As seen through the eyes of Mikael Pawlo, Sweden Post, Corporate Strategy, email@example.com
August 9, 1998
New Zealand attended its first IFWP conference at Geneva, unclear as to expectations or outcomes from such an event. Upon return, we have spent some time considering the issues raised.
What follows is commentary on the key points from our visit. Appended are more detailed bullet points.
We began be reassessing what we saw as the key open items tabled at Geneva,
As a next stage, we tried to establish a vision of what the New Entity might like and be doing when it eventually gets up and running.
It is important to consider where the new entity's activities are currently conducted, as an effective transition process is critical to maintenance of stability to all services. We perceived a view that existing organisations can be picked straight up and simply dropped into the new entity, hence "what things it should not do".
The new entity is being created to do specific tasks and, in our opinion, those tasks need to be tightly defined as part of its incorporation. The entity should *only* do those tasks, not other legacy aspects, e,g, continue management of .us.
Effective transition will thus require thinking by affected organisations. Whilst that will be outside the scope of the New Entity, it is incumbent that these aspects are communicated to affected parties. We have made a strong assumption that those parties deliver services under US Govt. Contract so there should be no difficulty in them addressing there own issues and resolving risks.
ACCOUNTABILITY THROUGH OWNERSHIP
Reconciling how the Board of the New Entity should be accountable to the multifarious stakeholder groups proved, at best, difficult in Geneva. We could not see who the Board was accountable to, nor indeed what for.
We take a more simple view of the New Entity, treating it no different to most other organisations, i.e. the BOARD should be accountable to its OWNERS. It is through the relationship between the OWNERS, the BOARD and its MANAGEMENT, that service is delivered to all CUSTOMERS.
Note that for this high level view of accountability, it is not material whether OWNERS are structured as shareholders or members, but more soon.
Discussion in Geneva (certainly in our groups) focused on activity and direction of the New Entity. These ranged from what the Board could or could not do - the answer seemed to be "very little without prior permission". Control of "decisions made" was a key feature in the discussions that we observed.
We take the view that it is the job of the Board to make decisions, within an appropriate framework. It will be beneficial for the customers of the New Entity that the business can get along without having to always continually turn around to check out what its owners/stakeholders are thinking.
The next stages lay out a decision-making framework in stepwise manner. We have tried to map out in a transparent manner, what the key decision areas are, and who has ultimate responsibility for them.
OWNERSHIP and MEMBERSHIP
There is little to choose, in our opinion, between a shareholding organisation and membership form. It was clear in Geneva that the OWNERS would be a Membership style organisation. This means that it will need to create its own infrastructure to gain/retain members to the organisation.
The Geneva consensus was that the membership should be as widely held as possible, with low barriers to entry. Creation of an "open" membership association should achieve this goal. A simple membership structure could be adopted -- one class, one fee, one vote. This will provide a vehicle for motivated members of the "Internet community" to join and participate in the wider decision making framework of the New Entity.
It is expected that a membership style organisation would elect some Executive body, or Council, through which it would manage "the business of the membership". This would be a completely different structure to that of the Board, whose goal is "the business of the new entity".
This Executive Members Council is probably analogous to the SUPPORTING ORGANISATION Council's, but focusing on representation for its MEMBERSHIP, i.e. the business Owners. It is presumed that through this channel, Members would be able to determine those Board positions to which the Owners are entitled.
There appeared general agreement that SUPPORTING ORGANISATIONS should be the vehicles for generation of specific policies. It also seemed clear that those SUPPORTING ORGANISATIONS should be self-organising, provide policy and provide Directors to the Board.
However, it was not clear whether this meant that the SUPPORTING ORGANISATIONS should also be OWNERS, or whether they could be free standing entities in their own right.
In the first scenario, organisations would form a sort of mezzanine layer alongside the Members Executive inside the Membership. Where they are part of the OWNERShip structure, multiple membership classes, together with multiple voting rights, may need to be devised.
In the second scenario, organisations are separate entities in their own right. A more simple membership structure can be created to accommodate this approach, which probably makes it our preferred approach.
Whilst either way is workable, the merits of one form over the other need to be determined quickly in Singapore. In either case, each organisation will need its own supporting infrastructure Including funding) and election process to determine seats on the Board.
