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Does ICANN Need to Evolve Its Code of Conduct?

If you follow the Internet governance world like I do, you’ve no doubt had time to ponder the news of former ICANN Board Chair Peter Dengate Thrush’s appointment as Executive Chairman of Top Level Domain Holdings Limited (TLDH). This was a seemingly fast jump from the body that coordinates the Internet (whose most recent milestone was to approve the creation of new gTLDs) to one of the key companies that stands to actively benefit from this burgeoning part of the domain name industry. Further, he’s taken up a position that, according to reports, will allow him to benefit substantially as well.

I’m not sure I could sum up the situation better than Antony Van Couvering, CEO of TLDH, who said on the company’s website:

“Peter championed successfully the approval of the new gTLD programme at the highest levels and with Peter on board I have every confidence we will achieve the same success at TLDH.”

Peter seems to have made a shrewd decision in taking on his new role with TLDH. And, it would seem that Antony made an excellent choice in securing someone with the depth of experience and knowledge that Peter has. And frankly, who among us would pass up such an opportunity? Likely not I.

Let me state upfront that there’s nothing in the ICANN rules that precludes Board members from advancing their career in any way they choose once they have left ICANN’s Board.

What we have here are rational actors acting rationally under the existing rules.

That said, the time has come in the evolution of the Internet to more closely scrutinize the free flow of key industry influencers. They can currently move from organization to organization without the constraints of non-compete and governance rules regarding employment in the industry after leaving ICANN. In my opinion, what may have been fine for a young, immature sector surely cannot continue. We are talking about increasingly large flows of money changing hands and with that comes the possibility of material conflict.

Perhaps we can take some important lessons from the private sector, government and regulatory bodies, and I would argue, apply them to the ICANN model. After all, I believe it is important to create a dynamic organization where good people (and remember, ICANN’s Board is largely volunteer-based) are protected from being put in harm’s way leading to undue temptation.

The World Bank is an excellent example of an agency that has financial influencers coming and going all the time. The Bank sets very high standards for ethical practices for both existing and exiting Board members. Their Code of Conduct clearly spells out to a number of points, including requirements on employment once a director leaves the Bank. Here is one of the key statements that really resonated with me: “For a period of one year following the end of service as a Board Official, a Board Official shall recuse himself or herself from involvement in or influence on matters related to the Organizations’ dealings with his or her future employers.”

In Canada, we have seen similar rules imposed through the Conflict of Interest Act on departing federal public officer holders, Ministers of Parliament and their staff. Amongst other things, a key purpose of the Act is to, “establish clear conflict of interest and post-employment rules for public office holders.” Specifically, Part 3 places a number of restrictions on public office holders once they leave office.

If you were to consider this to be the extreme end of the accountability spectrum and ICANN to be at the other end, I would argue that there is a great deal of space in which to find a more appropriate balance for the body that governs the Internet. At a bare minimum, a cooling off period is more than reasonable and a common practice in most industries. Ideally, I would like to see clear post-employment rules for ICANN Board members, as well as staff.

Interestingly, ICANN accepted the recommendations of the Accountability and Transparency Review Team (ATRT) earlier this year. Fundamentally, the ATRT is the body tasked with making sure ICANN does the job it is mandated to do, and does it in an open and consultative manner. The ATRT review is a lengthy process that takes place every three years. Unfortunately, although the ATRT examined many aspects of Board decision-making, the issue I have raised in this post was not among the many items considered in the review. I would strongly recommend that the issue of departing Board members and conflicts of interest be closely examined as part of the next round slated to begin in 2013, if not sooner.

What do you think? Does ICANN need to evolve its code of conduct?

By Byron Holland, President and CEO of CIRA

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Just so! Neil Schwartzman  –  Jul 28, 2011 2:23 PM

CircelID doesn’t have a +1 button so

+1 & me too!

