are issued at par and mature at par, thus providing for maximum preservation. Following discussion, the BFC approved the recommendation that the Board approve the proposed revisions to the New gTLD Investment Policy to include SOFR.
- Actions: ICANN org to prepare relevant materials for Board consideration.
Environmental, Social and Governance (ESG) Investing Overview and Discussion of the DWS and Northern Trust ESG - The benefits of ESG was presented to the BFC in the meeting on 10 June 2019. At that meeting, the BFC then asked ICANN org to provide additional information on the application of ESG investing, including which ESG metrics are most important and most aligned with ICANN. Pursuant to the Committee's request, ICANN org recommended that the BFC recommend that the Board include standard ESG investment criteria in the Investment Policies as follows: (i) include language in the ICANN Investment Policy Statement to include language that would permit ICANN's investment managers to apply an ESG overlay using the "best-in-class" ESG methodology; (ii) use the standardized ESG overlay approach of the investment firms rather than customizing an ESG approach; and (iii) the standard ESG ratings would result in no customization or Board or ICANN org decided criteria. Following discussion, the BFC approved the proposed recommendation to the Board to include standard ESG investment criteria in the Investment Policy
- ICANN org to prepare redline of the proposed revisions to the Investment Policy and the Investment Policy Statement for consideration by the BFC at its meeting in September.
- ICANN org to prepare relevant materials for Board consideration at ICANN 66.
Updates on the Planning Process of the Five Year Operating Plan and Financial Plan (Five Year OP&FP) and FY21 Operating Plan and Budget (FY21 OP&B)
- Five Year OP&FP - The Committee received an update from ICANN org on the timing and planning process of Five Year OP&FP. ICANN org shared with the BFC the public comments received on the draft financial assumptions and projections and operating initiatives. Eight community groups participated in the public comment period. Overall, the comments received were positive. The commenters agreed with the financial projections, the proposed framework, the financial sustainability approach, and the commitment to replenish the reserve fund. The Committee observed that some comments were received regarding funding from the next round of new gTLDs. The BFC noted that the current projections do not include the potential funding benefit of next round of new gTLDs. The projections will be updated on an ongoing annual basis and will thus be adjusted to reflect changes in funding as appropriate. The Committee discussed the import of the appropriate level of communications with the community regarding the next round of new gTLDs planning activities. The results of the public comment period will be shared with the Board at the September Board workshop. The Report of Public Comments was published on 19 August 2019.
- FY21 OP&B – The Committee received an update from ICANN org on the timing and adoption process of the FY21 OP&B. Per usual, the planning process began in July, immediately after the adoption of the FY20 OP&B. The Committee reviewed a draft timeline of the process, which tracks the normal planning process schedule.
Published on 21 November 2019