Minutes | Board Finance Committee (BFC) Meeting
BFC Attendees: Harald Alverstrand, Becky Burr, Danko Jevtović (Chair), Mandla Msimang, and Tripti Sinha
BFC Apologies: Ron da Silva and Ihab Osman
Other Board Member Attendees: Avri Doria and Lito Ibarra
ICANN org Attendees: Michelle Bright (Board Content Coordination Director), Xavier Calvez (SVP, Planning and Chief Financial Officer), Franco Carrasco (Board Operations Specialist), Vinciane Koenigsfeld (Senior Director, Board Operations), Elizabeth Le (Associate General Counsel), Alex Morshed (Finance Manager), Becky Nash (VP, Planning), Shani Quidwai (Sr. Director Finance), and Amy Stathos (Deputy General Counsel)
Invited Guests: Representatives from State Street Global Advisors (SSgA)
The following is a summary of discussions, actions taken and actions identified:
- BFC Workplan – The BFC reviewed its Workplan for FY21 which is on target. The BFC noted that the public comment period for the draft FY22-26 Operating and Financial Plan and draft FY22 Operating Plan and Budget closed on 15 February 2021. ICANN org will provide an update to the BFC on comment received during the public comment period at the next meeting.
- ICANN Reserve Fund Investment Performance Review – The BFC received a presentation from fund manager SSgA, which is one of highest rated investment management firms with a global presence. SSgA reviewed the overall performance of the portfolio, which is invested as per a strategic asset allocation. SSgA discussed both ICANN's long-term asset allocation, which is consistent with the objectives and risk tolerance of the Investment Policy. SSgA also discussed ICANN's tactical allocation, which reflects ICANN's positioning given shorter term views on the market environment. The portfolio has appreciated approximately 7% since SSgA has started managing it in October 2011. In 2020, the portfolio appreciated 12%, though significant market volatility occurred due to the COVID-19 pandemic. The portfolio is up another 2% thus far in 2021 and is ahead of the benchmark by approximately 50 basis points. The Committee engaged in a discussion concerning the financial market outlook and SSgA's strategy for 2021.
- Planning Update - ICANN org provided the BFC with an update on the planning process. The planning team is working on reviewing the 200+ public comments received on the draft FY22-26 Operating and Financial Plan and draft FY22 Operating Plan and Budget. The planning team will brief the Committee on the staff report of the public comments at its next meeting, prior to publication of the report.
Supplemental Fund for Implementation of Community Recommendations (SFICR) – The Committee continued its discussion regarding a SFICR. At its last meeting, the BFC approved a recommendation to the Board to approve the creation of the SFICR. The BFC reviewed and discussed the proposed revisions to the Investment Policy to include a SFICR, and a statement regarding the hierarch of funds. Per the Investment Policy, the Operating Fund has the highest priority because it needs to always be at or above its minimum level to enable daily operations. Immediately after is the Reserve Fund which must be at above its target level to ensure financial sustainability and resilience to unforeseen events. Finally, the SFICR would follow the Reserve Fund because there are no specific allocation requirements. The hierarchy should help ICANN org define how to address shortfalls. The proposed changes to the Investment Policy also include changing the window of assessing the value of the Operating Funds from 48 hours to five business days. The five-day assessment period would also apply to the SFICR. The BFC noted that the references to the IANA transition should be removed from the introduction paragraph of the Investment. Following discussion, the BFC approved a recommendation to the Board for the approval of the revisions to the Investment Policy, noting that this recommendation is subject to the Board approving the creation of the SFICR. The BFC requested ICANN org to develop the proposed resolutions for Board approval of the creation of the SFICR and the revisions to the Investment Policy and bring the proposal back to the Committee.
- Actions: ICANN org to develop the proposed resolutions for Board approval of the creation of the SFICR and the revisions to the Investment Policy and bring the proposal back to BFC.
Published on 11 March 2021