[nc-org] Re: [ncdnhc-discuss] Board conflict of interest on .org

[Jonathan Weinberg <weinberg@mail.msen.com>]

	Dave Crocker has asked that somebody parse the specific terms of the ICANN 
COI rules; here goes.  A director has a "financial interest" if he, or his 
spouse, has a "compensation arrangement with any entity whose business or 
operation has been or will be directly affected by a decision or action of 
the Corporation" (that is, ICANN).  Secs. 2.2 & 2.3.  If that financial 
interest is "material," the Director is classed as an "Interested 
Director."  Sec. 2.6.  Often, reasonable people can differ whether a 
financial interest is material, so two provisions of the COI rules refer to 
mechanisms for resolving that dispute.  First, with regard to any matter 
pending before ICANN, each director must disclose to the Conflicts 
Committee "any matter that could *reasonably be considered* to make him an 
"Interested Director."  Sec. 5.2 (emphasis added).  In this case, thus, Rob 
had an obligation to make disclosure to the committee (himself and Karl) so 
long as a reasonable person could consider the interest deriving from his 
spouse's Neulevel employment to be "material."

	Second, with respect to any proposed transaction, contract, or arrangement 
before ICANN, each director must disclose "any actual or possible conflicts 
of interest."  Secs. 7.2 & 8.1.  Section 7.1 indicates that this 
requirement applies only when the interest is material, but the reference 
to "possible" conflicts suggests to me that the director must disclose 
whenever, as in section 5.2, the interest could reasonably be considered to 
be material.  Once the director makes the disclosure, then "the 
disinterested members of the Conflicts Committee shall determine whether a 
conflict of interest exists."  Sec. 7.3.


Jonathan Weinberg
weinberg@msen.com