A storm is brewing re Board elections!

[sneezycheese]

Conflict of Interest???

I'm concerned:

Gordon Dick has declared an interest in this item and signed the document on behalf of the board, but not declared a conflict of interest which surely he has as he is standing for re-election as a board candidate and surely he should have abstained from supporting and signing said document.

A situation in which a private person might benefit from his official or professional actions. It includes a conflict between his private interests or finances and his official responsibilities in his position of trust. The term is not restricted to private finances nor to only government officials. The concept refers both to actual or proven conflict of interest and the appearance or perception of conflict.

Also:

The board recommends...

do not vote for any of the three candidates that are against this resolution

...I'm not sure of the legal position, but this sits very bad with me - i.e. to say do not vote for xyz is in my mind unprofessional and shows a lack of control. Had they said we recommend you support abc because they can do 123 would have been in my mind far more constructive.

Regards,

Sneezy.

 

[Hazel Pegg]

I'm concerned:

Gordon Dick has declared an interest in this item and signed the document on behalf of the board, but not declared a conflict of interest which surely he has as he is standing for re-election as a board candidate

That'll be why the statement reads:
"1 Gordon Dick formally declared his interest in this item, as a Board election candidate."
http://www.nominet.org.uk/digitalAssets/28570_call_to_action_letter_web.pdf

and surely he should have abstained from supporting and signing said document.

Not if he is acting as a director of a company should act; that is in the best interests of the company. The fact that he is standing for re-election does not mean that he can drop the responsibilities that he currently holds as a director of Nominet.

Hazel

 

[sneezycheese]

That'll be why the statement reads:
"1 Gordon Dick formally declared his interest in this item, as a Board election candidate."

...Hazel - read what I said - "conflict of interest" not purely an "interest" - i.e. these are two separate beasts and should be dealt with accordingly.

In my opinion Gordon has a conflict of interest - i.e. he has a personal gain in the three candidates alluded to not being elected to support his own candidacy for the board and as such should have abstained from endorsing something that as a result he would potentially and reasonably expect to gain from it in the way of additional member votes for himself.

From what I'm to understand; declaring purely an 'interest' is several layers removed from what we have in this situation, where Gordon has potentially rather a lot to gain from his actions, including that of financial rewards as a board member!

Yours truly,

Sneezy.

PS: Hazel - I look forward to meeting you, Alex and other members at the AGM.

 

[bb99]

Vaguely off topic: Is it me or has the QC missed a word out in the final sentence of his paragraph 5?

"... the payment of them would render the directors of Nominet personally liable for the breach of fiduciary in misapplying Nominet's assets."

Shouldn't that be:

"... the payment of them would render the directors of Nominet personally liable for the breach of fiduciary duty in misapplying Nominet's assets"

 

[bb99]

Does anyone know if Popularis, who are the independent outfit conducting this here election, provide feedback on the current scores to Nominet? In other words do they perhaps report daily on who is winning!?

And does anyone also know if, having voted online, it's possible to change your vote in light of what the candidates say following today's call to action?

To answer my own questions, I can confirm that the answers are:

no

and

yes - see final paragraph here.

 

[sneezycheese]

Excellent Statement From Bob Fox

Am I being naïve in thinking most of the brouhaha of this election is all about money?
The candidates seem to be divided into two camps. The altruists wanting to promote the greater good of Nominet by spending their money, and the financially aware who cannot abide to see the funds that they have paid to create being used to cushion a very comfortable corporate lifestyle.

It is deplorable that having asked for statements from eligible candidates that can be circulated amongst the membership after the 15th of April for an election to be held on 30th April that they should subsequently call for additional information intimating that some candidates may, for whatever reason, be unsuitable to hold office.

http://www.nominet.org.uk/digitalAssets/28740_Robert_Fox_additional_statement.pdf

Regards,

Sneezy.

 

[researcher]

One might wish to compare the following and draw conclusions:

For Reference, Nominet’s opening sentence in their call to action:

As Nominet Board members, we have a legal duty to act in the best interests of Nominet. This extends to acting in the best interests of our membership and stakeholders as a whole.

