Guest post by Paul Andersen: Results of CIRA’s Outreach on Governance

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In this post, Paul Andersen, Chair of the CIRA Board of Directors, discusses the findings of the recent outreach on changes to CIRA’s governance structure and processes.

If you’re a regular reader of this blog or you follow CIRA’s activities, you’ll know that we recently held an outreach with our .CA Members regarding proposed changes to our governance. The organization has been looking on and off at a major overhaul to our governance structure over the past few years. After all, the last time significant changes were made to CIRA’s bylaws was in 2006. Recently, changes to the legislation that governs not-for-profits like CIRA require CIRA to make changes to its bylaws.  This resulted in us revisiting this topic.

Since there are a number of changes to the by-laws that are a result of the new legislation, as the Board we decided that it was time to review the organization’s governance processes and structures as a whole. We set out to fix what we saw as a heavily burdensome election process and improve efficiencies at the Board level. CIRA spends a disproportionate amount of time running an annual election process. In fact, the current process consumes the better part of a year. There are other issues with the current Board and elections process:

- The current size of the Board was established over a decade ago when there was little by way of staff and resources. As I stated in my last guest post on this blog, CIRA has evolved, and in response the Board’s role has changed from a heavily operational role to a much more strategic one. A smaller, leaner board would be more efficient.

- There have been no term limits for Directors. To ensure a diversity of voices on the Board, we had proposed term limits.

- The current election process has a complicated split ballot system. The Board and the organization agree that this system has created a large number of issues. A number of concerned Members have spoken to me about how complicated – and therefore unappealing – the current election process is. First, there appears to be a misunderstanding among .CA Members that since there are two classes of directors – one elected through the Member slate and one through the nomination committee slate that a director elected through the Member slate should somehow represent the community that elected them. (Fact is, all directors, regardless of how they are elected, must always act in the best interest of the organization, not any particular stakeholder group.

These issues have resulted in several – I’ll call them unorthrodox – processes, such as the show of support stage and two nomination stages. These processes serve to lengthen and complicate the election, confusing many trying to run. The majority of our current Board agree that more of the resources spent on the election should be put toward running .CA, and that the process should be one that attracts the best candidates to fill any gaps on the Board.

From April 2 to May 2 this year, we engaged .CA Members in a dialogue about the proposed changes. From the beginning, we wanted this to be an open and transparent process. .CA Members are one of CIRA’s key stakeholders, and we wanted to hear from them on the proposed changes to our governance processes and structures.

On behalf of the Board, I would like to thank the .CA Members who participated in the outreach for sharing their views – hearing from Members on such matters is important. We take this feedback very seriously, and the fact is, we didn’t set out on this process to confirm our proposal. Rather, we consulted with Canadians to ensure that the changes that we move ahead with are right for CIRA and the Canadian Internet community.

The Board believes the proposed changes are in the best interest of .CA. If we didn’t we would not have proposed them. So as a Board, we now find ourselves in a bit of a conundrum.

Based on the amount of feedback received and after reviewing as a group the proposal, the Board is not comfortable moving ahead with the proposed changes that were not necessary to transition to the new legislation. While we did our best to promote the feedback process through emails to .CA Members, social media and other means, we only received 28 responses. We currently have more than 15,000 .CA Members. Are the 28 submissions representative of the entire .CA Membership? We don’t know, and for that reason, it is very difficult for us to move forward either way. Fact is, CIRA has never had attendance at an Annual General Meeting of less than 100. In fact, at the February 2006 Special Members Meeting (the last time by-law changes were discussed), there were more than 500 people involved in the discussion.

What went wrong here? I am first to admit we have, over the past decade, struggled with Membership engagement. For that reason, the organization has invested countless resources over the past four years, including hiring a Communications Manager responsible for Membership engagement and developing new tools for reaching out to Members. While we have seen a significant increase in Membership engagement, our community engagement (for example, the Canadian Internet Forum and the.CA Impact Awards) has met with enthusiastic response. Is the fact that we received minimal response for an issue as important as changes to our governance structure and process is an indication that we have much work to do? Is it a matter that while governance is important to us, it might not be for our membership? Or should we understand the silence on behalf of .CA Members as consent? These are the questions we are grappling with.

The working group within the Board tasked with governance changes – and ultimately the entire Board of Directors – spent countless hours struggling with the feedback. It is not a large enough sample for us to understand how representative it is of the Canadian Internet community. Nevertheless we received it and we take it very seriously.

The majority of responses received was in opposition of the removal of the Members’ slate of candidates or expressed a level of distrust of the Nomination Committee. There was also some concern expressed about the proposed reduction in the size of the Board of Directors.

I’d like to take this opportunity to discuss the feedback.

