(Revised) Proposed Corrections to Bylaws
(31 May 2003)

(Revised) Proposed Corrections to Bylaws
31 May 2003

To the Board:

On 11 May 2003, I proposed a set of revisions to the New Bylaws that went into effect on 15 December 2002 to correct various technical flaws that have come to light since the last set of corrections became effective on 25 March 2003. In each case, the revision is intended to correct an inconsistency or inadvertent omission.

In my 11 May 2003 proposal, I requested that members of the Board and community send me any comments they had concerning my proposal. I received the following comments:

1. Philip Sheppard wrote on 12 May 2003 that the GNSO Council, at its meeting on 22 May 2003, would likely adopt a resolution requesting a change to the New Bylaws concerning the GNSO Council's quorum rules. He suggested that such an amendment could be added to the group of amendments to be considered by the Board at its 2 June 2003 meeting. In fact, the GNSO Council did not consider the proposed resolution at its 22 May 2003 meeting due to the overcrowded agenda for that meeting. (It appears likely that the GNSO Council will meet on 5 June 2003 to complete the agenda of its 22 May 2003 meeting.)

The proposal referenced by Mr. Sheppard would amend Article X, Section 3(8) of the New Bylaws. Currently there are 18 members on the GNSO Council, consisting of 6 members from "providers constituencies" and 12 members from "users constituencies." Votes are equalized, so the two groups of constituencies each have 12 votes, for a total of 24. Under the quorum provision in Section 3(8) as currently written, the GNSO Council can act when members entitled to cast a majority of the total number of votes on the Council (i.e. 13 votes) are present. The proposal would require that, in order to transact business, the GNSO Council would need both a majority of votes (i.e. 13 votes) and a majority of members (i.e. 10 members) present. Thus, under the proposal the non-attendance of nine members, having as few as 37.5% of the votes on the GNSO Council, would prevent the GNSO Council from acting.

The proposal is a substantive change from the intended effect of equalized voting, rather than a technical correction consistent with the intended effect of the Bylaws. As such, it would appear more appropriate to address the proposal as part of the process for periodic review of ICANN structure and operations under Article IV, Section 4. Under that Section, the first periodic review will be initiated within one year following the adoption of the New Bylaws and will cover the GNSO Council. Among the topics to be considered in that review should be the equalized voting concept and its implications.

2. A few comments and questions (including one from Linda Wilson) were received regarding the proposed revision to Article XIV, which concerns indemnification of ICANN's agents. To some extent, the comments reflected confusion regarding principles of indemnity, which is inherently a somewhat complex topic requiring knowledge of specialized legal matters to fully understand. However, the comments did rightly point out that the phrasing proposed in my 11 May proposal should be revised to more clearly indicate that it is the indemnified person that must reasonably believe the indemnified acts to be in ICANN's best interests and not criminal. The proposed language below has been revised accordingly.

3. In reviewing the comments, I noticed a terminology error in Article IV, Section 4 (which refers to the "GNSO Names Council") and a similar terminology error in Article X, Section 5(2) (which refers to the "Names Council"). Both references should be to the "GNSO Council." Corrections are proposed below.

4. One comment was received stating that "it is time a statement was added to the bylaws allowing those with domain names to contact ICANN for arbitration, rather than just the trademark owner." This comment appears to relate to a matter appropriately dealt with through the development of policy, rather than a change to the bylaws.

In view of paragraphs 2 and 3 above, I have slightly modified the revisions I proposed to Article IV, Section 4 and to Article XIV, and I have added a proposal to amend Article X, Section 5(2). I therefore submit the resulting revised proposals for bylaws corrections shown below for the Board's consideration at its 2 June 2003 meeting. Deleted text is shown in strikeout type and in red; added text is underlined and in magenta.

Respectfully submitted,

Louis Touton
General Counsel

ARTICLE IV: ACCOUNTABILITY AND REVIEW, Section 4. PERIODIC REVIEW OF ICANN STRUCTURE AND OPERATIONS

The Board shall cause a periodic review, if feasible no less frequently than every three years, of the performance and operation of each Supporting Organization, Supporting Organization Council, Advisory Committee (other than the Governmental Advisory Committee) and Nominating Committee by an entity or entities independent of the organization under review. The goal of the review, to be undertaken pursuant to such criteria and standards as the Board shall direct, shall be to determine (i) whether that organization has a continuing purpose in the ICANN structure, and (ii) if so, whether any change in structure or operations is desirable to improve its effectiveness. The results of such reviews shall be posted on the Website for public review and comment, and shall be considered by the Board no later than the second scheduled meeting of the Board after such results have been posted for 30 days. The consideration by the Board includes the ability to revise the structure or operation of the parts of ICANN being reviewed by a two-thirds vote of all members of the Board. The first such reviews, to be initiated within one year following the adoption of these Bylaws, shall be of the GNSO Names Council and the ICANN Root Server System Advisory Committee. The Governmental Advisory Committee shall provide its own review mechanisms.

[Explanation: Article IV, Section 4 was a significant innovation in the New Bylaws, recognizing that (in the Evolution and Reform Committee's words), "an organization like ICANN, dealing with a medium as rapidly changing as the Internet, must be willing and able to change as required by future events." Thus, Article IV, Section 4 establishes "a requirement for periodic review of all elements of ICANN, to ensure that bureaucratic inertia does not set in . . . ."

This staggered review of all of ICANN's structures was intended to lead to structural and operational improvements based on the review. This ultimate outcome of the review is not clearly stated in the language, and some ambiguities have arisen as to how changes will be effected. To clarify matters, an additional sentence is proposed to ensure that all the independently reviewed parts of ICANN will be subject to revisions in their structure and operation by a two-thirds vote of all members of the Board. This is the vote required by Article XIX for amendments to the bylaws.

