2013/05/30 Minutes

Minutes of the Meeting of the CIRA Board of Directors held at the CIRA Offices, 350 Sparks Street, Ottawa on May 30, 2013 at 12:00 p.m. Ottawa time.

Directors attending: Paul Andersen, Kerry Brown, Andrew Escobar, Michael Geist, Bill Gibson, Rowena Liang, Louise Macdonald, Carole Mackaay, Kevin McArthur, Susan Mehinagic, Bill Sandiford, Bill St.Arnaud

Board Advisors: John Demco, Byron Holland, Andreea Todoran

Guests: David Fowler, Paul Havey, Jacques Latour

Corporate Secretary: Michael Stewart

Recording Secretary: Lynn Gravel

1. Approval of Agenda

The Chair proposed that the agenda be amended to include, under Other Business, a note of thank you and item 4.2.1 Board Travel, Education and Expense Policies be deferred to the next meeting.

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

2. Approval of the Draft Minutes of the February 27, 2013 Board of Directors' Meeting

The minutes of February 27, 2013 Board of Directors’ meeting were approved with a minor edit.

3. Financial and Operational Updates

3.1 Report on all Statutory Obligations

This report was provided to the Board of Directors as information and tabled at the meeting.

3.2 Management Report

This report was provided to the Board of Directors as information and tabled at the meeting.

Staff noted that two documents were provided covering the registration activities for the fiscal year-end of March 31, 2013 and for the current period, to April 30, 2013. It was noted that the trend for net new registrations was continuing to decline slightly while the renewal rates remained consistent and very strong.

There was some discussion regarding the activities relating to the strategic objectives, specifically regarding the Third Party Entity. Staff reported that although an update had not been provided in the report, one entity was being considered as a possible candidate. It was noted that staff had not yet engaged in any conversation but were looking for a credible and reputable actor to express important Internet issues, separate and distinct from CIRA.

There was also a request to provide a sense of the activities around product development. Staff reported that some product extensions were in different phases of planning and staff anticipated presenting progress on their activities and the stage of business case development at the September Board of Directors’ meeting.

3.3 Review of Q4 2013 Unaudited Financial Results

The financial statements were provided to the Board of Directors as information and tabled at the meeting.

Staff gave a brief overview of the FY13 unaudited Financial Statements as compared to the budget. As previously reported, cumulative Net New Domain Registrations during FY13 lagged behind budget. As a result, Registration Revenue had an unfavourable variance of $541K relative to the budget. It was noted that the total FY13 year-end operating surplus of $606K had decreased relative to the Q3 FY13 surplus of $763K. Staff reported that the Audit, Finance and Investment Committee had also reviewed the financial statements at its last meeting.

4. Update on Committees

4.1 Report from the Audit, Finance and Investment Committee

The Chair of the Audit, Finance and Investment Committee reported that the Committee had met the previous week and were bringing a number of proposals to the Board of Directors, as follows:

4.1.1 Banking Authorization Exception

The Audit, Finance and Investment Committee (AFI) reviewed a proposal to add an exception to the signing authority policy for statutory remittances amounts over $150,000 to the Canada Revenue Agency. It was noted that currently only the Chair of the Board, Chair of the AFI Committee, President and CEO have signing authority for this amount. Staff proposed that the Director of Finance and Administration and General Counsel be permitted to sign for these remittances.

It was therefore resolved that the Board of Directors approve the following cheque signing exception: Statutory remittances to the Canada Revenue Agency over $150,000 shall be signed by any two of the Chair of the Board, Chair of the Audit Committee, President and CEO, Director of Finance and Administration, General Counsel; and make the noted minor edits to the policy.

(Moved: R. Liang, seconded: S. Mehinagic, unanimously carried)

4.1.2 Selection of Agency of Record

The Chair of the AFI Committee reported that the contract for the Agency of Record had come to an end and staff was proposing to divide the commitment between two Agencies based on their respective areas of expertise. It was also important to note that there was a 30 day exit clause in both contracts, and that while there was a commitment amount in the contract there was no minimum amount to be spent beyond the first year.

It was therefore resolved that the Board of Directors authorize staff to enter into negotiation with, and if advisable, establish an AOR relationship with Alphabet and High Road Communications to supply advertising, communication and web services.

(Moved: R. Liang, seconded: B. Sandiford, unanimously carried)

4.2 Report from the Governance Committee

The Chair of the Governance Committee reported that the Committee had met earlier. It was noted that the Nomination Committee had received the Board Competencies and Diversity report and it would soon be published on CIRA’s website. It was further noted that the Nomination Committee had declined this year to have a third party assist them with filtering through the applications.

The Committee discussed the process and timing for Board member evaluation as well as the Board and Committee effectiveness evaluations. A questionnaire will be prepared by the Governance Committee and circulated to the Board of Directors in mid-July. The objective was to discuss the results at the September meeting.

There was also discussion on the Chair succession and for those interested in the position, were asked to submit an expression of interest in advance of the October Board meeting.