We proposed a single slate of candidates for the Board election through a nomination committee. Why? Because the split ballot process (Member and Nomination Committee slates) is both confusing and time consuming. Anecdotal feedback indicated that we were potentially turning people away who didn’t want to participate in such a confusing process. While CIRA has had a nominating committee for many years, it had been criticized for not being transparent enough. The Board has recognized some of the concerns for some time now. While we are deeply proud of the output of this group, we understand it can look a little bit like electing the pope (everyone goes in, puff of smoke, output).

Not the best process when you are trying to convey a commitment to transparency.

The feedback we received indicated a high level of concern – I would go so far as to say distrust – greatly expressed over the Nomination Committee as an “insiders club” and a tool for Board “self-perpetuation.” Fact is, this has never been a reality under current mechanism. We now clearly understand that any future review needs to better address how the Nomination Committee is selected.

We proposed a variety of mechanisms that would improve transparency and accountability to the stakeholders of CIRA, and truly believed that they would add value to the current system. You can view the proposal here.

A nomination committee is not only common practice, but is considered by many to be a best practice in the realm of corporate governance. CIRA has gone through efforts to ensure that there is a great deal of independence in how the Nomination Committee operates, and the reality is that the Board needs a diversity of various skills and stakeholders to be effective. The beauty of the Internet, and of global Internet governance, is that ALL stakeholders have an equal voice. It is the diversity of voices making decisions about the development of the Internet that have enabled it to become the incredible success it is. As a Professional Engineer, I feel free to say that CIRA’s Board needs a balance of voices, and not an abundance of engineers. These voices could include policy, marketing, engineering, finance, and end user voices, among others. And while no governance system is perfect, it is the nomination committee process that attempts to ensure this delicate balance.

That said, here’s what we are doing.

Given the feedback received and the continued Membership engagement, the Board has decided to move ahead with only the changes the changes we believe are essential to transition to the new legislation governing not-for-profits. Accordingly, at the Annual General Meeting (AGM) this fall we will only be asking .CA Members to approve those changes required to our bylaws so that we can transition to the new Act – the changes can be viewed here.  Given the importance of governance to an organization, and the short time frames before our AGM this fall, we felt it important not to proceed at this time with major governance changes without further review and outreach.

The domain industry is changing and CIRA needs to ensure .CA is well positioned to succeed in the new competitive landscape. While I believe an improved governance structure is important, I think the CIRA Board needs to take some time to learn from this experience, and to possibly look at alternate ways to engage with .CA Members. The Board will also need to engage in a broad discussion of what membership means. We cannot continue to seek feedback in which we only hear from 0.1 per cent of our Members.

I look forward to working with CIRA’s membership to implement these legislated changes.

Thanks to those who provided feedback, and thanks to all .CA Members for your interest in building a stronger Internet.

Paul Andersen, P.Eng.

Chairperson, Board of Directors

 

 

 

 

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  • http://votermedia.blogspot.ca Mark Latham

    Thank you Paul (and the whole CIRA Board) for seeking and responding positively to member feedback on this important issue of director nominations. I agree that member engagement is difficult and complex, and that we need to find better ways for CIRA to connect with more members. I will continue to blog about CIRA governance at http://votermedia.blogspot.ca/search/label/CIRA

  • http://votermedia.blogspot.ca Mark Latham

    Section 163 of the new Canada Not-for-profit Corporations Act provides for a member to submit a proposal to be included in the notice of an annual meeting of members. But I can’t find any such provision in CIRA’s proposed new bylaws.

    Am I missing something? Is there a reason for this omission? Can a CIRA member submit a proposal to be included in the notice of an annual meeting of members?

  • http://votermedia.blogspot.ca Mark Latham

    You explain in your post that “this fall we will only be asking .CA Members to approve those changes required to our bylaws so that we can transition to the new Act”. Likewise on the CIRA website here and here, it says “CIRA has decided to proceed only with the changes necessary to transition to the new legislation.”

    However, you are proposing a bylaw change that is not required by the new legislation: giving the CIRA board power to expel members from CIRA.

    Page 26 of the black-line pdf showing your proposed bylaw changes shows the existing bylaw 11.04:

    Removal: Any Member may be required to resign as a Member of the Corporation by a vote of two-thirds (2/3) of the Members…”

    You are proposing to replace this with new bylaw 12.05:

    Expulsion
    (a) The Members or the Directors may, by Special Resolution passed at a special meeting of Members or meeting of Directors, as the case may be, expel a Member of the Corporation…”

    On this issue, section 158 of the new legislation says:

    “The articles or by-laws may provide that the directors, the members or any committee of directors or members of a corporation have power to discipline a member or to terminate their membership…”

    Notice that is says “may provide” — i.e. this is allowed but not required by the legislation. You are telling us members that it is required, and asking us to vote for it, but actually it is not required.

    Could you please explain and/or resolve this apparent discrepancy?

