At its August 25 meeting, the ICANN Board approved a resolution which effectively opens the door to the possibility of moving to a paid Board.
The resolution (and the extremely useful rationale that now accompanies Board resolutions as part of ICANN's ongoing efforts towards ever-greater transparency) is reproduced at the end of this post.
Currently, only the Board Chair is compensated. But as I and others have said over the past few months, paying the rest of the Board may benefit ICANN as a whole. Board members are expected to work extremely hard (almost non-stop during the thrice-a-year ICANN meeting weeks), read up on everything that's going on in a organization as diverse and complex as ICANN, give up on the rest of their professional careers (being a Board member is not very compatible with holding a day-to-day job) and are currently not compensated for all of this.
I am glad to see the Board finally looking seriously at this issue. I know that within the Board, there is no consensus on whether ICANN directors should be paid or not. Some probably see the issue as too self-serving and are therefore loath to address it. That's understandable, but I think they are just doing their job serving the ICANN community by looking at these issues, even though they may feel a little too close to home.
To look into whether and how directors should be paid, the Board has asked ICANN staff to consult an expert. Towers Watson has been retained as the expert and ICANN Staff will also look into revising ICANN's conflicts of Interest Policy for its directors.
The Board resolution:
Process Steps for Consideration of Board Remuneration
Whereas, ICANN currently provides compensation to the Chair of its Board for the services the Board Chair renders as a Chair of the Board.
Whereas, ICANN desires to investigate whether it is appropriate to expand the availability of compensation for service on the Board to other Board members ("Directors").
Whereas, ICANN is a nonprofit California public benefit corporation that is exempt from Federal income tax under §501(a) of the Internal Revenue Code of 1986, as amended (the "Code") as an organization described in §501(c)(3) of the Code.
Whereas, ICANN may not pay directors more than Reasonable Compensation as determined under the standards set forth in §53.4958-4(b) of the regulations issued under §4958 of the Code (the "Regulations").
Resolved (2011.08.25.09), the Board shall direct staff to take all steps necessary to consider the appropriateness of compensation for voting Directors.
Resolved (2011.08.25.10), as part of the process of reviewing any Director compensation, the Board shall retain an Independent Valuation Expert, as that term is defined in §53.4958-1(d)(4)(iii)(C) of the Regulations (an "Expert"), to consult with and to advise the Board regarding the appropriateness and level of any Director compensation arrangements, and to issue to the Board a Reasoned Written Opinion, as that term is defined in §53.4958-1(d)(4)(iii)(C) of the Regulations (the "Opinion"), from such Expert regarding the ranges of Reasonable Compensation for any such services by a Director.
Resolved (2011.08.25.11), the Expert's opinion shall include all factors the Expert determines to be appropriate regarding the appropriateness and the level of compensation to be paid a voting Director for services to ICANN as a Director, including offices held on the Board, attendance at Board and Committee meetings, the nature of service on the Board and on Board Committees, and Appropriate Data as to Comparability, as that term is defined in §53.4958-6(c)(2) of the Regulations, regarding director compensation arrangements for U.S.-based, nonprofit, tax-exempt organizations possessing a global employee base.
Resolved (2011.08.25.12), after having reviewed the Expert's Opinion, the Board shall meet with the Expert to discuss the Expert's Opinion and to ask questions of the Expert regarding the Opinion, the Comparability Data obtained and relied upon, and the conclusions reached by the Expert.
Resolved (2011.08.25.13), that the Board shall adequately document the basis for any determination the Board makes regarding Director compensation arrangements concurrently with making that determination.
Resolved (2011.08.25.14), ICANN's General Counsel is authorized and directed to retain Towers Watson as the Board's Independent Valuation Expert to consult with and to advise the Board regarding Director compensation arrangements and to issue to the Board the Reasoned Written Opinion described above regarding the appropriateness of and ranges of Reasonable Compensation for any such services by a Director.
Resolved (2011.08.25.15), ICANN's staff is herby directed to post for public comment a proposed revised Conflicts of Interest Policy and proposed revised Bylaws that will be required if the Board approves a recommendation that eligible Board members should be compensated for services to ICANN as Directors of ICANN.
Rationale for Resolutions 2011-08-25-09 – 15
Over the past several years, ICANN has been considering issues surrounding Board compensation. The Board has publicly discussed the matter and has reviewed independent analysis and advice on the matter. For example: (i) there were calls from the community in relation to ICANN Framework for Accountability and Transparency that the entire Board be compensated; (ii) budget contingency discussions since FY08 have involved the concept of possible Board remuneration; (iii) independent evaluation experts provided studies on other non-profit organizations and Board member remuneration; (iv) the Boston Consulting Group ("BCG") that conducted the Board Review suggested that relatively modest fees to compensate directors for time may be appropriate; (v) the Board Review working group acknowledged general support from BCG and community for director remuneration, but recommended further study in coordination with General Counsel; and (vi) the Accountability and Transparency Review Team s! pecifically recommended that the Board should implement a compensation scheme for voting Directors.
In August of 2010, the Board approved compensation for the Board Chair. Since that time a call for all voting directors to be compensated has continued, most recently through Recommendation 5 from the Accountability and Transparency Review Team.
Taking all steps necessary to ensure that consideration of voting director compensation is done in accordance with all appropriate laws, rules and regulations positively impacts the accountability and transparency of ICANN. Further, informing the community through posting all of the process steps the Board is following, as well as the proposed revisions for the Conflicts of Interest Policy and the Bylaws, significantly enhances ICANN's transparency in this matter.
Following these steps will have some fiscal impact on ICANN as it will cost some to engage the Independent Valuation Expert, however that eventually was budgeted for when the Board adopted the ATRT Recommendations. Taking these steps will not negatively affect the security, stability or resiliency of the domain name system.