2018/06/14 Minutes

Minutes of the Meeting of the CIRA Board of Directors held at Hotel Arts in Calgary, on June 14, 2018 at 9:00 a.m.

Directors attending: Alex Beraskow, Ryan Black (via conference call), Andrew Escobar, Michael Geist, Jill Kowalchuk, Rowena Liang, Louise Macdonald, Tyson Macaulay, Helen McDonald, Marita Moll, Bill Sandiford, Rob Villeneuve

Advisors: John Demco, Byron Holland

Regrets: Pamela Miller

Corporate Secretary: Paul Havey

Guests:  Albert Chang, Steven Barry, Dave Chiswell, David Fowler, Rick Koeller, Jacques Latour

Recording Secretary: Lynn Gravel

1. In-Camera Session

The Board held an in-camera session.

A. Chang, S. Barry, D. Chiswell, D. Fowler, P. Havey, B. Holland, L. Gravel, J. Latour joined the meeting.

The meeting was called to order at 11:15 a.m.

2. Approval of Agenda

It was moved by M. Moll and seconded by T. Macaulay that the agenda for the meeting be adopted as presented.

3. Chair’s remarks

The Chair did not have any remarks.

4. Consent Agenda

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

  • Approval of the Draft Minutes of the May 3, 2018 Board of  Directors'  Meeting
  • Approval of the Draft Minutes of the May 16, 2018 Board of Directors' Meeting
  • Report on Statutory Obligations
  • Management Report (Registration activity only)
  • Preliminary Unaudited Q4-FY18 Financial Results
  • Q4/FY18 Risk Management        

It was requested that a fulsome discussion on the Risk Management report and/or risk oversight, appetite and tolerance be deferred to the September board meeting.  It was also requested that, time permitting, that any questions pertaining to the preliminary Unaudited Q4-FY18 Financial Results be moved to the end of the meeting.

Minor edits were noted to the draft minutes of the May 3, 2018 and May 16, 2018 meetings.

It was therefore resolved that the consent agenda be approved with the above noted changes.

(Moved: L. Macdonald, seconded: J. Kowalchuk, unanimously carried)

5. Strategic Plan Review Report

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

Staff referred the Board to the Executive Summary noting that overall there is a high-level of consistency in thinking and alignment on perspectives across each of the groups. Overall, the Board agreed that the organization had the appropriate aspirational goal, to Build a Better Online Canada, and that the organization should stay the course with respect to the core strategic direction.

It was raised that the mid Strategic Review would not only serve the next strategic plan, but would potentially influence the current and next fiscal operating plan activities.    Staff will provide a timeline of the steps and activities required for the next strategic planning exercise at the September board meeting.

R. Koeller joined the meeting.

6. Cost Allocation Framework

Staff presented the proposed approach for undertaking a cost allocation exercise for CIRA that would utilize the approved FY19 Budget to relate various budgeted costs to CIRA’s outputs reflected in our products, services and overall activities. 

Staff noted that cost allocation, in CIRA’s case, is a combination of activity based costing and product/service costing.   Staff noted that it was important to have agreement on the framework, key objectives, principles, the various stakeholder roles and terminology.  In particular, it was important that the exercise be balanced to meet the organizational needs and that the oversight role guard against scope creep; ensure adequate detail but consider what is material and to what purpose or end is information is being requested or provided; and assess project progress.

Staff presented the different steps of the process cycle.  It was noted that Step 1, which will likely require the most significant effort,  is primarily intended to educate and ensure all have a similar level of understanding of all the cost elements including human resources, infrastructure and operating costs. Step 2 would identify the alternatives and possible basis for the cost allocations and determine if the provided rationale is appropriate. The proposed basis and rationale of alternative cost allocations would be reviewed and vetted by the FAIR and Market Strategy Committees.  In Step 3, management and stakeholders would socialize, refine and finalize the cost allocation with input from the MSC and FAIR Committees.

The FAIR Committee Chair noted that the various Committee and Board oversight roles would require further discussion over the next few months.

Staff presented the draft timeline of the cost allocation exercise noting that all the steps are intended to overlap with each other and that staff will make installments of materials, as appropriate through the process.

There was some discussion and dissonance on the timeline and nature of the cost allocation exercise (i.e. undertaking a quick high-level analysis versus a more detailed approach and the benefit of a more structured process and Board / management engagement within the process to ensure buy-in to the various outcomes of such an exercise). There was also discussion on the capturing of non-financial benefits within the cost allocation exercise and it was agreed that this would be undertaken as a separate exercise. 