    [Comment date: 2012-08-11]

  • http://votermedia.blogspot.ca/search/label/CIRA Mark Latham

    Wouldn’t your proposed by-law 17.01 empower the board to change the rules for director nominations, and have those changes take effect before the members have a chance to vote on the changes? For example, wouldn’t it let the board eliminate the members’ slate for the 2013 election?

    Here’s the proposed by-law 17.01 from the black-line pdf:

    17.01 By-law Amendments
    (a)
    Except in respect of matters referred to in section 197(1) of the Act, which require a Special Resolution of Members, the Board may, by ordinary resolution, make, amend or repeal any By-laws that regulate the activities or affairs of the Corporation.
    (b) Any such by-law, amendment or repeal shall be effective from the date of the resolution of Directors until the next meeting of Members where it may be confirmed, rejected or amended by the Members by ordinary resolution. If the By-law, amendment or repeal is confirmed or confirmed as amended by the Members it remains effective in the form in which it was confirmed. The By-law, amendment or repeal ceases to have effect if it is not submitted to the Members at the next meeting of Members or if it is rejected by the Members at the meeting.

    Section 197(1) of the Act rules out a few fundamental changes, but the director nomination rules are not included there, so could be changed by the directors, as could most other by-laws, right?

    Since the Act Section 152(1) allows the by-laws to provide otherwise, wouldn’t the following alternative draft by-law also satisfy the Act?:

    17.01 By-law Amendments
    By-laws may only be made, amended or repealed by the Members by ordinary resolution.

  • http://www.kevinforcira.ca Kevin McArthur

    Paul, just wanted to say great post. I’m thrilled to see that CIRA will be retaining the members slate and that the board is willing to engage with members, even if the sample size is small. I took the time to review the new by-laws and everything looks really good. The board has my thanks for taking my comments on governance into consideration and I look forward the coming election.

    Props!

  • http://votermedia.blogspot.ca/search/label/CIRA Mark Latham

    It’s been over 2 weeks since I posted the comments and questions above. We CIRA members will be voting on the proposed bylaw changes Sept 19 – 26, right? Please reply soon, so that we can continue a discussion to help us decide whether to approve these changes.

    [Comment date: 2012-08-30]

  • Byron Holland

    Hi Mark:

    In response to your first question (about Section 163 of the new Canada not-for-profit Corporations Act), the by-laws don’t need to (and shouldn’t) include each and every provisions contained in the Act. Section 183 applies to all corporations under the Act. As a result, a CIRA member can submit a proposal, provided they follow the requirements of the Act.

    With regard to your second question, you are correct in saying that the Act, strictly speaking, is permissive in section 158 (the section you refer to). What we were trying to convey was that we’re not implementing all the other governance proposals that were floated back in April, which were cause for concern of some .CA Members. CIRA never meant to suggest that we wouldn’t implement sections of the legislation that were permissive, but made sense and were recommended by subject matter experts, as was the case here.

    You also asked: Wouldn’t your proposed by-law 17.01 empower the board to change the rules for director nominations, and have those changes take effect before the members have a chance to vote on the changes? The short answer is ‘no’. The Act is very careful to ensure that special rules, including much higher approval levels, are required for any and all fundamental changes that could affect CIRA or its members. Section 197(1)(f) of the Act would seem to apply to your scenario: “change the designation of any class or group of members or add, change or remove any rights and conditions of any such class or group.”

    Finally, with regard to your question about Section 152(1) and your proposed by-law text, your proposed wording would actually violate the Act. As I noted above, you cannot make any sort of bylaw change merely by an ordinary resolution. The Act is very careful that any bylaw amendment that represents a fundamental change (i.e. all of those listed in Section 197(1)), require a special resolution of Members . In other words, a supermajority of two thirds (not just a simple majority) of the votes cast on that resolution. Section 17.01, as drafted, will not allow the Board to make any fundamental changes without a super-majority of Members approving them, in advance.

    More generally, any number of alternative wordings to any particular provision or sentence could perhaps theoretically work, but we’re asking .CA Members to review and approve the ones presented. They were developed by subject matter experts, following a lot of time and focus, and were then unanimously approved by the Board following careful review.

    I hope this helps to clear things up.

  • http://votermedia.blogspot.ca/search/label/CIRA Mark Latham

    Thank you Byron for your informative reply above. Overall I think I now understand these points reasonably well, and am satisfied with your responses.

    However, I would suggest that CIRA correct the wording of the website text passages I referred to in the first paragraph of comment 3 above, which say that the changes you are proposing are required or necessary. Permissive does not mean required or necessary, so those text passages are not true. Some CIRA members might be persuaded to approve changes, thinking that they were required by the legislation, when in fact they are permitted but not required.

    Even if CIRA never meant to suggest that all the changes are required or necessary, CIRA is still saying all the changes are required and necessary, which is false.

