2017/06/14 Minutes

Minutes of the Meeting of the CIRA Board of Directors held at the CIRA Offices, 979 Bank Street, Ottawa on June 13 and 14, 2017

Directors attending: Alex Beraskow, Kerry Brown, Andrew Escobar, Michael Geist, Rowena Liang, Louise Macdonald, Helen McDonald,  Susan Mehinagic, Marita Moll, Bill Sandiford (via telephone), Rob Villeneuve, Faye West

Advisors: John Demco, Byron Holland, Adam Scott

Corporate Secretary: Paul Havey

Guests: Steven Barry, Dave Chiswell, David Fowler, Paul Havey, Rick Koeller, Jacques Latour, David Mason (Deloitte), Joe Solly (Deloitte)

Recording Secretary: Lynn Gravel

The meeting was called to order at 1:00 p.m. on June 13, 2017.

1. Approval of Agenda

It was resolved that the agenda for the meeting be adopted as presented.

(Moved: F. West, seconded: H. McDonald, unanimously carried)

2. Chair’s remarks

The Chair referred the Board to the consent agenda. It was noted that the consent agenda included routine items grouped together and approved in one action, rather than filing motions on each item separately.  The Board will have the opportunity to remove any item from the consent agenda for discussion.  The Governance Committee, along with staff, will develop a formal policy on how a consent agenda will be managed by the Board.

3. Consent Agenda  

The Chair called for any items to be removed from the consent agenda for discussion.

a. Approval of the Draft Minutes of the May 2, 2017 Board of Directors' Meeting

b. Approval of the Draft Minutes of the May 17, 2017 Board of Directors' Meeting

c. Action Items – completed

d. Report on all Statutory Obligations

It was therefore resolved that all items in the consent agenda be approved.

(Moved: L. Macdonald, seconded: A. Escobar, unanimously carried)

4. Approval of the Draft Minutes of the February 28, 2017 Board of Directors' Meeting

The Board of Directors proposed some changes to the minutes to better reflect the balance of the discussion held.  It was therefore resolved that the minutes of the February 28, 2017 Board of Directors’ be approved with these changes.

(Moved: L. Macdonald, seconded: H. McDonald, unanimously carried)

J. Solly joined the meeting.

5. Community Investment Program Discussion

The purpose of the discussion was to review CIRA’s community investment strategy and build consensus around the path forward for the organizations community investment activities.

Staff began the discussion by presenting an overview of the organizations community investment program and historical perspective. This overview spanned the timeframe from the program’s inception in June 2010 up to the present day.

This was followed by a facilitated discussion where three core areas were discussed within the context of the program. Those areas were:

1) defining “Building a Better Online Canada”;

2) understanding CIRA’s role in “Building a Better Online Canada”; and

3) designing a successful Community Investment Program.

At the end of the session it was agreed that further discussion was required following the publication and review of the session’s report from Deloitte.   At that time, the Board will determine next steps, deliverables and timing.

J. Solly withdrew from the meeting.

The meeting was adjourned at 5:00 p.m.

The meeting was called to order at 8:30 a.m. on June 14, 2017.

D. Mason joined the meeting.

6. Activities of the Organization

The Board held an in-camera session.

D. Mason withdrew from the meeting.

7. Financial and Operational Updates

7.1 Management Report

This report was provided as information and tabled at the meeting.

Staff highlighted that the organization continues to focus on its core mandate – in particular our security posture.  It was noted that the recent Dyn outage across a large swath of the United States and the Wanna Cry ransomware attack did not impact CIRA directly. The organization has invested heavily in its own DNS infrastructure and the IT operations team and security specialists proactively manage these risks.  Staff noted the opportunity to become a key thought leader and player in the areas of Internet safety and security. Given CIRA’s reputation and credibility, we will be able help educate the public, especially the end users, in understanding the risks in our digital Internet environment. Staff continues to drive awareness and disseminate the safety information.

There was discussion on the .CA migration onto Fury. It was agreed that staff would provide the timelines in the next report.

Staff was also requested to explore a mechanism to track the impact of the upcoming price increase. Staff indicated this would be challenging as Registrars often bundle domain registrations with other services. 

7.2 Preliminary Unaudited Q4-FY17 Financial Results

The unaudited Q4-FY17 financial results were provided to the Board of Directors as information and tabled at the meeting.  Staff noted that the preliminary unaudited financial results may be subject to change based upon any final adjustments made by management during their year-end closing process.