R. Koeller withdrew from the meeting. 

7. Committee Reports

7.1 Report from the Governance Committee

The Chair of the Committee reported that the Committee had met recently. The Committee reminded the Board of the timing of the Board and Committee effectiveness survey.  Board members were encouraged to provide feedback beyond the specific survey questions. The aim is to discuss the results of the Board and Committee effectiveness survey at the September meeting.

It was also noted that the Committee had reviewed and discussed some potential changes to CIRA’s objects. The Committee discussion centered around what wording would get changed, how members might respond to proposed changes, along with the timing surrounding approving such changes. It was recommended that a minimalist approach to changes be adopted, while at the same time, making the necessary adjustments so that the objects accurately reflect what the current operations undertaken by the organization.  Overall, the Committee was satisfied with the draft revised objects that had been presented, and was of the view that the Board that is constituted at the September 2019 AGM should be the one approving the changes to the objects. Moving forward, it was noted that the Board will have an opportunity for a fulsome discussion on the objects at the September meeting.

Finally, the Chair of the Committee referred the Board to the Director Orientation session document of proposed content. The session has been enhanced and includes a mentorship program as part of the orientation process.

7.2 Report from the Finance, Audit, Investment and Risk Management Committee

The Chair of the Committee provided an overview of the history of the investments held under the Restricted Investments balance since 2009; the transition from a non-discretionary investment management approach to the selection of a discretionary Investment Manager in 2014; the development of CIRA’s initial Statement of Investment Policy & Procedures (SIPP) in 2015 and a slight SIPP modification in February 2017 to enhance the investment return with minimal risk.

The Chair of the Committee noted that based on the advice of the Investment Manager and Committee review of options, the Committee now wished to recommend slight changes to the SIPP, by permitting up to 10% of the portfolio to be invested in the Alternative Investments category.  It was noted that this change would decrease annual volatility and downside risk in light of the changing interest yield curve, while maintaining the level of return.

There was some concern expressed with the recommendation to intentionally invest in the Alternative Investments category and whether the underlying investment held in the proposed RBC Multi-Strategy Alpha Fund were inherently more risky and/or could be perceived to be less ethically responsible investments.  

As context, staff noted that the proposed SIPP amendment should be viewed in light of the overall investment portfolio risk profile and the anticipated future investment climate. It was also noted while the SIPP may outline the asset mix and ranges, investment categories and proposed investment funds, CIRA does not choose the actual underlying investments within each fund and the nature of the underlying investments will vary over time.   

It was agreed at this time that no changes be made to the SIPP and to maintain the current investment mix. The Board asked for follow-up  with the Investment Manager to obtain information on the underlying nature of the funds held under the proposed investment fund and the broader approach to ethically responsible investing, and the FAIR Committee to report back to the Board. 

7.3 Report from the Market Strategy Committee

The Chair of the Committee reported that the Committee had met on May 31, 2018 for their quarterly update.  The Committee continues to utilize the risk continuum tool and approach to undertake their own assessment of the risks associated with each product. The Chair of the Committee noted that the Committee was satisfied with the accuracy of the proposed continuums.

Staff provided an update to the Board on the portfolio scorecard highlighting the changes since the last quarter in market opportunities, strategic alignment and the competitive landscape.

It was also noted that the Committee will be reviewing the effectiveness of the new product filter.

7.4 Report from the Community Investment Committee

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

Staff highlighted that since inception of the fund, CIRA has provided over $5 million in grants.  It was noted that most of the completed projects had fully or partially realized their project goals.

The Co-Chairs of the Committee noted that working groups would be set up this fall to review the objectives of the program and at the same time seek approval of minor changes to the program, such as larger grants, focus on more specific activities, etc.

The Board requested that staff investigate similar Community Investment programs to see whether they would provide useful models for CIRA to consider, as well as look at the amount and percentage CIRA makes available to its’ Community Investment program activities relative to other ccTLDs.

8. Preliminary Unaudited Q4-FY18 Financial Results

The preliminary unaudited Q4-FY18 financial results were provided to the Board and tabled at the meeting.

A question was raised regarding the status of various current job vacancies. Staff noted that for certain positions, the challenge was to find the right qualifications and balance.

There was discussion regarding the number of domain name registrations.  Staff confirmed that the marketing plan would be executed over the summer and that staff would share the marketing strategy with the Board in September.

9. Other Business

There was no other business to discuss.

10. Next Meeting

The next meeting of the Board will be held in Ottawa on September 26, 2018.    

S. Barry, A. Chang, 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.

12. Adjournment

On motion by A. Escobar and seconded by R. Villeneuve, the meeting was concluded at 4:45 p.m.