M. Stuart Lynn writes: Karl is free to examine ICANN records any time he is ready to comply with established procedures that apply to him and any other Director -- in
complete accordance with California law. Mr. Lynn seems to have blithely sailed past the point. Mr. Auerbach has already referenced California corporations code 6334, which states in part: Every director shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind.... No established procedures of ICANN, whether enacted by staff, or by Board resolution (which doesn't exist in any case), can apply to a Director with greater force and effect than the right and responsibility of a Director to do his fiduciary duty under California law. Surely California law trumps ICANN's internal procedures, no matter how they are arrived at. If there is some California law that has greater force than 6334, that modifies it in some relevant fashion to support Mr. Lynn's statement, then it is up to Mr. Lynn to reference it. He hasn't. Karl is not being singled out. It is cold comfort that all Directors can look forward to an equally high stone wall. Among other reasonable provisions, these procedures are designed to protect confidential records, such as personnel files. Reading between the lines here, perhaps there is California law regarding the privacy of personnel files, and perhaps Mr. Lynn is making the case that it overrides 6334. If there is such legislation or existing case law, again Mr. Lynn should reference it. If there isn't, perhaps there could be, and one could see that trying to do so could amount to a lot of money. Assuming I've misread Mr. Lynn's rather scant reply, it isn't impossible to imagine that ICANN is in possession of documents that properly shouldn't see the light of day, they are in contractual situations with entities which exist in a competitive environment. Perhaps staff are aware of some proprietary information, perhaps staff have even been required to sign non-disclosure agreements. Again, without references being supplied to the contrary, one is left to assume that 6334 still fully applies. Regardless, Mr. Auerbach has already made clear that he understands his fiduciary responsibilities as a Director. Were he to improperly publish personnel files or other hitherto private information of entities in a contractual arrangement with ICANN he would in all likelyhood face some form of legal action, either through existing legislation or by an injured party or both. First, he is already on public record of saying he has no intent to do so. Mr. Lynn gives no explanation why Mr. Auerbach should not be taken at his word. Second, it is hard to believe that Mr. Auerbach would be so foolish as to put himself in such a position. Mr. Lynn gives no explanation why he thinks not just Mr. Auerbach's honesty but his sanity are in question. Third, that an employee would tell his employer that he must ignore the existing 6334, ignore his existing fiduciary duty, ignore existing California law, because he potentially could act inappropriately at some point in the future is bizarre in the extreme. Karl wishes to set himself above the direct or delegated authority of the ICANN Board of Directors, in declaring himself as the sole determinant of what is confidential and what is not. That is not his prerogative according to California law or ICANN bylaws. Again, this is very short on specifics. Which California law Mr. Lynn? Which ICANN bylaws? And where is there any evidence given by Mr. Lynn that Karl wishes to set himself above the authority of the BoD? He is following 6334 as he has the right, and indeed the responsibility, to do, as do all members of the BoD, though BoD members resident in California (of which Karl is one) presumably must be particularily careful to act appropriately. It is absolutely within each Director's prerogative to decide what is confidential and what is not, barring specific resolutions or bylaws giving further direction, which don't exist. If the decision is the wrong one it is up to California law to deal with it after the fact, not up to staff to prejudge the competence or motives of their employers. This is so wacky I can't believe it even needs to be pointed out. As to the delegated authority, I assume that is in reference to... The procedures to which he objects were endorsed by the Audit Committee of the ICANN Board, to whom the Board has delegated responsibility for this general area. Perhaps Mr. Lynn would again be so kind as to provide a reference. The Audit Committee of the Board seems to have no such authority, either in the resolution creating it, or in its charter. Even if it did, the Directors cannot delegate authority in such a way that it removes the responsibility to act according to 6334, even the Directors as a whole cannot pass a resolution that removes the responsibility to act according to 6334, and if the external auditors have ever made such a recommendation or supported such an endorsement they should be fired and reported to any relevant authorities immediately. From my own experience in analogous situations, truly external (that is, independent) auditors consistently push for quite the opposite if it doesn't already exist. Directors are meant to direct, they cannot do so if they are not in full possession of all relevant facts. He is always welcome to take his objections to the full Board should he wish. So far, he has not chosen to do so. This sounds like a challenge made with the foreknowledge that it will go nowhere. I certainly hope not. If other Directors aren't now fully aware of their rights and responsibilities under 6334, they had better get up to speed quickly as they are leaving themselves open to being responsible for matters they know nothing about, and apparently at present they are not allowed to know. Claiming that they were just following orders (of their own employees, no less!) doesn't make for much of a legal shield. While bringing this matter to the attention of the Board might be helpful, and while Karl may actually have the fiduciary duty to do so, it still seems to me that it would be relatively quick and painless (financially) to ask a California judge to rule that the staff make all records available without delay due to 6334. I remain baffled why Mr. Auerbach does not do so. Perhaps he is acting in a fashion that he considers proper procedurally, and perhaps he is correct, but this is a public matter now and the corporation stands to be harmed by the revelation that its Board of Directors cannot access their own records. Would you sign a contract with ICANN knowing that? Who would oppose such a legal action to get at the root of this? Surely the Board is aware that passing a resolution saying that they would cover the legal costs of the staff (using Jones Day perhaps?) to fight it, whilst denying one of their own Directors equal support to get a ruling one way or the other would be a public relations disaster. That is assuming Mr. Lynn or others are more forthcoming about what, if anything, they think overrides 6334. Without that they really don't have a leg to stand on. -g
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