The Chair of the Governance presented a revised Director Orientation, Education and Professional Development policy. It was noted that the reference to the Institute of Corporate Directors was deleted, as there were a variety of other programs that may be suitable. As for new Directors attending an ICANN meeting, the goal was to attend a meeting within the first year of their term depending on various factors, such as location of the meeting and Board turnover.

It was resolved that the Board of Directors approve the Director Orientation, Education and Professional Development Policy as presented.

(Moved: S. Mehinagic, seconded: B. St.Arnaud, unanimously carried)

4.3 Report from the Risk Management Committee

The Chair of the Risk Management Committee reported that the Committee had met earlier. A number of Board members had attended the meeting and staff had provided an overview of the risk management framework. At its meeting, the Committee had agreed on the different risk groups: strategic; operational; and information technology. For its next meeting, the Committee will be discussing its satisfaction with the overall risk management program and make a recommendation on the frequency and format of reporting to the Board of Directors on the Enterprise Risk Registry.

5. Restricted Investment Policy

The Chair of the AFI Committee reported that the Committee had reviewed a new policy on Restricted Investment. It was noted that the policy deals with the rationale as to why CIRA accumulates funds within this account on its Statement of Operations, whereas the Statement of Investment Policy address how these funds are invested and managed. The adoption of this policy will also simplify the disclosure notes in the Financial Statements. It was further noted that the policy had been reviewed by the Auditors and they were recommending that the policy be retroactive to March 31, 2013.

It was therefore resolved that the Board of Directors approve the proposed Restricted Investments Policy retroactive to March 31, 2013.

(Moved: R. Liang, seconded: B. Gibson, unanimously carried)

6. Proposed Credit Terms with Registrars

P. Andersen turned the Chair to L. Macdonald.

The Chair of the AFI Committee reported that the Committee had reviewed the proposed credit terms with Registrars at its meeting last week. It was noted that currently CIRA was pre-funding domain transactions. For competitive reasons, as well as the changing market dynamics, staff was proposing a post-transaction funding model, which would be more in line with other businesses. It was further noted that the Committee had assessed the proposal and found it reflected an acceptable level of organization financial risk in order to remain competitive. Staff will be keeping the Committee apprised of the final program design and implementation.

It was therefore resolved that the Board of Directors approve the development and implementation of a trade credit program by staff.

(Moved: R. Liang, seconded: A. Escobar, abstaining: P. Andersen, motion carried)

P. Andersen resumed the Chair.

7. Internet Activities – Advisory Committee

Staff provided general principles that would reflect a solid foundation for an Advisory Committee. These were developed as a result of the output from the strategic planning process, the feedback received from the Board of Directors and a combination of reaching out to other ccTLDs and similar organizations. The Chair of the Board proposed that the Board of Directors review the recommendation and, should there be a general agreement, staff would then draft the terms of reference for review and approval by the Governance Committee.

Staff proposed that the Committee composition include independent, subject-matter experts with relevant skills/experience; and Board representation, including the Chair. A discussion ensued regarding the Committee size and the selection of the Committee members.

It was agreed not to exclude projects that require ongoing funding but rather allow the Committee to have the flexibility to extend the funds.

It was also agreed that the selection criteria for the funding should include the following parameters: impact, clear outcomes, sustainability, capacity to perform, support from relevant stakeholders, and alignment with program mandate. In regard to the application process, it was agreed that once a year for the first year was appropriate but the Committee may want to consider accepting applications twice a year should time sensitive projects emerge. It was also agreed that projects should support CIRA’s core mandate and not fund for-profits, individuals or activities entirely outside of Canada.

There was discussion regarding the funding categories. Some raised concerns that CIRA funding projects with advocacy objectives could hinder CIRA’s longstanding reputation as a trusted, independent and neutral organization. It was agreed that this issue would be addressed in the Terms of Reference of the Advisory Committee.

Whereas the Board approved the Strategic Plan in January 2013, which called for, amongst other matters, the creation of a Board Community Investment Advisory Committee as described therein;

Whereas Staff provided today data regarding the structure, approach and processes or other like groups, and made certain recommendations regarding such matters;

Be it resolved that Staff create a first draft of Terms of References for the Community Investment Advisory Committee, based on the data and recommendations, for review and approval by the Governance Committee. Upon completion and approval of such Terms of Reference, with such changes as the Governance Committee may see fit, the Governance Committee be directed to then submit them to the Board for approval.

(Moved: B. Gibson, seconded: S. Mehinagic, unanimously carried.)

8. Other Business

8.1 Note of Thanks

On behalf of the Board of Directors, the Chair expressed thanks to S. MacDonald for his time and dedication as Chair of the Nomination Committee for the past seven years.

9. Next Meeting

The next meeting of the Board of Directors will be held in Montreal in conjunction with the Annual General Meeting.

D. Fowler, L. Gravel, P. Havey, B. Holland, J. Latour and M. Stewart withdrew from the meeting.

10. In Camera Session

The Board of Directors held an in camera session.

Following the in camera session, L. Gravel rejoined the meeting.

11. Adjournment

There being no further business, the meeting was concluded at 4:05 p.m.