World Bank? Canada? Examples of propriety? Elliot Noss  –  Aug 3, 2011 2:05 PM

Wow. Using the World Bank or Canadian politics as examples of propriety in this sense is stunning, and it would seem a great example of form over substance. How many former Liberal ministers are now lobbyists, oops, partners in law firms?

As I have said in other fora, I believe the issue here is one of consistency. I am not (at all) calling for ICANN board positions to be paid. I think that Peter’s public positions have always been consistent with what he will now be doing.

MOST importantly, the positions you compare are (very) well paid and include many non-pecuniary financial perks. The ICANN position in question is volunteer, although only recently with some small compensation added. Being able to keep interested volunteers as part of the ICANN process is extremely important to its long term health.

But ... Neil Schwartzman  –  Aug 3, 2011 2:24 PM

in exactly the same sense that former Liberal parliamentarians 'served' at a "mere" $150,000/year their expectation was to get hired somewhere for top rate afterwards. one can safely assume the same mindset could be held by by the chair of the ICANN BoD. Also, as a volunteer to ICANN, I never heard from the guy - not sure where all the 'rah rah rah' volunteer motivation is expended, but it sure isn't in the ALAC.

half full? half empty? Elliot Noss  –  Aug 3, 2011 3:29 PM

I guess it depends on if you think people are inherently good or bad so maybe you can safely assume, but I can't. I like to give people the benefit of the doubt AND judge them by their deeds. if your "mere" sarcasm was in reference to my board chair compensation reference, i note that PDT fought for this while being well on the record that he was leaving and so would not personally benefit. not sure about what you are looking for as a volunteer in terms of rah rah. virtue is its own reward. my point was to not create a DISincentive.

Fewer, and paid, Board members Kieren McCarthy  –  Aug 3, 2011 6:23 PM

I am have become increasingly convinced that the Boston Consulting Group’s review of the Board was 100% right in this respect.

They said, among other things:

* Fewer Board members
* Make them paid positions

I think the BCG saw where it was all going - and they have a hell of a lot of experience with different Board and different industries.

In fact, the one thing that sticks in my mind during a public consultation of their report was when they were faced with the age-old ICANNism that the organization is utterly unique, like no other, and so no rules exist that can be directly applied to it.

The head of the review group said something like: “Well, ICANN is certainly a little different in terms of structure but I don’t think that it is really any different in terms of how its Board needs to work, and what makes for good corporate governance.”

Anyway, in the Board’s subsequent review of itself, they dropped the idea of reducing their numbers, along with lots of other good ideas such as fewer Board meetings, fewer Board Committees etc etc.

The ATRT picked up on the Board compensation element but failed to read the BCG report that said very clearly that its recommendations should be viewed as a package and so the ATRT avoided saying the Board should reduce its numbers.

So taking into account all of that - and Byron’s well-made points above - if you were to assume there were fewer Board members and they were compensated (ignore the political process of how you get there for a second), I think it would be a far better system and it would avoid many of the problems that will continue to raise their heads as ICANN and the domain name system becomes more mature, larger and subsequently richer.

It would also bring in a higher quality of Board member (because the best people are already sought after), one who could reasonably spend more time on the issues, and it would remove the flipside of volunteerism - that people are less accountable and more sensitive to criticism (“I don’t even get paid to do this”).

And it would hopefully bring an end to the three-hour public self-congratulations whenever anyone leaves. You do the job, you get paid for it, you make things better. It would probably also reduce the ridiculously high level of politics in the ICANN world.

a couple problems with this kieren Elliot Noss  –  Aug 4, 2011 12:56 PM

first: "Well, ICANN is certainly a little different in terms of structure but I don't think that it is really any different in terms of how its Board needs to work, and what makes for good corporate governance." is simply consultant-speak for "if I want to apply some old formula to the problem I better note that it truly is different, but I can still apply the old formula...". to do otherwise would require MUCH to much work and original thinking. most importantly, the board composition and compensation does not exist in a vacuum. the board is the size it is because of all the various groups that insist on a seat at the table. compensation would mean that the stakeholder board members would now be treated differently than the other stakeholder volunteer positions. not saying either is right or wrong, just that changing those two variables could not be done in a vacuum. it would require full-on reform again and that is too much for just THIS problem.

