Minutes | Board Finance Committee (BFC) Meeting 10 December 2019

BFC Member Attendees: Ron da Silva (Chair), Harald Alvestrand, Becky Burr, Lito Ibarra, Danko Jevtović, Ihab Osman, and Tripti Sinha

Other Board Member Attendees: Maarten Botterman, León Sánchez, Sarah Deutsch, Chris Disspain, Avri Doria, Akinori Maemura, Göran Marby, and Matthew Shears

ICANN Executive and Staff Member Attendees: Susanna Bennett (Chief Operating Officer), Xavier Calvez (Chief Financial Officer), Franco Carrasco (Board Operations Specialist), Mandy Carver (SVP, Government and Intergovernmental (IGO) Engagement), James Caulfield (VP, Risk Management), David Conrad (SVP, Chief Technical Officer), Sally Newell Cohen (SVP, Global Communications), Mia Crampton (Internal Communications Senior Manager), Samantha Eisner (Deputy General Counsel), Vinciane Koenigsfeld (Director, Board Operations), Alex Morshed (Finance Manager), Becky Nash (VP, Finance), David Olive (SVP, Policy Development Support), Wendy Profit (Board Operations Specialist), Shani Quidwai (Director, Financial Planning & Analysis), Lisa Saulino (Board Operations Specialist), Amy Stathos (Deputy General Counsel), Theresa Swinehart (SVP, Multistakeholder Strategy and Strategic Initiatives), Gina Villavicencio (SVP, Global Human Resources), and Victoria Yang (Operations Senior Program Manager)

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

1. Draft Five Year Operating Plan and Financial Plan (Five Year OP&FP) and FY21 Operating Plan and Budget (FY21 OP&B)

   1. Structure and presentation of draft plans - The Committee received an update from ICANN org on the structure and presentation of the draft Five Year OP&FP and the FY21 OP&B. ICANN org explained that, while the Bylaws require the plans be separate for community review and approval, the draft plans are in one document with clear distinction in order to enhance readability and understanding of each draft plan. The document has a "Highlights" section, which provides an overview of the different initiatives and key factors, along with an explanation of how to navigate the document. For each draft plan, there is a description of the Operating Initiatives and the Functional Activities; for each Functional Activity, there is a description of the purpose, scope, operating initiative contribution, strategic goals and targeted outcomes supported, activities, how progress is tracked, resources, and considerations. ICANN org explained that the structure of the document includes color-coding, grouped categories, and links throughout in order to increase transparency and accessibility.

   2. Five Year OP&FP – The Committee received an update from ICANN org regarding the Five Year OP&FP to be posted for public comment. There are two key areas: the 35 Functional Activities, which are day-to-day activities performed by ICANN org teams organized by function; and the 15 Operating Initiatives, which are high-priority initiatives aimed at achieving the strategic plan. ICANN org noted that, per the Bylaws, the Five Year OP&FP will be rolling forward each year, and there will be opportunities to further update and refine the plan as needed. ICANN org reminded the BFC that for planning purposes, the Five Year OP&FP does not include any funding from new releases of top-level domains and assumes flat or unchanged fee structure to ICANN. It was also noted that an annual allocation to the Reserve Fund is reflected in the plan, and the Reserve Fund is expected to be fully replenished by the end of FY25 (two years ahead of the initial target). The BFC and ICANN org also discussed the handling of potential recommendations and actions, not yet approved or budgeted, but which are incorporated into the annual cycles of planning as an element of work that needs to be incorporated and prioritized, and funded, once such actions are approved. ICANN org suggested that it amend the document to provide more clarity on how implementation of Board-approved recommendations stemming from reviews are included in the plan. ICANN org further noted that the goal is to provide the community with a comprehensive draft plan that provides the information necessary to understand the initiatives, review the allocated resources, and trigger healthy engagement and conversations from the community.

      • Action: ICANN org to clarify in the document how implementation of Board-approved recommendations stemming from reviews are included in the plan.

   3. FY21 OP&B - The Committee received an update from ICANN org regarding the FY21 OP&B to be posted for public comment. ICANN org explained that the draft FY21 budget is stable with modest growth for funding and expenses, and ICANN org headcount is aligned with this growth. ICANN org noted that there is an expected annual growth of funding of 1.5% per year, which is less than inflation; and that the community and ICANN org will need to find a set of opportunities annually to save costs while carrying out the same amount of work in order to be able to fund the plan. There are four categories of funds, including the Operating Fund; the Reserve Fund; new gTLD funds; and Auction Proceeds. At the end of FY19, the Reserve Fund was $116 million, the Board approved an allocation of FY19 excess of $3 million to the Reserve Fund (to be deposited in December 2019), and it is expected that the Reserve Fund will reach approximately $143 million by the end of FY25, which is twelve months of operating expenses and the minimum target level of the Reserve Fund. With regard to review and adoption of the draft plans, they will be posted for public comment on approximately 20 December 2019, public comment period will be open through February 2020, three webinars with the community are scheduled in January 2020, further discussion with the community will occur at ICANN67 in Cancún, adoption by the Board is anticipated in May 2020, and then there will be the Empowered Community review period.

      • Actions: ICANN org to post the draft Five Year OP&FP and the FY21 OP&B for public comment.

Published on 20 January 2020