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


         This is my understanding of the proper process once a COI 
allegation is made regarding a director, based on the rules I described 
below (the *process* has nothing to do with Rob personally, or for that 
matter Milton).  The first step is to figure out which of two classes of 
cases the facts present.  The first class covers cases where no reasonable 
person could think that the director or his family has a "financial 
interest" (as defined by the rules, below) in a matter before ICANN, and 
that the financial interest is "material".  In that situation, the 
allegation should be dropped.    The second class covers cases in which a 
reasonable person *could* think that the director or his family has a 
"material" "financial interest" in the matter.  In that case, the director 
should place the matter before the Conflicts Committee (or, if he is 
himself a member, the disinterested members of that committee) for their 
judgment as to whether a conflict of interest exists.  All of this can be 
carried out in a manner respectful of both people and rules.

         In this case, it seems plain that Rob has a "financial interest," 
as defined by the rules, in ICANN decisions directly affecting 
Neulevel.  Barring unexpected factual developments (all I really know is 
that Lynn identified herself as a Neulevel employee at recent RIPE and 
ICANN meetings), it seems to me, further, that the interest is material.  I 
can imagine, OTOH, a person arguing that that the interest is *not* 
"material."  So long as reasonable people can differ, the director should 
place the matter before the disinterested members of the conflicts 
committee for their judgment.  At the moment, the committee has only one 
other member (Karl), since Phil Davidson left the Board and hasn't been 
replaced on the committee.  It would be appropriate for the Board to name a 
new member to replace Phil, so that the committee can be at full strength.


Jonathan Weinberg
Professor of Law, Wayne State University

At 12:43 AM 5/17/2002 -0500, you wrote:
>in a case like the one at hand, what in your mind is the due process once
>Milton finds what he feels is a juicy piece of gossip? Can it be fair and
>can it be respectful of people as well as of rules?
>Alejandro Pisanty
>.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
>      Dr. Alejandro Pisanty
>Director General de Servicios de Computo Academico
>UNAM, Universidad Nacional Autonoma de Mexico
>Av. Universidad 3000, 04510 Mexico DF Mexico
>Tel. (+52-55) 5622-8541, 5622-8542 Fax 5550-8405
>** 10 Aniversario de Internet Society - www.inet2002.org en Washington, DC
>---->> Unete a ISOC Mexico, www.isoc.org
>  Participa en ICANN, www.icann.org
>.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
>On Thu, 16 May 2002, Jonathan Weinberg wrote:
> >       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
> >
> > _______________________________________________
> > Discuss mailing list
> > Discuss@icann-ncc.org
> > http://www.icann-ncc.org/mailman/listinfo/discuss
> >
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