Staff gave a brief overview of the Q4-FY17 financial results as compared to the budget noting that total revenue had exceed the forecast budget by $205K. This was largely attributed to better than anticipated registration revenues due to higher than budgeted cumulative new domain registration growth and renewal. Staff noted that the variety of tactics and communications activities undertaken with the registration business had led to this result.   Overall, core operations expenditures were under budget by $36K mostly due to favorable variances on Salaries & Benefits, offset by unfavorable variances on Consulting and Comunication & Awareness. 

As well it was noted that amortization was lower in FY17 due to the timing of CAPEX expenditures during the year.   The Community Investment Program had a favorable variance of $127K compared to budget, largely as a result of under expenditures in the Internet Smart Cities and State of the Internet Programs.

Staff noted that during Q4/FY17, the investment portfolio was transitioned to apply the revised SIPP approved by the Board.  As a result, a portion of CIRA’s initial investment holdings were sold and replaced with different types of investment vehicles.  The actual investment income, net ended the fiscal year with a favourable variance of nearly $537K compared to budget.

On an overall basis, the organization ended the fiscal year with an excess of revenue over expenditures of $346K.   This represents a $1.1M favorable variance to the budgeted operating deficit of ($750K).

R. Koeller joined the meeting.

8. Committee Reports

8.1 Report from the Finance, Audit, Investment and Risk Committee

Staff presented the risk management process and methodology. It was noted that the organization follows a robust risk management process and methodology based on industry best practices.

Staff presented the risk summary as at March 31, 2017 noting some of the emerging threats and opportunities that were currently being monitored.  Overall, 11 new risks have been identified this fiscal year.  Management action has resulted in the reduction of the risk exposure on 4 threats and the closure of 5 risks.  It was noted that risks indicated in red are immediately exposed to the FAIR Committee (strategic risks that are low probability – high impact).  

It was agreed that, going forward, staff would provide a high probability/high impact summary report and a risk analysis of new products. A session with the Board will also be held at a later date to better understand the threats & opportunities and how the organization responds to them.

R. Koeller withdrew from the meeting.

8.2 Report from the Governance Committee

The Chair of the Committee reported that the Committee had met recently to review the various board policies and recommended only minor edits.

It was therefore resolved that the Director Compensation Policy be approved, as presented, and reviewed again in one year.

(Moved: H. McDonald, seconded: K. Brown, unanimously carried)

It was further resolved that the Director ICANN Meeting Attendance Policy be approved, as presented.

(Moved: F. West, seconded: A. Escobar, unanimously carried)

It was further resolved that the Director Orientation, Education and Professional Development Policy be approved, as presented.

(Moved: H. McDonald, seconded: R. Liang, unanimously carried)

Some of the members were of the view that participation at ICANN meetings should be increased as it provides a perspective on the industry to incoming board members. The Chair reminded the Board of the continuing education opportunities that are funded.

The Committee also reviewed the draft Board and Committee Effectiveness Survey that the Directors will be asked to complete this year.

8.3 Report from the Market Strategy Committee

The Board held an in-camera session.

8.4 Report from the Community Investment Committee

This report was provided as information and tabled at the meeting.

The Chair of the Committee reported that the Committee held a Lessons Learned meeting recently. Overall the Committee was satisfied with the program.  The Committee was however requesting that the Board consider the following suggestions to broaden the benefits of the program:

That within the current funding envelope that the program has the flexibility to award 1 – 2 larger grants ($100 - $250K) per round of funding for projects that are larger and have more risk;

That the Board consider the potentiality of developing partnerships with potential applicant organizations:

That CIRA fund (through the CIC) the development of tools that could be used to address common requests (website building, engagement tools, digital literacy teaching guides, etc.);

That the board consider ‘big themes’ for particular granting cycles; and

That the board provide more clarity around the organization’s overall goal of building a better online Canada.

The Chair of the Committee noted that staff was currently building on recommendations 1) and 2) for the next round of funding. It was noted that larger grants would require a significant shift in the program. Regarding recommendation 2), staff reported that Amazon Web Services had recently agreed to partner with CIRA and provide Community Investment Program recipients with infrastructure services. It was agreed that the Board would review, at the September board meeting, the program budget; management and committee recommendations; and the appointment of an additional board member and a non-director to the Committee. 

9. Other Business

There was no other business to discuss.

10. Next Meeting

The next meeting of the Board will be held on September 18, 2017 in Ottawa.   

S. Barry, D. Chiswell, D. Fowler, P. Havey, B. Holland, L. Gravel and J. Latour withdrew from the meeting.

11. In-Camera Session

The Board of Directors held an in-camera session at the conclusion of the meeting. 

The in-camera session adjourned.

12. Adjournment

There being no further business, the meeting was concluded at 3:40 p.m.