Minutes of Board Meeting No. 27

17 Jun 2002, Arlington, VA, United States

Author(s): C. Huitema
Date: 2002-06-17
Committee: BOT
Document: 00-27
Revision: 0
Supersedes:
Status: Unconfirmed
Maintainer:
Access: Unrestricted

Minutes taken by Christian Huitema.

The following members of the board of trustees attended the meeting in person:

Christine Maxwell
Barbara Fraser
Manuel Sanroma
Rosa Delgado
Brian Carpenter
Lynn St-Amour
Kees Neggers
Latif Ladid
Don Heath
Martin Burack
Alan Greenberg
George Sadowsky
John Gage
Wawa Ngenge and Tarek Kamel attended by telephone.

Srisakdi Charmonman was excused.

I. Introduction

Brian Carpenter welcomes the participants, and recalls our reliance on Robert’s rules.

II. Approval of the minutes of the 25th meeting

The minutes of the 25th meeting were circulated to the board and reviewed by e-mail. The minutes are approved.

III. Confirmation of electronic votes

Eight resolutions were approved by electronic votes, and must be confirmed at this face to face meeting.

A block vote on the following resolution is approved by all trustees present:

Resolution 02-1 Congratulating Tomaz Kalin, George Sadowsky, and Mike Todd
RESOLVED that The Board expresses its appreciation for their service as Vice Presidents to Tomaz Kalin (Chapters), George Sadowsky (Education), and Mike Todd (Individual Membership).

Resolution 02-3 Defining membership of the Elections Committee
RESOLVED that Don Heath and George Sadowsky be approved as members of the 2002 elections committee.

Resolution 02-4 Confirmation of nominations of IAB members
RESOLVED, that the Board of Trustees confirms the appointment of the following individuals to serve on the IAB, as advised by the IETF Nominations Committee: Leslie Daigle, Ted Hardie, Charlie Kaufman, James Kempf, Mike St. Johns, and Eric Rescorla.

Resolution 02-5 Nomination of Jim Galvin as VP for chapters and IM
RESOLVED, that the Board of Trustees ratifies the appointment of Jim Galvin to the position of VP – Chapters and Individual Membership

Resolution 02-6 Procedures for the IAB/IETF selection of Trustees for the Board
RESOLVED, that the Board of Trustees ratifies the following procedures for the IAB/IETF selection of Trustees for the Board (the dates in parenthesis are those for the 2002 process):

• There will be an open call to the IETF community mailing list requesting nominations (March 12-April 1);
• The IAB will select Trustee(s) from the pool of nominees (no later than May 13);
• The IESG will confirm the selection(s) (no later than May 20);
• ISOC will be notified of the selection(s) (no later than May 28).

Resolution 02-9 Nomination of Philippe Courtot to the Board of Trustees
RESOLVED, that the ISOC Board of Trustees appoints Philippe Courtot as a Trustee for a nominal term of one year, commencing at the adjournment of the next regularly scheduled Board meeting following the completion of the 2002 Election process and ending at the adjournment of the equivalent meeting in 2003.

Resolution 02-2 is put to a separate vote. Voting for are Christine Maxwell, Barbara Fraser, Manuel Sanroma, Rosa Delgado, Brian Carpenter, Kees Neggers, Latif Ladid, Don Heath, Martin Burack, John Gage, Alan Greenberg, George Sadowsky and Tarek Kamel. Wawa Ngenge vote against. The amended resolution is approved.

Resolution 02-2 Adopting the draft governance procedures
RESOLVED that the revised draft governance procedures circulated to the Board by Alan Greenberg on 16 February 2002 be adopted as the basis for this year’s Trustee elections and appointments, subject to revision and ratification in the June 2002 Board meeting.

Resolution 02-8 is put to a separate vote. Voting for are Christine Maxwell, Barbara Fraser, Manuel Sanroma, Rosa Delgado, Brian Carpenter, Kees Neggers, Latif Ladid, John Gage, Don Heath and Tarek Kamel. Voting against are Martin Burack, Alan Greenberg, George Sadowsky and Wawa Ngenge. The resolution is approved.

Resolution 02-8 Clarification of individual membership issues
RESOLVED, that in addition to Global membership offered free of charge, the Internet Society will continue to offer individual memberships in the $75-$500 range. Annual reminders will be sent to these members asking them to continue their support at their existing or higher level. However, since no additional services are attached to these higher levels, the payments are treated as donations and not dues payments.