There currently exist a number of organisations that could fulfill (with a little focus and coordination) the specific Council roles as set out in the Jon Postel documentation
MEMBERSHIP and THE BOARD
The final question to address in this part is "how should the Owners relate to the board"? Again there are two possibilities. Firstly, the membership organisation IS the New Entity. Alternately, the membership organisation is a separate legal entity, and creates and wholly OWNS the not-for-profit subsidiary (declared preference -- the New Zealand model).
Separation into two organisations may seem complex at first, but provides three clear benefits.
Firstly, it provides protection to the membership of risks arising in the New Entity, it creates a legal and commercial "firewall" that helps trap liabilities inside the entity (in our jurisdiction).
Secondly, it provides freedom for the membership organisation to re-shape and form special interest groups. This "buffer" enables changes to be accommodated easily without impact on the New Entity.
Finally, separation provides a means by which the New Entity delivers defined service to the Owners by way of contract. This should enhance the accountability of the New Entity to keep a tight focus on the requirements of the Owners.
As a quid pro quo, the service contract can return fees to the OWNERS and SUPPORTING ORGANISATIONS. This should cover costs associated with generating policy advice that the New Entity purchases.
As a final point, it makes sense for the members to appoint 2 EXTERNAL DIRECTORS as Members of the Board. Suitably qualified Directors can be found through a number of channels, including HR agencies, as well as other institutions, such as the Institute of Directors.
The final area that we considered was to envisage what the key priorities and strategies might be for the new organisation.
It is clear that the key consideration for the "transitional board" is that of stability and continuity, selection of appropriate staffing, and laying down foundations for a viable business operation.
We would endorse as short a transitional period as practically possible, as well as management of the business by way of an agreed, published, annual business plan.
We also assume that for major decisions, the OWNERS and SUPPORTING ORGANISATIONS would engage in public consultation as part of their processes.
We have tried to articulate our understanding of the process in as generic a way possible. It appears that we should be trying to create a very simple organisation here - one where the number of Board members will be considerably higher than the number of staff employed!
With this in mind, we have assembled what we believe to be a simple framework to (hopefully) point up the key issues and decision points in the governance model of this new entity.
No effort has gone into refining this further in terms of "legal boiler plate", on the assumption that when (eventually) consensus is reached upon the principles, conversion into "legal-ease" ought to be a simple drafting process.
There are still some open issues to resolve, by we hope (dearly) that in Singapore IFWP will be able to close off on those open items.
Finally, there is one very important aspect that has not yet been covered, and we believe needs to go onto the Singapore agenda -- where do we go to once IFWP reaches "consensus",
Domainz was set up be ISCOCNZ to manage the .nz domain name space in 1996. ISOCNZ is a not-for-profit society owned by its members, and holds the IANA delegation for .nz. Domainz is a limited company owned solely by ISCONZ, and created to manage the .nz country domain under a service contract to ISOCNZ.
These views are the personal observations and subsequent analysis of our experience at Geneva. We do not claim them to be "consensus" nor "comprehensive", but offer them in the hope that they make a positive contribution to what is challenging yet vital part of a process aiming to secure a more stable and scalable environment for the Internet governance as we currently understand it.
WHAT SERVICES WILL IT PROVIDE?
WHAT FUNCTIONALITY MIGHT ONE EXPECT?
WHO PERFORMS THESE ACTIVITIES CURRENTLY?
WHAT WON'T NEW ENTITY DO
ACCOUNTABILITY AND OWNERSHIP
RESPONSIBILITIES ARE BOTH UP & DOWN
DECISIONS MAKING POWERS
* BOARD -- SUPERMAJORITY
BOARD -- SIMPLE MAJORITY
OWNERSHIP - SHAREHOLDER OR MEMBER ORGANISATION?
POLICY CREATION - "SUPPORTING ORGANISATIONS" DON'T NEED TO BE OWNERS
MEMBERSHIP and the BOARD - A DIFFERENT VIEW
COMPOSITION OF BOARD
NEW ENTITY - WHAT MIGHT KEY STRATEGIES BE?
WHERE TO FROM HERE?
Meetings in Summer 1998 which culminated with the creation of ICANN.