Staff Contribution To Forum Dialogue On Community-Recommended GNSO Operating Procedures
As noted in the Public Comment Forum Box for this proceeding, the ICANN Policy Staff has been asked by GNSO Council members to prepare an analysis of how potential Council votes would be tabulated based on different treatments of Councilor voting abstentions and to provide that analysis as a submission to this comment forum. Accompanying this message please find an analysis prepared by Ken Bour, Policy Consultant to ICANN Staff, and an accompanying Appendix 1 - GNSO Council Voting Matrix. Mr. Bour's analysis also includes a thorough discussion of potential conflicts of interest regarding GNSO Council votes and proposals for future consideration of that topic by the GNSO Council Operations Work Team (the team responsible for the original operating procedure recommendations). Comments on Mr. Bour's analysis and suggestions as well as the accompanying matrix are welcome and encouraged. The full text of the analysis document and the voting matrix are also set forth below in email format. Please send a message to policy-staff@xxxxxxxxx if you have difficulty opening the attachments to this message or reading the email text below. I will be happy to directly email you a copy of Mr. Bour's analysis. Robert Hoggarth Senior Policy Director Subject: Recommended Approach for Defining and Handling Material Conflicts of Interest and Abstentions Related to GNSO Council Voting Prepared by: Ken Bour, Policy Consultant to ICANN Staff Date: 13 October 2009 Introduction: The purpose of this paper is to review the implications of abstentions and, more specifically, conflicts of interest, on GNSO Council voting. The material is organized as follows: · Review of Recommended Voting Procedures and Issue Statement: * Abstentions and Alternative Voting Approaches - The Conflict of Interest: * Discussion - Types of Abstentions and Applicability to Conflicts of Interest: * A Way Forward - Potential Addition/Modification to New GNSO Operating Procedures: The last section includes a set of recommendations that prescribe methods and procedures for dealing with various conflict and abstention situations as well as their affects upon GNSO Council voting calculations. The GNSO Council Operations Work Team (GCOT), currently responsible for the GNSO Operating Procedures, is invited to review these recommendations for possible incorporation into the next iteration of that document. Review of Recommended Voting Procedures and Issue Statement: The current version of the GNSO Operating Procedures, published for public comment through 16 October 2009, contains the following suggested language (Section 4.2) related to voting and abstentions: "Unless otherwise specified in these procedures or in the ICANN Bylaws, to pass a motion or other action, greater than 50% of the eligible voters in each House must cast affirmative votes. For all votes taken, the number of eligible voters in each House shall be fixed to the number of seats allocated in the Bylaws (a.k.a. the denominator) and is not affected by the number of members present or absent at the meeting in which the motion or other action is initiated. Council members are permitted to abstain in any vote, but must provide a reason which shall be recorded in the minutes along with the abstention." Two elements in the above paragraph bear additional explanation: 1. Affirmative Voting: Section 4.2 of the recommendations specifies that a successful GNSO Council vote requires a minimum number or percentage of "Yes" votes. A GNSO Voting Results Table has been prepared (see Appendix 1) that itemizes all voting thresholds that have been defined to date. The table provides the actual number of minimum "Yes" votes required in each House to pass a measure. To use an example, the election of the GNSO Council Chair requires greater than 60% affirmative votes in both Houses (see Voting Matrix, row 6). Notice that the table actually displays the minimum number of "Yes" votes required as 5 in the Contracted Parties House and 8 in the Non-Contracted Parties House. If an actual vote tally for GNSO Council Chair resulted in 4 and 9 Yes votes, respectively, the measure would fail under the current rules because the Contracted Parties House did not record more than 60% "Yes" votes based on the size of its eligible voter pool (7). 2. 2) Fixed Denominator: Section 4.2 of the recommendations also specifies that the eligible number of voters in each House is a constant and does not vary for any reason when tabulating voting results. To continue with the above example, assume that, of the 7 eligible members of the Contracted Parties House, three failed to vote in the hypothetical GNSO Council Chair election. Under the recommended rules, as long as a quorum exists at the time the vote is initiated, the reason for not casting a vote is immaterial (e.g. abstention, absent, recusal) because only "Yes" votes are counted toward passing any measure. In the Chair vote example above, the three non-votes do not change the threshold for passage, which still requires at least 5 affirmative votes in that House to elect the GNSO Council Chair. Under the recommended operating procedures, although permissible with an explanation, abstentions do not have any effect upon the minimum affirmative votes required to pass a measure. In essence, any "non-Yes" vote, regardless of the reason, does not contribute toward enabling a motion or action to pass. Abstentions and Alternative Voting Approaches - The Conflict of Interest: During community discussions prior to posting the recommended operating procedures for public review and comment, a question arose as to whether abstentions in general - and those arising from a Conflict of Interest (COI) in particular - should be treated differently than currently