As a consequence of the vote of resolutions 02-5 and 02-9, Brian welcomes Jim Galvin as VP of chapters, and Phillipe Courtot as a member of the new board.

IV. Resolution of a conflict of interest allegation

There was a point raised during the previous meeting of the Board that George’s participation to another non-profit organization, GIPI, might be a conflict of interest. Inquiry with our lawyers showed that such participation was not in fact a conflict of interest. George wanted that the board confirms the absence of conflict of interest. A motion was proposed by George and seconded by Latif. The motion was approved by 13 votes; Christine Maxwell abstains.

Resolution 02-10, Dismissal of accusation against George Sadowsky.
RESOLVED, that the charges expressed at the December 2001 Board meeting regarding possible conflict of interest or abrogation of fiduciary responsibility with respect to ISOC on the part of George Sadowsky are without merit.

Brian suggests that any further accusation of conflict of interest should be presented in advance, to allow time for a proper defense, and that the matter should be treated in an executive session.

V. Financial report.

Mike Conn, treasurer, presents the financial report. The auditors found ISOC financial procedures and records satisfactory, which for Mike speaks to the credit of Lynn St.Amour’s hard work, despite severe budget constraints. The certification of the December 31 2001 financial statement was delayed until resolution of a dispute. The auditors found that the Internet Society was still in a critical condition, with liabilities exceeding assets by $269,575. However, there was a sizeable surplus in 2001, and the financial status of the society has improved markedly. The clear recommendation is to continue to manage to annual financial surplus.

The history of ISOC shows that there were slight losses in 1995, 1996, 1997 when assets became negative for the first time, back to positive in 1998, and a large deficit in 1999 caused by the losses of the INET conference in San Jose plus investments in a strategic program, causing the net assets to drop negative by over $1M. There has been constant recovery since, but it will still be at least two years, maybe three, until the balance becomes positive again.

Following this presentation, Brian asserts that our goal should be to build assets of at least $1M.

VI. Approval of election procedures

Alan Greenberg, chair of the election committee, presents the procedures approved in February, and a set of urgent decisions made on the fly by the executive committee: prolongation of nomination period by 5 days, prolongation of petition period 2d, delay of final slate release 1d. We assigned a weight of 1 to start-up members. We also realized that there was a possibility of a tie, and the election chair wanted a procedure to deal with a tie, i.e. to use a random draw in case of a tie. Alan proposes that we approve these changes, George approves. Brian comments that approving these changes effectively is an approval of this year’s election process; however, it is clear that we need to take into account this year’s observation into design procedures for the next years. 12 vote for, Wawa Ngenge and Tarek Kamel abstain.

Resolution 02-11 Approving Adjustments to the Elections Procedures
RESOLVED that the Board of Trustees approved the adjustments to the 2002 elections procedures extending the nomination period by 5 days and the petition period by 2 days, delaying the of final slate release by 1 day, assigning a weight of 1 to start-up members, and using a random draw in case of a tie

VII. Nomination committee report

The nomination committee had a tough job this year, as it was handling three selections: candidates for the chapter slate, the organization members slate, and also suggestion of nominations by the board. The nomination committee worked hard; the result of the election shows a good balance between candidates proposed by the nomination committee and nominations by petition.

Brian proposes a motion, that the Board thanks the committee for its work; Rosa seconds it; the motion is approved unanimously:

Resolution 02-12 Congratulating the nomination committee and its chair
RESOLVED that The Board expresses its appreciation for their service to the members of the nomination committee, Vint Cerf, Leslie Daigle, Jose Luis Pardos, Wawa Ngenge, Amy Weisenberg and Ron Weissman; and to its chair, Christine Maxwell.

