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•15 October 2014

Independence of Directors – Presentation to Nominating CommitteeJohn Jeffrey, General Counsel and SecretaryOctober 17, 2014

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ICANN’s Corporate Structure

•What is a Director’s responsibility?

•Directors are responsible for the direction of this specific entity created under a legal framework.

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ICANN’s Corporate Structure

•Public Benefit - Non-Profit – Corporation - which is very similar in nature to the concept of a “Public Trust”

•Availing itself of state and federal laws for entities in California, USA

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Board Fiduciary Duties

•A Director shall perform his/her duties :

•a) in good faith,

•b) in the best interests of the organization and

•c) with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.

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Five Legal Standards

Director’s legal standard is generally understood to embrace four duties:

(a) Care,

(b) Inquiry,

(c) Loyalty, and,

(d) Prudent investment.

Also, Directors have an affirmative personal obligation to avoid conflicts of interest.

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Duty of Care

The seriousness which each Director brings to his or her responsibilities such as gaining and maintaining familiarity with:

(a) The business objectives of the organization,

(b) important business considerations, and

(c) relevant industry information.

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Duty of Inquiry

Take steps necessary:

a) to be sufficiently informed to make decisions on behalf of the organization, and

b) to participate in the Board of Directors’ activities.

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Duty of Loyalty

Generally involving the protection of the organization’s interests in the following areas:

(a) business, properties, assets, employees and legal rights

(b)avoiding of conflicts of interest or self-dealing, and

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Duty of Loyalty (continued)

(c) serving the interests of the organization

(d) not the interests of any other person or group

(e) not the interests of a constituency of the organization (SO or AC) which caused the Director to be selected

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Duty of Prudent Investment

When acting in the management of the organization’s investments:

•to avoid speculation, and

•to comply with any applicable standards in the organization’s Articles, Bylaws.

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Conflicts of Interest

•The ICANN Bylaws require a conflicts of interest policy applicable to the Board of Directors.

•The basic elements of that policy have been elaborated in the Conflicts of Interest Policy.

•The Conflicts of Interest Policy is at https://www.icann.org/en/groups/board/governance/coi

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Confidentiality

•Directors receive confidential information including (but not limited to):

•personnel information,

•attorney-client and privileged information

•and business information from contracting parties.

•Where possible, such information will be marked “confidential” – but not always.

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Confidentiality (continued)

•Directors apply judgment to any materials or information received in Board role.

•Directors have a affirmative legal and ethical obligation to maintain confidentiality for this information.