recommended in Section 4.2. The remainder of this paper explores those issues and offers information regarding potential solutions for recognizing and handling abstentions, especially under the circumstances of a material COI. The Impact of Abstentions: The reorganized GNSO Council is comprised of a relatively small body: two houses with 7 and 13 voting members respectively. Its elected representatives have high ethical standards and take their responsibilities seriously, so they will, at times, encounter circumstances when it may appear appropriate to abstain from voting. Depending upon how abstentions are defined and handled, it is possible that an even smaller number of individuals would be required to make important decisions affecting GNSO governance. Consider the following hypothetical voting circumstances for which two alternative calculations will be made to illustrate the type of effect that different arithmetic formulas can have on the outcome. The Registries Stakeholder Group (SG) supports a motion to approve a PDP that is out-of-scope (see row 3 in the Appendix 1 table). After internal discussions and canvassing members, the Non-Contracted Parties House can only produce a simple majority in favor of this action (i.e., 7 "Yes" vote out of 13). The Registrars and the voting Nominating Committee Appointee (NCA) in the Contracted Parties House are not expressly in favor and will not vote "Yes", but they are not so strongly opposed to the action as to vote "No." The Registries Councilors (3) convince their House colleagues to abstain. A quorum is maintained in both Houses for this scenario. Calculation 1: As discussed above, under the current rules, the abstentions have no effect and that House fails to achieve the 75% affirmative votes (or 6) to be successful. The measure does not pass. Calculation 2: Alternatively, suppose that an abstention is treated as a non-vote and, thereby, is applied to reduce both the numerator and denominator used to determine success of the motion. The four abstentions (3 registrars and the NCA) would decrease that House's voting members from 7 to 3 (new denominator). Thus, in this hypothetical scenario, only the Registry Council members, voting as a block in favor of the action, would exceed the 75% threshold needed to pass the measure in their House. Combined with the simple majority vote in the Non-Contracted Parties House the measure would succeed. Although the above circumstances were narrowly constrained and might be considered exceedingly improbable, it is not difficult to imagine other possible gaming scenarios (in either House) in which altering the denominators used to make the calculations could produce unusual outcomes for the GNSO. Discussion - Types of Abstentions and Applicability to Conflicts of Interest: According to the Institute for Local Government[2] , "The issue of when to refrain from participating in a decision is indeed a vexing one. What you are struggling with is a tension between your responsibility to participate in decisions and your desire to promote the public's trust in the integrity of those decisions. Related to the public trust issue may be a concern that you cannot be fair in a given situation." The Institute makes a useful distinction between a voluntary abstention in which the individual exercises some degree of judgment or choice about the circumstances. An involuntary abstention or, as the Institute calls it, a disqualification, results from an external judgment (e.g. law or statute) that an official has financial or other relationships that preclude him or her from participating in the decision. In this latter case, an official may not make, participate in or influence a decision that will have a foreseeable and material financial effect on the official's (or his or her immediate family's) economic interests. As the Institute points out, "Responsibility is a key component of ethical behavior. Attending and being prepared for meetings is a major element of an elected official's responsibilities and, hence, ethical behavior. So is voting in general. It may be tempting to abstain because of concerns about making an unpopular decision or simply not knowing which decision is best. As hard as some decisions are, making decisions is what you were elected to do. It is manifestly unfair - and unethical - to abstain or otherwise put your colleagues in the position of taking the heat for a necessary but unpopular decision." GNSO community dialogue prior to posting the Work Team recommendations for public review and comment gravitated toward the specific concern that a GNSO Council member might be obligated to abstain from a vote due to a direct conflict of interest. It was suggested that such cases might not be uncommon and that, in cases where a conflict resulted in an abstention, it might be inappropriate or unfair to count the abstention as a "non-vote" rather than as a "No" vote. This is clearly an issue that should be considered in more detail by the new GNSO Council. In the United States, according to the Center for Public Integrity[3], "Most states apply one of three rules when lawmakers face conflicts of interest. * The most common is simply to require that they abstain from voting. * The second most popular: Granting conflicted lawmakers explicit permission to abstain if that is their preference. Explicit permission is important because many states prohibit lawmakers from abstaining except in exceptional circumstances. * The third and least common approach is to require lawmakers to vote despite conflicts of interest." One fundamental question is how a conflict of interest should be defined. The Organisation for Economic Cooperation and Development (OECD), in its "Guidelines for Managing Conflict of Interest in the Public Service," defines conflict of interest as "a conflict between the public duties and private interests of a public official, in which the public official has private-capacity interests which could improperly influence the performance of their official duties and responsibilities."