Part of Michael Todd QC’s opinion:

The directors must be mindful of their fiduciary duties to promote the success of Nominet (section 172 Companies Act 2006).

What the Companies Act 2006 Michael Todd QC refers to actually says in its entirety at section 172:

172 Duty to promote the success of the company

(1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—
(a) the likely consequences of any decision in the long term,
(b) the interests of the company’s employees,
(c) the need to foster the company’s business relationships with suppliers,
customers and others,
(d) the impact of the company’s operations on the community and the environment,
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly as between members of the company.
(2) Where or to the extent that the purposes of the company consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes.
(3) The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company.

 

[sneezycheese]

One might wish to compare the following and draw conclusions:

For Reference, Nominet’s opening sentence in their call to action:
As Nominet Board members, we have a legal duty to act in the best interests of Nominet. This extends to acting in the best interests of our membership and stakeholders as a whole.

Part of Michael Todd QC’s opinion:
The directors must be mindful of their fiduciary duties to promote the success of Nominet (section 172 Companies Act 2006).

...So I'm guessing giving away £5,000,000 of company money to charity to 'burn off' what is seen by many members as 'unnecessary surpluses' could be conceived to be in conflict with said act - interesting!

Regards,

Simon.

 

[bb99]

So have you seen the grenade that Alex Bligh has just lobbed into Nom-Steer!?

 

[bb99]

Nom-Steer update for those not on it: Heavy artillery fire is now going in both directions......

 

[Hazel Pegg]

So have you seen the grenade that Alex Bligh has just lobbed into Nom-Steer!?

Yes. Interesting to say the least.

Hazel

 

[retired_member3]

Damn I unsubscribed this week!

 

[ibob]

Does anyone know if Popularis, who are the independent outfit conducting this here election, provide feedback on the current scores to Nominet? In other words do they perhaps report daily on who is winning!?

no

Out of curiosity, how do you know this?

 

[bb99]

Out of curiosity, how do you know this?

I asked Popularis about it and they said no. I believed them.

Also out of curiosity I asked them if they tell Nominet, either during or after the election, who voted for whom. The answer was No, but obviously if you appoint the Chairman or someone from Nominet as your proxy then they will know where your vote goes.

 

[scooter]

First off, (before I get flamed) I am not a member of Nominet so I have no voting powers.

I have been following this thread with light hearted interest and now I see it is hitting mainstream but i need someone to set the record straight.

1. Nominet is a "not for profit" organisation.
From what i'm reading they have amassed a £15 Million surplus. Is this true? That is a s*it load of money and seems to me like a s*it load of profit.

2. Why has a "not for profit" organisation been allowed to amass such a fortune? (profit)

3. Why are they only giving away £5 Million. What is to happen to the other £10 Million?

4. If the above figures are correct and it is meant to be operating as a non profit organisation, why are we being charged so much for domain registration and transfer costs when it is obvious they are charging well above what their operating costs are?

I read Robert Fox's statement highlighted above
http://www.nominet.org.uk/digitalAss..._statement.pdf

It would be nice to have domain registration costs of £3.50 I'm sure it would encourage more registrations, as long as the registrars pass on the cost reductions to the punters.

......................

I followed the above by looking on Nominets website. I have to say, from an outsider, their conduct with regards to voting stinks big time. If I am reading what i have seen on their site correctly, They are allowing people who have already voted to change their vote! Can someone confirm this?

.

 

[sneezycheese]

If I am reading what i have seen on their site correctly, They are allowing people who have already voted to change their vote! Can someone confirm this?
.

...That is correct, people are being allowed to change thier vote - I am guessing the reason being so that those influenced by the letter from Nominets Board can change their minds and not vote for the candidates mentioned as per the letter.

Like you say - very smelly indeed - I think I might need a gas mask when attending the AGM next week - can anyone suggest a good supplier?

Regards,

Sneezy.

