auDA latest — all quiet on the western front (for now, at least)

By LAURIE PATTON | 3 July 2018

As I’ve written previously, the Australian Government has given auDA – the company managing our Internet domain names – three months to develop new processes to redress historical weaknesses in its governance. The organisation has been mired in controversy in recent years. For quite some time, though, it had been seen as a tightly held fiefdom under the control of a board of directors elected from within the industry and fraught with conflicts of interest.

auDA brought in a team of external facilitators to run a member consultation session. Only about a dozen people showed up in person and about the same number attended online. This suggests to me that claims of widespread disquiet among the auDA constituency might be a tad overblown.

One of the in-person attendees staged a short-lived insurgency, demanding to have on-the-spot assurances auDA would take seriously the work of the group and threatening to leave. The facilitators deftly diffused the situation, with the assistance of another attendee who diplomatically suggested the recalcitrant just calm down. He stayed and actually contributed constructively.

In the end, a very civil process led to what looked like an outcome palatable to most, if not all, the participants – and I suspect to the broader membership. In summary, the clearly preferred future membership structure would involve a “Single Member Class Model…through which any individual, corporate, or institution could join with equal weighting”. The membership would collectively elect a certain number of board directors, yet to be determined.

The Government has laid down some non-negotiable requirements for the new governance regime. One of these is a majority of independent directors on the board. Thus, irrespective of how they are determined, the member-elected directors will not be able to capture control of the board – another one of the requirements for satisfying the Government.

An important issue that indirectly arose as we discussed the proposed changes was the need for some to better understand a key provision of the corporations laws. Irrespective of how they are appointed, or by whom they are nominated, all directors are required to act in the best interests of the company. They are not there to represent, or advocate, the specific interests of their nominator. As I have also previously written, there is a clear case for mandatory governance training in the NFP sector.

Perhaps the most revealing and for me the most disturbing aspect of this somewhat fetid saga is that nobody can tell me what, exactly, is wrong with the current processes by which people acquire a domain name. Nobody!

It seems to me that what we are dealing with here is a battle for board control overlayed with a matrix of long-standing interpersonal grievances. No wonder the Communications department concluded that auDA is not currently fit for purpose. However, it strains credulity to suggest that this situation has only recently developed. Certainly from what others with a longer involvement with auDA tell me.

According to the facilitators of yesterday’s session there will be further consultations before the auDA board takes a reform proposal to the Government. In the meantime, there’s a Special General Meeting scheduled for 27 July 2018. Brought on by a call from a dissident group called the Grumpies, it will see resolutions put seeking a partial board spill. It seems unlikely they’ll succeed, but in any case the result is moot given that the current board will be replaced (or voted back) once the new regime is in place. Common sense says it would have been altogether preferable if the Grumpies had agreed to call off the SGM and saved the members’ money rather than simply create more controversy.

[Postscript: The one Grumpy who attended the event failed to shed any light on what they think is wrong with the way domain names are currently allocated. The Grumpies have so far failed to answer the questions posed in this article. One of their complaints is regarding so-called “direct registration” of .au domains. Ironically, this proposal was raised by a previous board and the current auDA chair, Chris Leptos, has advised members that no decision will be taken on the matter until the second half of 2019, at the earliest. ]

(Laurie Patton is a member of auDA and the former CEO / Executive Director of Internet Australia. He is currently advising Afilias Australia, the company that took over the management of the .au registry for auDA from 1 July 2018. However, the views expressed here are his own and have not been endorsed by Afilias.)