VIII. Governance procedures and elections

During the December 2001 meeting, the board set up a “governance committee”, chaired by Alan Greenberg, to propose processes and transition processes for the establishment of trustees. Alan reports that the committee worked on a tight schedule, resulting in a start of the election procedure by March 5. The election process was conducted according to the following schedule:

Announce Election	Tue	05-Mar-02
Stop accepting nominations	Tue	09-Apr-02
Announce initial slate	Fri	12-Apr-02
End accepting petitions	Sun	21-Apr-02
Final slate to Elections Committee	Mon	22 -Apr-02
Mail ballots	Sun	28-Apr-02
Election day	Tue	28-May-02
Announce results	Fri	31-May-02
End receiving challenges	Mon	10-Jun-02
Reply to challenges	Mon	17-Jun-02
Annual General Meeting	Mon	17-Jun-02

For the chapters election, 50 ballots were distributed, and 27 ballots cast, 24 by e-mail, 2 on paper, and 1 both on paper and via e-mail; 2 additional ballots were received after the deadline. For the organization members election, 175 ballots were sent to 117 members, some of which have several representative; each organization could cast only one ballot. There were 71 ballots cast, including 39 by e-mail, 27 on papers, and 5 cast both on paper and by e-mail. Chapters tended to wait the end of the month to vote, while the org votes kept at about the same rate through period.

There were a few problem and glitches in the implementation of the elections, notably:

• Confusion over parallel nominations and petition processes
• Setup problems with discussion lists (omitting some candidates and Elections Committee)
• E-mail voting lists set-up problems (not affecting electorate or voting)
• No initial provision for involvement of chapter members in discussion lists
• Perceived irregularities in nominations process
• Different perceptions of the role of Trustees and Election officials with regard to their participation in election discussion lists
• Issues regarding eligibility of Organization Members and Chapters to participate in the election
• Questions of whether ballots were received

During and after the election, several protests were lodged by candidates. None resulted in formal challenges. All raised at least some valid issues that need to be addressed in the formal election procedures and Election Committee practices. We had 2 formal challenges from Stefan Probst, both of which were in fact technically invalid because he challenged under the old rules, but Lynn processed them nevertheless, and eventually responded negatively to both. Various other comments from candidates and some electors also raised valid issues that need to be addressed.

Rosa remarks that the amount of e-mail was so large that the important message may have been drowned in the volume.

Brian proposes a motion, that the Board thanks the committee for its work; Christine seconds it; the motion is approved by all trustees, except Alan who abstains:

Resolution 02-13 Congratulating the election committee and its chair
RESOLVED that The Board expresses its appreciation for their service to the members of the election committee, Don Heath and George Sadowsky, and to its chair, Alan Greenberg.

IX. President & CEO’s report

Lynn starts her report by an analysis of the evolution of ISOC’s revenues over the last 6 years, following on from Mike Conn’s earlier presentation. She comments that the revenue decreases from 1999 to 2001 reflects the evolution of our outsourcing of INET, as we gradually stopped collecting registrations and later revenues internally. 2001 results were good and beat budget. The revenues were 100K less than expected, but the expenses were cut by 195K. However, cash was extremely tight throughout the year.

The revenues per pillar show unrestricted surpluses of $169K for standards, $125K for educ, $84K for public policy, $48K for membership, for a total unrestricted surplus of $428K.

Org. Member Revenue trends: the revenues peaked in 2000 with Platinum membership and dropped slightly in 2001, following the general problems in the industry. Lynn projects a further slight decrease of revenues in 2002 but believes that this will be minimized given new member benefits we expect to introduce. INET 2001 eventually generated a surplus of $60,635; this is slightly better than break-even if we take into account indirect costs, e.g. staff time. NDSS produces a direct surplus of $20K.

At the end of 2001, the EOY cash was $419K. The unrestricted fund balance improved to -$380K representing excellent progress.

The critical period lies ahead as the seasonal nature of expenses and revenues always leaves us extremely tight over the summer.

Lynn recalls the history of ISOC since its foundation in 1992. We had some great successes, but also some significant problems: a sizeable turnover of individual members (40% per year), increasing competition from other orgs with overlapping missions, and recently the dot com bust. The governance was reformed in 1997, when the founding members gave up their board seat and their veto rights; however, there still was no representation of the org members in ISOC’s governance structure. The organization of ISOC’s activities into 4 pillars was adopted in June 2000 when the board also imposed strict financial imperatives. Reforms were clearly needed, with the goal of correcting the imbalances in our governance model, strengthening the chapters, and increasing linkages to our technical roots, as this is the basis of our organization and our purpose. The reform process started during the June 2001 meeting of the BoT in Stockholm, and was continued with decisions adopted in December 2001 in SLC. It continues today and you’ll hear a lot more about this over the course of the Board meeting.

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