 

[Edwin]

Just because a company is not for profit doesn't mean that it can't make money! It just means that it can't make a "profit" as defined by accounting rules. Not sure off hand what all those rules include, but basically stuff like redistributing part of profits to shareholders, aiming to maximise income, that kind of thing. You can read through this for example...
http://www.answers.com/topic/nonprofit?cat=biz-fin

But of course even a non-profit firm has to make a "surplus" in the sense that if they weren't breaking even then how would they continue to operate? And the non-profit may want to hang onto a bit of that surplus as a buffer against future contingencies - after all, it's impossible to earn and spend EXACTLY the same amounts all the time, but it's unlikely a non-profit would want, or get, a loan - then that also makes perfect, prudent sense.

So they can keep some money to do things with; in fact they MUST keep some money to do things with, since the traditional ways a company raises funds are closed to them because of their non-profit status.

And for a large company with a responsibility as important as Nominet's (keeping the entire .co.uk web ticking over, you might say) it therefore makes a ton of sense for them to err on the side of caution and build up a bit of a surplus cushion i.e. they comfortably do more than break even on the money we're all paying to register domains, so that they're ready for the bad times and the unexpected bills...

It's also a mistake to think that individuals can't benefit from a non-profit. For instance it's entitled to employ people who draw salaries. But it's not allowed to tie their salaries (or give bonuses) to how much money the company's making over and above the break-even point.

So a CEO of a regular company might get a big fat bonus for helping to make a big profit. The director of a non-profit won't (typically) get even a penny extra for increasing the surplus made by the company. But the latter will still be responsible for ensuring that the company breaks even and makes a commercially prudent surplus so that it can carry on its responsibilities going forward.

Oh, and "non profit" doesn't automatically mean "charity". A charity is a special kind of non profit where most of the surplus made (through fund raising, business operations etc.) is distributed to a SPECIFIC cause or causes (help fund AIDS research, plant trees, develop water infrastructure in Africa, that kind of thing). Nominet isn't a charity!

 

[Hazel Pegg]

...That is correct, people are being allowed to change thier vote

People have always been able to change their vote. The simple act of turning up in person at the AGM over-rides any previous vote if the member so wishes. All that is happenning here is a slight shift into the 21stC.

Popularis are running the election and it has been stated that you can't vote both electronically and by postal vote or both votes will be discounted. I disagree with this and think that the last vote recorded should be the one counted. But I'm not running the election

Hazel

 

[scooter]

Just because a company is not for profit doesn't mean that it can't make money! It just means that it can't make a "profit" as defined by accounting rules.

I appreciate what you are saying and I agree they have to have some money in the bank, but surely not £15 Million!

Surely a surplus of £3 million would still be a healthy surplus? Have they not recently moved into new headquarters that were paid for by cash? So the surplus must have been considerably more and I would think a company that owns their own new HQ could comfortably operate with a surplus of £3 Million.

I have to say, it makes me a little bit angry that I'm paying too much for my domains. (I have to be, otherwise they would not be sitting on a pile of £15 million!)

Now I read they are to give £5 million away to charity. Well, that's my money they are giving away to charity. When i want to give to charity, i stick a few coins in the collection box at the side of retail counters.

Charity begins at home and I would like to see the price of my domain names come down.

.

 

[Edwin]

I appreciate what you are saying and I agree they have to have some money in the bank, but surely not £15 Million!

Surely a surplus of £3 million would still be a healthy surplus? Have they not recently moved into new headquarters that were paid for by cash? So the surplus must have been considerably more and I would think a company that owns their own new HQ could comfortably operate with a surplus of £3 Million.

I don't want to split hairs too far on amounts, but just to point out that what may sound like a lot of money to you or me isn't necessarily very much when seen from the perspective of a company. The £15 Million was accumulated over a number of years - it's not the surplus from a single year's trading - and it's only about the same as one year's income for Nominet. A few unforeseen events that happen to occur together (like a major lawsuit naming Nominet as the defendant, or significant changes in the law that require a rethink of the basic Domain Name Agreement for instance) would make significant inroads into that kind of cushion.

Where I do agree with you is on the charity aspect - while it's laudable that Nominet's trying to do "good" with their money, AFAIK they weren't set up as a charity and so it's a bit weird they're trying to behave like one. When you give money to a charity, you know it's going to be spent on "good causes" up front, but when I pay my domain renewal fees I don't think "and it's great they'll also be doing good". So perhaps at least that part of the decision might be better rethought.