Re: [ALSC-Forum] The at-large is not just about voting and directors'seats

[Karl Auerbach]

On Fri, 20 Jul 2001, Pindar Wong wrote:

> Given your legal training etc, I'm interested on your views on the
> statutory/nonstatutory member issue (and its relationship to rights) that
> was discussed back in 99.
> http://www.icann.org/santiago/membership-analysis.htm

When I ran for Director I had a discussion of that issue in my "platform":
        http://www.cavebear.com/icann-board/platform.htm#full-members

While this stuff may be dismissed as being an element of California law we
need to remember two things:

   - ICANN is a California corporation and hence governed by California
     law.

   - The California legislature has had a lot of experience with
     corporations, commercial and non-profit, over the years
     and the State's law reflects a lot of good and hard-earned knowledge
     about what kind of openness and accountability are useful and
     feasible in corporate structures.

>From the point of view of the ALSC it might be best to avoid the
"statutory/non-statutory" issue and, instead, focus on the wisdom of
various kinds of access and accountability and treat the California list
as an example of what has been found reasonable and possible.

Let's look at some of the specific kinds of access/accountability:

   - Special meetings of members may be called by 5% of the members.

This one is a mechanism designed to address the "where's there's smoke
there's fire" concern - if one can get 5% of the members to ask for a
meeting then there is probably a serious issue that is in need of being
addressed.

Whether this can be accomplished via electronic meetings is an open
question.  Certainly given the chaos of e-mail lists there is much to
wonder about whether an e-mail meeting works at all.  I think that we need
to seriously rethink the rules of procedure for electronic meetings.

Some good thinking about that subject has been posted at:
        http://www.bitshift.org/archives/rror.shtml

  - Proxies are allowed unless withdrawn by bylaws or articles. Proxies
  may be limited by articles or bylaws. Proxies are revocable.

I've never gone out and gathered proxies but I can see how this is a
valuable tool for groups who are opposing "management" can use this to
belie the "silent majority" argument that is often raised.  It's
tantamount to laying ones cards on the table and challenging the
other side to come up with a better hand.

  - Members may bring derivative actions.

This is The Big One.  To my way of thinking this is the sine qua non among
the rights of an at-large member.  Without this right there is no real
"accountability".

It is not uncommon for there to be statutory protections against spurious
derivative actions.  California can be used as an example here: One has to
post a substantial bond ($50,000 if I remember rightly) or get a fairly
large number of members to be co-plaintiffs.  It is worthwhile to observe
that here in California we have a lot of corporations and yet we don't see
derivative actions occuring all that frequently.


  - Most amendments to articles must be approved by Board and members (and
  any other persons specified in articles).

ICANN's articles state that ICANN is to operate for the benefit of the
Internet community as a whole.  And who is that Internet community if not
the At-Large?  Seems to me that those to whom ICANN owes its obligations
should have the right to approve of changes in ICANN's organic documents,
the Articles and By-Laws.

  - Membership lists and accounting books and records and minutes must be
  made available to members for proper purposes.

This is another Big One.

This provision is the essence of transparency.  There are two issues here,
that of access to ICANN's records - which I may say is something that
seems to be denied even to Directors - and that of access to the At-large
membership roll.

As for access to records - why not?  Many believe that ICANN is responsive
only to those who fund it.  Those who have such a belief and those who
wish to disprove it both need to know where ICANN's revenue comes from and
where it is going.  Equally valid are the needs of ICANN's beneficiaries,
the Internet Community, to see the raw material upon which ICANN has made
its decisions.  For instance, nobody seems to have ever seen the reports
made by the accounting and law firms regarding last year's TLD selections.

As for access to the membership roll - yes there is a privacy issue.  But
in may jurisdictions, California being but one, the legislature has
considered the experience in corporate governance and has decided that the
integrity of the electorial process requires a limited breach of privacy.

One has to note that the right of access to the membership rolls generally
is not unlimited.  Again using California as an example, the person
obtaining the lists must promise to use it only in conjunction with
corporate purposes and the corporation retains clearly stated rights to
bring legal action to stop amy misuse.

  - Members may amend the bylaws; however, the bylaws may provide that the
  amendment may occur only with the approval of a specified person other
  than the Board. (e.g. SOs).

This is a valuable provision - it tells the Board that there is a higher
authority; that if the Board fails to act the membership can.

  - Directors elected by members may be removed by members.

Recall is a useful means of holding one accountable not just at the next
election but now.

  - Members can bring legal actions to determine the validity of
  elections.

This is an important backstop to ensure that elections are fair.

                --karl--