The proposed deletion of "Names" in the last sentence is to correct a terminology error. No change in substantive meaning is intended.]

ARTICLE VII: NOMINATING COMMITTEE, Section 8. INELIGIBILITY FOR SELECTION BY NOMINATING COMMITTEE

No person who serves on the Nominating Committee in any capacity shall be eligible for selection by any means to any position on the Board or any other ICANN body having one or more membership positions that the Nominating Committee is responsible for filling, until the conclusion of an ICANN annual meeting that coincides with, or is after, the conclusion of that person's service on the Nominating Committee.

[Explanation: The addition to the title of Article VII, Section 8 is proposed to distinguish it from Article VII, Section 9, below.]

ARTICLE VII: NOMINATING COMMITTEE, Section 9. INELIGIBILITY FOR SERVICE ON NOMINATING COMMITTEE

No person who is an employee of or paid consultant to ICANN (including the Ombudsman) shall simultaneously serve in any of the Nominating Committee positions described in Section 2 of this Article.

[Explanation: The New Bylaws contain no restriction on ICANN employees and paid consultants serving on the Nominating Committee. Because these roles are inconsistent with the independent operation of the Nominating Committee, an express prohibition should be included.]

ARTICLE X: GENERIC NAMES SUPPORTING ORGANIZATION, Section 3. GNSO COUNCIL

1. Subject to the provisions of the Transition Article of these Bylaws, the GNSO Council shall consist of two representatives selected by each of the Constituencies described in Section 5 of this Article, and three persons selected by the ICANN Nominating Committee. No two representatives selected by a Constituency shall be citizens of the same country or of countries located in the same Geographic Region. There may also be two liaisons to the GNSO Council, one appointed by each of the Governmental Advisory Committee and the At-Large Advisory Committee from time to time, who shall not be members of or entitled to vote on the GNSO Council, but otherwise shall be entitled to participate on equal footing with members of the GNSO Council.

[Remaining paragraphs unchanged]

[Explanation: Article VI-B, Section 3(c), of the Old Bylaws provided that no two of a constituency's representatives on the DNSO Names Council could be from the same ICANN Geographic Region. Due to an oversight, that geographic diversity requirement was not carried over to the GNSO Council. Consistent with Core Value 4 ("Seeking and supporting broad, informed participation reflecting the functional, geographic, and cultural diversity of the Internet at all levels of policy development and decision-making."), the proposed sentence restores the requirement. Geographic diversity in the Nominating Committee's selections to the GNSO Council is required by Article VII, Section 5, of the New Bylaws.]

ARTICLE X: GENERIC NAMES SUPPORTING ORGANIZATION, Section 5. CONSTITUENCIES

2. The number of votes that members of the GNSO Council may cast shall be equalized so that the aggregate number of votes of representatives selected by the Constituencies (currently the gTLD Registries and Registrars) that are under contract with ICANN obligating them to implement ICANN-adopted policies is equal to the number of votes of representatives selected by other Constituencies. Initially, each member of the GNSO Council selected by the gTLD Registries Constituency or the Registrars Constituency shall be entitled to cast two votes and all other members (including those selected by the Nominating Committee) shall be entitled to cast one vote. In the event that there is a change in the Constituencies that are entitled to select voting members of the GNSO Names Council, the Board shall review the change in circumstances and by resolution revise the procedure for equalization of votes in a manner consistent with this paragraph 2.

[Explanation: Under the New Bylaws, the council of the GNSO is properly designated the "GNSO Council", not the "Names Council". The above proposal therefore corrects the terminology in Article X, Section 5(2).]

ARTICLE XI: ADVISORY COMMITTEES, Section 2. SPECIFIC ADVISORY COMMITTEES

There shall be at least the following Advisory Committees:

1. Governmental Advisory Committee

f. The Governmental Advisory Committee shall annually appoint one non-voting liaison to the ICANN Board of Directors, without limitation on reappointment, and shall annually appoint one non-voting liaison delegate to the ICANN Nominating Committee.

[Explanation: As stated in Article VII, Section 2(5), of the New Bylaws, the Governmental Advisory Committee has a non-voting liaison, rather than a voting delegate, on the Nominating Committee. The above revision to Article XI, Section 2, corrects an inconsistency.]

ARTICLE XIV: INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS

ICANN shall, to maximum extent permitted by the CNPBCL, indemnify each of its agents against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that any such person is or was an agent of ICANN, provided that the indemnified person's acts were done in good faith and in a manner that the indemnified person reasonably believed to be in ICANN's best interests and not criminal. For purposes of this Article, an "agent" of ICANN includes any person who is or was a Director, Officer, employee, or any other agent of ICANN, (including a member of any Supporting Organization, any Advisory Committee, the Nominating Committee, any other ICANN committee, or the Technical Liaison Group) acting within the scope of his or her responsibility and on behalf of the best interests of ICANN; or is or was serving at the request of ICANN as a Director, Officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise. The Board may adopt a resolution authorizing the purchase and maintenance of insurance on behalf of any agent of ICANN against any liability asserted against or incurred by the agent in such capacity or arising out of the agent's status as such, whether or not ICANN would have the power to indemnify the agent against that liability under the provisions of this Article.

[Explanation: Under the New Bylaws, ICANN is constituted of many different types of bodies. The proposed revisions make clear that persons acting within the scope of their responsibilities on those bodies should be indemnified provided they act in good faith and in a manner reasonably believed to be in ICANN's interests and not criminal.]

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