2014/06/10 Minutes

Minutes of the Meeting of the CIRA Board of Directors held at the CIRA Offices, 350 Sparks Street, Ottawa on June 10, 2014 at 9:00 a.m.

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

Advisors: John Demco, Byron Holland, Adam Scott

Guests: Jennifer Austin, Dave Chiswell, Mark Gaudet, Paul Havey, Jacques Latour

Recording Secretary: Lynn Gravel

1. Approval of Agenda

It was resolved that the agenda for the meeting be adopted with a change in the order of items.

(Moved: B. St.Arnaud, seconded: B. Sandiford)

2. Approval of the Draft Minutes of the April 17, 2014, May 22, 2014 and May 30, 2014 Board of Directors' Meetings

It was resolved that the minutes of the April 17, 2014, May 22, 2014 and May 30, 2014 Board of Directors’ meetings be approved as presented.

(Moved: B. Gibson, seconded: K. McArthur, unanimously carried)

3. Chair’s remarks

The Chair did not have any remarks.

L. Gravel and B. Holland withdrew from the meeting.

4. In-Camera Session

The Board of Directors held an in camera session to review the CEO performance evaluation and compensation.

Following the in camera session, L. Gravel and B. Holland rejoined the meeting.

D. Chiswell, P. Havey and J. Latour joined the meeting.

5. Financial and Operational Updates

5.1 Report on Statutory Obligations

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

5.2 Management Report

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

Highlights noted the changes to domains under management since the last report. Also reviewed and discussed was the status of projects underway or planned pursuant to the strategic plan through to the period ending September 30, 2014.

5.3 Preliminary Unaudited Q4-FY14 Financial Results

Staff presented the preliminary unaudited Q4-FY14 financial results. Highlights noted an overall preliminary surplus in line with the reported year end expectancy. Revenues were higher than budgeted due to better than anticipated net new domain registrations and cumulative domain renewals. Expenditures were lower than budgeted due mainly to timing of FTE hires and departures, consulting, staff training, travel, lower expenditures on the Community Investment Program and a slower ramp up in expenditures on new product initiatives.

Staff informed the Board that starting with the Q1 FY15 financial results; the reporting format would eliminate the Contribution Margin line.

6. Update from Committees

6.1 Report from the Market Strategy Committee

The Market Strategy Committee had not met since its last meeting in April. A presentation by staff on the .CA Anycast DNS service will follow later during the meeting.

6.2 Report from the Compensation and Review Committee

The Compensation and Review Committee provided their report to the Board of Directors earlier during the in-camera session.

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

The Chair of the Finance, Audit, Investment and Risk Management (FAIR) Committee reported that the Committee had met on May 27, 2014. The Committee reviewed the preliminary unaudited Q4 Financials for FY14, the Risk Management report, as well as the real estate proposal.

a. Risk Management Report

The Risk Management report was tabled at the meeting. Overall the Board of Directors was satisfied with the new format. It was noted that the report will be reviewed on an on-going basis and any suggestions for changes to the report should be sent to the Committee.

b. Investment Management Process

The Chair of the FAIR Committee provided an update on the search for an investment manager. The Committee has determined that it would be prudent to retain an investment consultant to assist with the Request for Proposal process to engage an Investment Manager. The process to recruit an investment consultant is underway.

c. Update on the Office Space

The Board of Directors held an in-camera session to discuss the real estate recommendation from staff.

Following the in-camera session, on recommendation of the FAIR Committee and on motion made and duly seconded, it was resolved to adopt a lease negotiation strategy as management deems appropriate, focussing on the preferred option, with the objective to finalize a new lease agreement prior to July 31, 2014; and to terminate CIRA’s current lease once a new lease agreement has been executed.