[4] This definition applies to a "real" or "actual" COI. By contrast, an "apparent" COI exists when it appears that a public official's private interest could improperly influence the performance of his/her duties, but this is not in fact the case. A "potential" COI occurs when a public official's private interests are such that a conflict might arise in the future if the official were to become involved in relevant responsibilities. In addition to the above categorizations, many organizations distinguish between conflicts of interest that are mild and those severe enough to require that officials abstain. The Center for Public Integrity notes that the vast majority of legislative bodies in the United States see no problem with a vote being cast when a legislator or a narrow group of which he or she is a member would benefit (or suffer) from a bill provided the effect is not unique to him or her. The definition of conflict of interest and abstention rules are tilted toward ensuring that legislators are not excluded from voting unless it is necessary. Those bodies balance the threat of a conflict of interest against the principle that officials have a duty to execute their voting responsibilities on every matter. A Way Forward - Potential Addition/Modification to New GNSO Operating Procedures: Because of the importance of voting by elected officials and the responsibilities associated with outcomes and decisions, many organizations differentiate between serious conflicts that would mandate or require abstention from discussion/voting and non-material conflicts or other voluntary reasons for declining to register a vote. The following recommendations outline a procedure for recognizing these distinctions and specifying under which circumstances a standard voting calculation might be altered. Working within the framework of the GNSO Council's previous procedures and traditions, the Council may wish to approve the recommended voting procedures as clarified in the "suggested substitute" language of Section 4.2 and ask the GNSO Council Operations Work Team to consider recommending additional procedures to specifically address the treatment of abstentions and Conflicts of Interest. The paragraphs that follow are offered as potential sub-sections that could be incorporated into Section 4 of the new GNSO Operating Procedures. They are numbered consecutively below for ease of reference. 1) Duty of Councilors The GNSO Council is, by design, a small number of representatives organized into two Houses comprised of 7 and 13 members respectively as prescribed in the ICANN Bylaws (reference TBD). Given its size and the voting thresholds that have been defined, it is extremely important that each Councilor vote decisively on every matter that is before the Council for action. In this regard, it is the duty of each Councilor to attend meetings, stay abreast of the technical and administrative agenda, participate in email and live discussions, ask questions that will aid in learning, and vote responsibly on all matters before the Council. 2) Voluntary Abstentions All Council voting thresholds, as described in these procedures and the ICANN Bylaws, require a certain number of affirmative votes in each House (all eligible members) in order to pass a measure. Members who voluntarily refrain from voting for any reason (see illustrative but not exhaustive list below), except due to a Material Conflict of Interest (see paragraph 3), will be recorded as having registered a "voluntary abstention." Such voluntary abstentions will not affect or influence quorum and voting calculations. In other words, the number of members required to be present for a quorum and the number of affirmative votes necessary to pass a motion are not adjusted or amended in such cases. Possible reasons for abstention might include: o Perception of being inadequately informed o Has not participated in relevant discussions o Religious or other personal principle that does not create a bona fide "Conflict of Interest" * Unavoidable absence beyond the period allowed for absentee voting While the above list identifies potential valid reasons for a voluntary abstention, it is the duty of Council Representatives to remain informed and to exercise their responsibilities to vote "Yes" or "No" and to take whatever reasonable actions are available so that voluntary abstentions are minimized to the greatest extent possible. 3) Non-Material Conflicts of Interest ICANN understands and accepts that there are certain indirect financial interests and, possibly, incentives associated with actions that affect Domain Name Policy on the Internet. Under most circumstances related to GNSO voting actions, such interests may simply be disclosed in each Councilor's required Statement and/or Declaration of Interest and would not require a formal abstention. 4) Material Conflict of Interest (MCOI): Definition Material Conflicts of Interest (MCOI) must arise from situations in which a Councilor (or family member) would be directly and materially advantaged financially or economically based upon the outcome of the decision at hand. Questions that should be asked before declaring an MCOI include: 1) Do you have an economic interest in the result of the GNSO action? 2) Is your economic interest directly involved in the decision? 3) Are the financial impacts on your economic interests considered important (material) enough to trigger a conflict? 4) Is it reasonably foreseeable (substantially likely) the decision will result in one or more of the materiality standards being met for one or more of your economic interests? 