2012/09/17 Minutes

Minutes of the Meeting of the CIRA Board of Directors held at via teleconference on July 25, 2012, 2012 at 4:00 p.m. Eastern time

Directors attending: Paul Andersen, Kerry Brown, John Demco (ex-officio), Heather Dryden (ex-officio), Andrew Escobar, Byron Holland (ex-officio), Jim Grey, John King, Rowena Liang, Louise Macdonald, Susan Mehinagic, Barry Shell, Victoria Withers

Regrets: Bill St.Arnaud

Corporate Secretary: Michael Stewart

Guest: Paul Havey

Recording Secretary: Lynn Gravel

1. Approval of Agenda

It was the consensus of the Board of Directors that the agenda distributed with the material for the meeting be adopted as presented.

2. Approval of the Minutes of the May 31, 2012 Board of Directors' Meeting

It was resolved that the minutes of the May 31, 2012 Board of Directors' meeting be approved as presented.

(Moved: S. Mehinagic, seconded: K. Brown, opposed: B. Shell, motion carried)

3. Approval of the By-Law Changes

Staff provided an overview of the changes arising from the new legislation. It was noted that the new Act did not allow for ex-officio Directors. Accordingly, the current ex-officio Directors would be categorized as Board Advisors in order to maintain the structure. Other changes required to conform with the new Act include sending the annual financial statements and other documents to each Member by mail; the voter list generated 21 days before the start of the Annual General Meeting; the use of electronic voting and signatures; and incorporate Members' rights regarding Directors and bringing issues to the membership.

It was therefore resolved that:

WHEREAS the Corporation was incorporated under Part II of the Canada Corporations Act by Letters Patent dated the 30th day of December, 1998;

AND WHEREAS those Letters Patent were amended by Supplementary Letters Patent dated the 10th day of February, 2006;

AND WHEREAS it is considered to be in the best interests of the Corporation that it be continued under the Canada Not-for-profit Corporations Act (the “NFP Act”) pursuant to sections 297 and 211 of the NFP Act;

On motion duly made, seconded and unanimously carried it was RESOLVED THAT:

1. Subject to the members’ approval, the Corporation apply for a certificate of continuance continuing the Corporation under the provisions of the NFP Act;

2. Form 4031 – Articles of Continuance (transition) which has been submitted to this meeting and is annexed to these minutes as Schedule A is approved;

3. The general operating by-law of the Corporation (as amended) is repealed effective on the date that the Corporation continues under the NFP Act and the new general operating by-law

No.1, which has been submitted to this meeting and is annexed to these minutes as Schedule B is approved and will be effective on the same date; and

4. Any one of the officers and directors of the Corporation is authorized to take all such actions and execute and deliver all such documentation, including the annexed Articles of Continuance (transition) which is necessary or desirable for the implementation of this resolution.

(Moved: S. Mehinagic, seconded: K. Brown, unanimously carried)

4. IFRS Update

Staff advised the Board of Directors all necessary project activity to implement and adopt the International Financial Reporting Standards (IFRS) effective April 1, 2013 had been fully completed. A set of mock financial statements had been prepared and the Auditors have undertaken preliminary audit procedures on the opening Statement of Financial Position as at April 1, 2011.

The Auditors examined the accounting policies under IFRS and were in full agreement with management's analysis and accounting treatment afforded to CIRA’s financial results.

Staff noted that unfortunately separate disclosure of the Community Investment Program (“CIP”) in the Statement of Operations as desired by the Audit Committee and Board was not possible under the more restrictive IFRS financial reporting as such expenditures would not be interpreted to be expenditures by nature, but rather expenditures by function (i.e. IFRS does not permit hybrid reporting).

Staff undertook a preliminary evaluation of the various pros and cons of implementing IFRS and discovered very few Canadian not-for-profit entities or ccTLD registries around the world will be adopting IFRS. As a result, the Audit Committee requested that staff evaluate whether it remains appropriate or not to continue with the proposed adoption of IFRS or whether CIRA should simply adopt the new C/GAAP for not-for-profit entities. Staff will therefore present their findings at the next Audit Committee meeting in September and a recommendation will be put forward to the Board of Directors at this time.

5. Approval of the 2012 Audited Financial Statements

The Chair of the Audit Committee reported that the Committee had met via teleconference on July 5, 2012 to review the audited financial statements for the fiscal year ending March 31, 2012. At the meeting, the external auditor presented their Audit Findings Report and confirmed: their issuance of an unqualified audit opinion in accordance with Canadian generally accepted accounting principles, that the audit engagement was conducted in accordance with their audit plan communicated; their independence from CIRA; management was fully prepared and cooperative; the reasonableness of management’s judgement exercised with respect to accounting estimates; that they did not identify any material uncorrected misstatements and/or fraud or corrected misstatements during the course of the audit engagement; the appropriateness of the accounting policies used with respect to consistency, neutrality and clarity of disclosures and that no management letter matters arose to be communicated to the Audit Committee.

Based upon the Audit Committee's review of the draft proposed audited financial statements, note disclosures and receipt of the Audit Findings Report, the following two (2) motions were proposed:

Be it resolved that:

1. The Board of Directors approve the financial statements of the Canadian Internet Registration Authority for the fiscal year ended March 31, 2012 subject to the amendment to replace the second paragraph of note 3 with the following revised wording: "CIRA continues to evaluate the impact of the accounting frameworks that will be adopted for its fiscal year ending March 31, 2013.";

2. The financial statements of CIRA be presented to the members of CIRA at the next Annual General Meeting; and

3. P. Andersen and R. Liang be authorized to sign CIRA’s 2012 financial statements on behalf of the Board of Directors to signify approval of the Board.

It was further resolved that:

1. a motion be presented at the upcoming Annual General Meeting, to re‐appoint KPMG as CIRA’s auditors, to hold office until the close of the next annual meeting of members.

2. The Board of Directors recommends approval of this motion by CIRA’s Members.

(Moved: R. Liang, seconded A. Escobar, unanimously carried)

6. Review of Director Compensation

The Chair of the Governance Committee reminded the Board of Directors that according to the Director compensation policy dated October 1, 2009, a review of Director Compensation is conducted every three years by an independent consultant. It was noted that the review is carried out every three years to ensure that Directors' compensation continues to reflect current market rates and at the same time, review the structure of the compensation elements and clarify all forms of compensation such as professional development and other benefits.

There was some concern regarding the cost and merit of the review but after further discussion it was the consensus of the Board of Directors to proceed with the Director Compensation review.

7. Next Meeting

The next meeting of the Board will be held in Ottawa on September 17, 2012.

8. Adjournment

There being no further business, on motion by R. Liang and seconded by V. Withers, the meeting was concluded at 5:05 p.m.