    [Comment date: 2012-08-31]

  • http://votermedia.blogspot.ca/search/label/CIRA Mark Latham

    Paul, Byron –

    Could you please explain why CIRA is continuing to make false statements to CIRA members, more than 10 days after you admitted that the changes you are proposing are permissive, i.e. permitted, not necessary or required? The three quotes I referred to in my comment 3 above are still saying that all the changes are necessary and required.

    Thanks…

    [Comment date: 2012-09-10]

  • Byron Holland

    Hi, Mark,

    Thank you for your comment. This is an important discussion, and I appreciate your interest in CIRA and our governance.

    I feel it is important to say that we did not develop the proposed changes to our by-laws without extensive research, nor did we develop them in a vacuum. The Board of Directors has been discussing changes to CIRA’s governance for several years. Since it became apparent that CIRA would have to make changes to its governance structures and processes to transition to the new legislation, we undertook a comprehensive review of the literature. We have also engaged experts in the field to help us develop the proposed changes. As you know, we reached out to CIRA’s members to understand their thoughts about changes to our by-laws. And, we modified the proposal to reflect the feedback we received from our membership. The process has been both transparent and democratic.

    Not only will these proposed changes allow us to transition to the new legislation, but CIRA will also have governance processes in-line with best practices for not-for-profits. It is our opinion that this is the direction that is best for CIRA and the Canadian Internet community.

    Let’s not lose sight of the fact that the organization is entrusted to a Board that is democratically elected by CIRA’s members. Their focus is firmly rooted in ensuring that CIRA is a good steward of the .CA domain space for the benefit of all Canadians.

    I look forward to the discussion at our AGM on September 18.

  • http://votermedia.blogspot.ca/search/label/CIRA Mark Latham

    Thanks Byron, but that doesn’t answer my question: Why is CIRA continuing to make false statements to CIRA members about the proposed changes, saying they are all necessary and required by the legislation (here, here, and in Paul’s post above), when in fact they are not all necessary or required by the legislation?

    [Comment date: 2012-09-12]

  • Byron

    Hi Mark,

    I’d like to take a step back for a moment to preface my response with the fact that we had two types of proposed bylaw changes when we reached out to Members this past spring: (1) changes specifically related to the Canada Not-for-Profit Act and (2) other changes that we deemed appropriate but outside of what is required by the Act. As you know, the latter was taken off the table as outlined in Paul Andersen’s blog post above. The intention of what has been published both in this blog post and on CIRA’s public web site is to make this differentiation.

    Because the new Act contains mandatory and non-mandatory provisions (Section 158 being non-mandatory), CIRA considers both to be necessary as they are essential to not only compliance with the Act but also implementation of best practices in organizational governance. We want what is best for the organization and believe that the Act, even those parts that are optional, are necessary to move forward as an organization.

    As there are many ways to interpret the written word, we have worked to carefully thread this needle. I acknowledge that the nuance you have pointed to may still cause confusion for some and appreciate your efforts to seek further clarity. With this in mind, we will make a small wording change to both this blog post and on our website in the interest of further clarifying the situation. You can expect this by tomorrow.

  • http://votermedia.blogspot.ca/search/label/CIRA Mark Latham

    Thank you Byron. I found these three changes today. Please let me know if I missed any:

    1. On CIRA’s Governance web page
    “CIRA has decided to proceed only with the changes necessary to transition to the new legislation.”
    was replaced by
    “CIRA has decided to proceed only with the changes we believe are essential to transition to the new legislation.”

    2. On CIRA’s Governance sub-page About CIRA’s proposed bylaw changes
    Same before and after quotes as in #1 above.

    3. In Paul Andersen’s August 8 guest post on this page (above) –
    “Given the feedback received and the continued Membership engagement, the Board has decided to move ahead with only the changes that are necessary to transition to the new legislation governing not-for-profits.”
    was replaced by
    “Given the feedback received and the continued Membership engagement, the Board has decided to move ahead with only the changes the changes we believe are essential to transition to the new legislation governing not-for-profits.”

    However, I think there is one more change you should make. In Paul Andersen’s guest post above, right after the sentence that has now been changed, there is still this sentence:
    “Accordingly, at the Annual General Meeting (AGM) this fall we will only be asking .CA Members to approve those changes required to our bylaws so that we can transition to the new Act…”

    That statement too is false, so it too could “cause confusion”.

    [Comment date: 2012-09-14]

  • http://votermedia.blogspot.ca/search/label/CIRA Mark Latham

    PS: I found one more recent change, to add to the three in my previous comment:

    1b. On CIRA’s Governance web page
    “The proposed changes included those necessary to transition to the new legislation,…”
    was replaced by
    “The proposed changes included those we believe are essential to transition to the new legislation,…”

    [Comment date: 2012-09-14]