we may not have to boil the ocean Byron Holland  –  Aug 4, 2011 6:20 PM

Elliot, Just to be clear, my blog was not a criticism of PDT or Antony, as I attemped to make clear. PDT, as you note, has made a significant contribution to the community as has Antony from his point of view. The transaction was merely catalytic for me in reflecting on what could become a real or perceived governance failing of ICANN, particularly as the dollars associated with this industry really start to flow. Though I used a lot more words, the fundamental thesis is this: those who make the rules regarding the flow of dollars should not be able to immediately jump to other side and benefit from said flow of dollars. Simple, basic, good governance. I would be very hard pressed to understand why some reasonable "cooling off" period where the policy maker cannot immediately, financially benefit from the policy they created would be problematic? In fact, I think it would be very helpful in improving the perception, if not the actual process, of opening up the gTLD space.

then let's start with the UDRP Elliot Noss  –  Aug 4, 2011 10:00 PM

where panelists advertise that they are panelists on their websites soliciting clients to do complainant work! they make the rules WHILE benefiting currently. in addition, there is no known process to amend the UDRP rules AND the harm is not theoretical. it is actual. and for me to just be clear as well, I think as long as the board is volunteer then a cooling off period is inappropriate. I would also note that the new gTLD process is not a regular type of board decision and making rules on the basis of outlier facts is not a strong practice.

The risks of reviews of reviews Kieren McCarthy  –  Aug 5, 2011 5:19 PM

I have been meaning to do an analysis of what has happened to the review recommendations made across ICANN - we've had GNSO, Board, One World Trust, ATRT, ccNSO, ALAC and so on. I'm pretty sure that the same pattern has emerged each time. A huge amount of effort is put into making sure the remit is kept as tight as possible. An independent reviewer is then chosen - and typically the most conservative group chosen. Then the reviewer goes out of their way to hold meetings and sessions and public comment periods, sometimes going on for years. And then at the end of it, a small group of ICANN insiders (chosen in a closed process) are chosen to look at the final recommendations, and they pull out everything that they don't like. The result of all this is a huge dose of group-think. And I'm pretty much convinced that this is a continuing source of ICANN's problems. ICANN as a broad organization recognizes that it needs outside perspective, it needs fresh blood and fresh ideas - the whole reason we have these independent reviews - but then that stale, insider culture reasserts itself right at the end. I don't think anyone is bad or wrong and I think that in the majority of cases people genuinely believe they are making the right decisions given their knowledge of ICANN and its "uniqueness". But the reality is that people remain permanently unhappy and the same issues fester for years. What we've seen recently has been the remarkable assertion - always by insiders - that "we've already looked at this issue a number of times and decided against it". That perfectly describes the flawed process I've outlined above. The same issues keep coming up because the very small group of people that ultimately assert their joint viewpoint haven't changed their mind. But they are most likely wrong. Anyway, that was a long explanation. The fact is there is no actual reason why there needs to be two Board members for the supporting organization, beyond the politics of it (they don't want to lose comparative power). And there is no earthly reason why we need a Nominating Committee to select 8 Board seats either. It's an historical overhang because of a flawed election process years ago. But, again, it has become embedded in people's minds, and they have invested too heavily in it. Do you *really* need a Board seat for the TLG and the RSSAC and the SSAC and the IETF? Why? Are you even sure what the difference is between them? And hasn't it been just the same eight individuals rotating around for the past 10 years? So my view is that ICANN - whether it likes it or not - is going to have to break out from its cosy existence and recognize that change is not a threat but a necessary process. As soon as the organization gets less defensive, it will find many of its problems fade away.

the ssac is probably the one among that lot that's been very useful Suresh Ramasubramanian  –  Aug 8, 2011 3:16 AM

As for the others - if circleid had a "like" or "+1" button I'd be clicking it right about now.

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