Preliminary Report | Special Meeting of the PTI Board | 26 June 2017

Formal Minutes are still to be approved by the PTI Board.

Note: This has not been approved by the PTI Board and does not constitute minutes but does provide a preliminary attempt setting forth the unapproved reporting of the resolutions from that meeting. Details on voting and abstentions will be provided in the Minutes, when approved at a future meeting.

NOTE ON ADDITIONAL INFORMATION INCLUDED WITHIN PRELIMINARY REPORT – ON RATIONALES – Where available, a draft Rationale for each of the Board’s actions is presented under the associated Resolution. A draft Rationale is not final until approved with the minutes of the Board meeting.

A Special Meeting of the PTI Board of Directors was held in Johannesburg, South Africa on 26 June 2017 at 1:00 pm local time.

Jonathan Robinson, Chair of the PTI Board, promptly called the meeting to order.

In addition to the Chair, the following Directors participated in all or part of the meeting: Akram Atallah, David Conrad, Lise Fuhr and Elise Gerich (PTI President).

Secretary: Samantha Eisner (PTI Secretary).

The following Officers, Executives and Staff participated in all or part of the meeting: Xavier Calvez (Chief Financial Officer (ICANN)); John Jeffrey (General Counsel and Secretary (ICANN)); Melissa King (Vice President, Board Operations (ICANN)); Vinciane Koeningsfeld (Board Operations Content Manager (ICANN)); Becky Nash (PTI Treasurer); Wendy Profit (Board Operations Specialist (ICANN)).

This is a Preliminary Report of the Regular Meeting of the PTI Board, which took place on 26 June 2017.

1. Approval of Minutes
2. Review of Open Action Items
3. Operations Update
4. Finance Update
5. Modification of PTI Audit Committee Charter
   • RATIONALE FOR RESOLUTIONS PTI201706.26.02-03:
6. Administrative/Legal Updates
7. Replacement of PTI President
8. Any Other Business

1. Approval of Minutes

   The PTI Board took the following action:

   Resolved (PTI2017.06.26.01), the Board approves the minutes of the 6 April 2017 Special Meeting of the PTI Board.

2. Review of Open Action Items

   The Chair led a review of action items identified at the prior meeting and the status of each.

3. Operations Update

   The PTI President provided an update to the Board on the status of major technical projects ongoing within PTI, as well as updates on PTI’s satisfactory compliance with its Service Level Agreements with the Operating Communities. The PTI President also provided an update on PTI’s staffing.

4. Finance Update

   The PTI Treasurer provided an update on PTI’s financial position as of the quarter ending 31 March 2017, the last quarter for which financials were available. The PTI Treasurer also updated the Board on the adoption of the FY18 IANA Budget by the ICANN Board on 24 June 2017, and noted that the FY19 PTI Budget was already in planning stages to meet the Bylaws-mandated timelines. The PTI President updated the Board on the consultations taking place for that FY19 Budget Planning Process.

5. Modification of PTI Audit Committee Charter

   The PTI Secretary discussed the status of the PTI Audit Committee and the need to update the charter to allow for the occurrence of when there is no community-selected director sufficiently independent to serve on the Committee. The PTI Board discussed some alternative paths forward, as well as a plan to interview potential candidates to serve as an independent member of the Audit Committee.

   The Board took the following action:

   Whereas, the PTI Board must confirm that there is sufficient independence among members of the Audit Committee to meet California statutory requirements.

   Whereas, under California law, Audit Committees may include non-Directors as voting members.

   Resolved (PTI2017.06.26.02), the PTI Board approves the revised Audit Committee Charter that will allow for the appointment of a non-Director voting member to serve on the Audit Committee when neither of the community-selected PTI Board Directors has the appropriate level of independence to serve on the Audit Committee.

   Resolved(PTI2017.06.26.03), the PTI Board directs the PTI President or her designee to coordinate conversations with potential candidates with financial expertise to serve as the non-Director voting member of the Audit Committee during this time when neither community-selected Director may serve on the Audit Committee.

   RATIONALE FOR RESOLUTIONS PTI201706.26.02-03:

   California law requires that audit committees not have members that “have a material financial interest in any entity doing business with the corporation.” While independence can exist for those who are employed by ICANN (but not PTI), the two community-selected Directors each have interests in registries that do business with PTI such that they cannot be considered independent. As a result, the PTI Audit Committee cannot be properly comprised under the current Charter composition. 

   California law also allows an organization to appoint a non-Director to serve as a voting member of the Audit Committee as a way to address the need for independence. Today’s action allows PTI to use this independent Audit Committee member as a way to comprise its Audit Committee. This tool will only be available when needed, that is when neither community-nominated Director has sufficient independence to serve on the Audit Committee. The independent member will serve in the community-nominated Director’s stead, and would balance the presence of ICANN-selected Directors on the Audit Committee.

6. Administrative/Legal Updates

   The PTI Secretary updated the Board on the status of PTI’s application for tax-exempt status from the U.S. government.

7. Replacement of PTI President

   Akram Atallah provided an update to the Board on the status of the search for a replacement for PTI’s President, following Elise Gerich’s announcement that she is leaving PTI and ICANN in October 2017.

8. Any Other Business

   The PTI Board discussed the need to revisit the upcoming meeting schedule to better align it with the quarterly cadence of financial reporting.

   The Chair then called the meeting to a close.