5) Is the decision's effect on your economic interest different from the effect on the general public? The following are some scenarios where MCOI disclosure might be appropriate: o Long-term paid consulting (six days full-time work or more in a six month period with a single organization) o Any consulting compensated with equity (shares of stock, stock options, or other forms of corporate equity) o Decision-making role/responsibility in an organization that would materially benefit from the outcome of the action (e.g. Board membership) o Position on publicly visible advisory bodies, even if no decision making authority is involved. o Consulting related to Internet policy litigation, including serving as an expert witness in such litigation. For the purposes of this policy, consulting is any work done in an Internet-related field in exchange for financial compensation. The following activities do not give rise to an MCOI under this policy: o Honoraria for speaking or writing engagements o Short-term consulting engagements (five days or less in a six month period) 5) Material Conflict of Interest (MCOI) Procedures A Councilor who believes that his or her action (participation/voting) involving a measure before the Council would result in an MCOI is required to follow these procedures: o Document the circumstances that give rise to the MCOI and provide that statement to the GNSO Secretariat. o Seek all reasonable means to eliminate the conflict: · If representing a SG or Constituency, appeal to that organization's leadership to survey its members and direct how the vote on the conflicting issue shall be entered; · If an NCA, request permission of the Council to allow the non-voting NCA to vote on the matter in place of the conflicted Councilor. o If the conflict cannot be avoided after pursuing reasonable means available, then the Councilor may request permission to refrain from voting by entering an Abstain-MCOI, which shall not affect quorum calculations; however, it will reduce the numerator and denominator by one in any vote tabulations for the affected House (see example below). o Because of the potential affect that changing the denominator may have on whether GNSO actions pass or fail, each Abstain-MCOI must be approved by majority vote of the opposite House in order to be entered by the requesting Councilor. o If an Abstain-MCOI is approved, that Councilor shall not participate in discussions or otherwise attempt to influence other Council members nor shall he/she vote on any action attendant to the matter for which the conflict is present. Example Assumptions: o The GNSO Council is voting to approve a PDP out-of-scope o Prior to the actual vote, the Non-Contracted Parties House has only 7 members (or a simple majority) indicating that they intend to vote in favor of this motion. o To pass the measure under these conditions, the voting threshold requires that the Contracted Parties House achieve greater than 75% or at least 6 affirmative votes out of 7. o That House has one Councilor who is requesting formal abstention due to an MCOI. After documenting the circumstances, the GNSO Secretariat calls for a vote to approve this request by the Non-Contracted Parties House. A vote is subsequently taken and the request is approved by a majority of that House. Effect: For this specific motion, the eligible number of voters (a.k.a. denominator) in the Contracted Parties House for this specific vote is reduced by 1 from 7 to 6. Since 75% of 6 is 4, only 5 votes (vs. 6 normally) are now required to pass the measure. Assuming the 7 votes (a majority) in the other House are sustained and the Contracted Parties House produces 5 votes in favor, the measure succeeds. **END** ________________________________ [1] The "suggested" language was included in the recommended procedures posted for public comment to clarify the original language recommended to the GNSO Council by the GNSO Council Operations Work Team. That original language reads: "To pass, a motion must attain a majority of the votes cast in each house unless otherwise specified in these procedures or in the ICANN Bylaws. Abstentions count as votes cast and shall include a reason for the abstention. This has the effect of making an abstention count the same as a vote against except as described in ICANN Bylaws, ANNEX A, GNSO Policy-Development Process, Section 3, Initiation of PDP <http://www.icann.org/en/general/bylaws.htm#AnnexA-3> ." [2] http://www.cacities.org/resource_files/28019.Everyday%20Ethics%20Dec02(disqualification).pdf [3]http://projects.publicintegrity.org/oi/default.aspx?act=voting [4]http://browse.oecdbookshop.org/oecd/pdfs/browseit/4204021E.PDF GNSO Council Voting Matrix Table Motion Threshold Contracted Parties House: (3.3.1) Conj. Non-Contracted Parties House: (6.6.1) Create Issues Report > 25% Both (or) > 50% One 2 4 AND OR 4 7 Initiate PDP Within Scope > 33% Both (or) > 66% One 3 5 AND OR 5 9 Initiate PDP Out-of-Scope > 75% One (and) > 50% One 6 7 AND (or) AND 7 10 Approve PDP w/o GNSO Super Majority > 50% Both(*) 4 AND 7 Approve PDP with GNSO Super Majority (#) > 75% One (and) > 50% One 6 4 AND AND 7 10 Elect GNSO Chair > 60% Both 5 AND 8 Elect Vice-Chair Each House > 50% One 4 OR 7 Elect Board Seat 13 > 50% One 4 Elect Board Seat 14 > 50% One 7 Remove NCA Each House > 75% One 6 OR 10 Remove Council-Level NCA > 75% Both 6 AND 10 All Other > 50% Both 4 AND 7 (*) Requires that one GNSO Council member representative of at least 3 of the 4 Stakeholder Groups supports the Recommendation (#) Also serves to approve a PDP Recommendation imposing new obligations on certain Contracting Parties. # # # Attachment:
Defining and Handling Material Conflicts of Interest and Abstentions Related to GNSO Council Voting.doc Attachment:
Appendix 1 - GNSO Council Voting Matrix Table.doc |