(Moved: R. Liang, seconded: K. Brown, unanimously carried)

6.4 Report from the Governance Committee

The Chair of the Governance Committee reported that the Committee had met several times in the past month to formalize the formation of the Nomination Committee and to approve the Board Diversity report. At the meeting the previous day, the Committee had reviewed the Board and Committee Effectiveness annual survey process. The meeting had also reviewed certain corporate policies and authorized staff to prepare a revised Directors Code of Conduct and Policy on Conflicts of Interest incorporating elements of the current Financial Association between Directors policy. Finally, in the context of the annual review of committee mandates, Committee Chairs will be asked to review their respective committee mandates and forward proposed modifications to the Chair of the Governance Committee.

J. Austin joined the meeting

6.5 Report from the Community Investment Committee

The Chair of the Community Investment Committee reported that he had received some feedback on the Community Investment Program from Committee members and a report would be provided to the Board of Directors at its September meeting.

7. Update on Community Investment Program

a. Post –mortem

Staff reported that overall the Community Investment Program was extremely successful and far more applications had been received that initially thought, including 149 applications for $7.975M. The program resulted in 29 applications being approved for funding for a total disbursement of $1.264M. The public announcement, supported by three-pronged media blitz began on May 30, 2014.

Management reported on the strengths and weakness of the program in its first year of operation. The difficulties that had been encountered and measures taken to address these were explained to the meeting. For example, email and spam-blocking issues, since resolved, had posed problems both at CIRA and also for applicants. The process used to steer files through to completion had been reviewed and changes will be implemented next year. On the positive side, applicants had praised the quality and clarity of the application material, including the guidelines document.

The Chair of the Community Investment Committee reported that the Committee members had provided some suggestions for improvement. Concern was raised regarding how to address the expected number of applications in the next round, especially as the awareness of the program increases.

There was some discussion regarding the media launch. Staff noted that the media relations would be on-going throughout the year, as the key recipients reached their milestones.

b. Budget Recommendation

As requested by the Board of Directors’ at its May 22, 2014 meeting, staff provided different budget options for the additional funding of the program needed this year.

On motion made and duly seconded, it was resolved that an incremental budget of $264K to be drawn from the accumulated surplus to offset the additional funding to the Community Investment Program in 2014 be and it is hereby approved.

(Moved: B. Sandiford, seconded: B. Gibson, unanimously carried)

J. Austin withdrew from the meeting.

M. Gaudet joined the meeting.

8. DNS Managed Services

A presentation was made to the meeting on the DNS market. Highlights noted an increase in DDOS and bandwidth attacks. Measures being considered to mitigate the DDOS attacks were explained.

The meeting discussed the potential market for a Canadian based DNS Anycast network of secondary DNS servers to mitigate the risk of these attacks affecting Canadian companies. A secondary DNS Anycast product was presented that would augment the DNS services currently offered by existing DNS service providers (for example registrars, hosting companies and ISPs). The DNS servers would be located primarily in Canada with additional performance and DDOS protection provided by nodes at select international locations. A 5 year business case on .CA Anycast DNS also formed part of the presentation.

M. Gaudet withdrew from the meeting.

9. Registrar Canadian Presence Requirements Discussion

The meeting was briefed on the policy in place governing Canadian Presence Requirements (CPR) for Registrars, a policy adopted fifteen years ago. It was noted that much has changed over the period, notably, the significant increase in the number of gTLDs and the large number of jurisdictions with no local presence requirements for Registrars.

The impact on Canadian registrants and the penetration rate for.CA in Canada, is stimulating consideration within CIRA of the advisability of making modifications to certain aspects of the CPR rules.

Discussion ensued and issues raised about the implication of a changed regulatory framework governing local presence requirements. It was agreed that staff would investigate further and report back to the Board at a later date.

10. Other Business

The Chair reminded the Board of the Committee meetings to be held during the summer.

11. Next Meeting

The next meeting of the Board will be held in Calgary on September 16, 2014 in conjunction with the Annual General meeting.

D. Chiswell, D. Fowler, P. Havey and L. Gravel withdrew from the meeting.

12. In-Camera Session

The Board of Directors held an in camera session.

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

13. Adjournment

There being no further business, on motion by A. Escobar and seconded by L. Macdonald, the meeting was concluded at 3:00 p.m.