2020/11/18 Minutes

Minutes of the Meeting of the CIRA Board of Directors held via Webex on November 18, 2020 at 5:00 p.m. ET

Directors attending: Iris Almeida-Côté, Colleen Arnold, Ryan Black, Don Bowman, Andrew Escobar, Matthew Gamble, Jill Kowalchuk, Helen McDonald, Crystal Nett, Bill Sandiford, Alourdes Sully, Rob Villeneuve

Advisors: John Demco, Byron Holland, Charles Noir

Corporate Secretary: Brigitte LeBlanc-Lapointe

Recording Secretary: Lynn Gravel

Guests: Albert Chang, Paul Havey

1. Approval of Agenda

It was moved by I. Almeida-Côté and seconded by B. Sandiford that the agenda for the meeting be adopted as presented. The motion was unanimously carried.

2. Appointment of Vice-Chair

The Chair called for nominations for the Vice-Chair of the Board. After all nominations were made, a motion to close nominations for Vice-Chair was made by M. Gamble and seconded by B. Sandiford. Following the close of nominations, the Vice-Chair of the Board was appointed in accordance with s. 8.03(b) of the Amended and Restated Bylaw No.1.

Be it resolved that the Board of Directors appoints Jill Kowalchuk to the position of Vice-Chair of CIRA to hold office for a period of one year or until the next Board meeting after the expiry of such one-year period and until the successor is appointed, whichever is later or until earlier resignation or removal.

(Moved: B. Sandiford, seconded: M. Gamble, motion unanimously carried)

3. Consent Agenda

The Chair called for any items to be removed from the consent agenda for discussion.

3.1 Approval of the Draft Minutes of the September 22, 2020 Meeting

3.2 Report on Statutory Obligations

3.3 Management Report

3.4 2020 Returning Officer’s Final Report

3.5 Community Investment Program Midterm Report

3.6 Q2/FY21 Financial Report

It was therefore resolved that item 3.1 on the consent agenda be approved and the remaining items be received.

(Moved: B. Sandiford, seconded: M. Gamble, motion unanimously carried)

4. Appointment of Returning Officer

Be it resolved that the Board of Directors appoint Thomas Kriens as the Returning Officer for the 2021 Election and that the 2021 Returning Officer’s remuneration be set at $275 per hour plus any reasonable or certain out of pocket expenses as pre-approved by CIRA.

(Moved: I. Almeida-Côté, seconded: M. Gamble, motion unanimously carried)

5. Adjournment

On motion by C. Nett and seconded by M. Gamble, the meeting was adjourned at 5:35 p.m. and reconvened on November 19, 2020 at 12:00 p.m.

Minutes of the Meeting of the CIRA Board of Directors held via Webex on November 19, 2020 at 12:00 p.m. ET

Advisors: John Demco, Byron Holland, Charles Noir

Corporate Secretary: Brigitte LeBlanc-Lapointe

Recording Secretary: Lynn Gravel

Guests: Sanita Alias, Steven Barry, Findlay Beith, Albert Chang, Dave Chiswell, Andrew Fraser, Paul Havey, Rick Koeller, Jacques Latour, Julie Lepine, Tanya O’Callaghan, Paul Sarkozy, Josh Tabish

6. Target Operating Model Update

Staff reminded the Board that several years ago, with the decline in new domain name registrations, CIRA had explored which business areas, products and services to evaluate to support a product diversification strategy. In 2015-2016, CIRA decided to make important foundational investments that support CIRA’s existing business: the Registry platform and the security, stability and resiliency of CIRA’s DNS. Through the last strategic plan (FY17-20), CIRA continued to build the functionality and features of the fungible Registry and DNS business lines. Among other changes, the organization also introduced complementary products and services in cybersecurity.

Staff noted that in the FY21-25 Strategic Plan, CIRA plans to extend the .CA registration business, and maintain and improve its overall financial sustainability, while maximizing mission impact. Staff noted that the initial focus will be on improving the gross and contribution margins in both .CA and the diversified services portfolios. Staff noted that CIRA utilizes the concept of a Target Operating Model (“TOM”) to assess the progress towards achieving the strategic objectives and measure the financial sustainability for the overall CIRA operations. Staff outlined various Strategic Plan objections, including annual revenues from diversified services.

Staff referred the Board to the FY21 budgeted TOM targets in respect of the Statement of Operations. Staff noted the five (5) distinct measurement categories that reflect the overall TOM, with three (3) distinct portfolios. The diversified services business unit includes six (6) revenue generating services. Staff noted that on an overall basis, Diversified Services surpassed revenue expectations in each of the last two (2) years. With business scaling, corresponding increases in revenues and by managing and controlling costs, staff anticipate improving the financial sustainability of the Diversified Services portfolio in terms of gross margin (“GM”) and contribution margin (“CM”) over time. Staff noted that all products inside Diversified Services are highly scalable and continue to expand. Staff reported on the segmented performance of the domestic and international activities. Staff noted that the international segment was outperforming the domestic activities. It was further noted that the international segment currently outperforms the domestic segment in terms of GM in dollars.

As a follow-up from the board meeting held on September 22, 2020, where Staff provided an illustration of Actuals-to-Budget on a TOM basis for Diversified Services, Staff tabled a preliminary FY21 Year End Expectancy (YEE) for all measurements. Management stated that the implementation of the Target Operating Model has begun to evolve the perspective of business owners, budget holders and Staff towards maximizing mission impact but with more of a sustainability focus.

Questions and discussion followed regarding the longer-term targets for the overall organization and how the individual TOM results can vary based upon the life cycle of certain services. Staff noted that as part of the FY22 budget planning, Staff will share again the FY23 aspirational TOM targets ranges for the mid-strategic plan. Staff will also revisit the Mission Money Matrix (“MMM”) framework as part of the planning process.

Overall, the Board was satisfied with the targets and steps taken so far. Staff will continue the discussion with the Services Strategy Committee and/or Finance, Audit, Investment and Risk Management (“FAIR”) Committee, as appropriate.

7. Risk and Appetite Statements

Staff presented the risk appetite and tolerance statements on the .CA Stewardship and Product Expansion portfolios based upon the discussion and feedback received from the Board at its meeting in June, 2020. Staff was seeking Board feedback and approval on the revised statements.

Staff also presented proposed risk parameters for the remaining three (3) risk appetite areas: Organizational Enablement; Community Investment; and Financial Risk. Staff was recommending a balanced approach and also seeking feedback from the Board on areas into which the organization does not want to venture. The Board identified and discussed amendments to each of the risk appetite areas. There was also discussion regarding the strategic financial risks, specifically the Statement of Investment Policy & Procedures (“SIPP”). Following discussion, it was noted that the FAIR Committee may choose to re-examine the investment vehicles under the SIPP to ensure the Board is comfortable that the mix reflects the stated investment objective and balanced risk profile.

Staff will revise the statements and amend the risk parameters based on the Board’s feedback. The statements will then be circulated to the Board for review and further comments with the goal of obtaining Board approval of the risk statements.

F. Beith, R. Koeller and T. O’Callaghan withdrew from the meeting.

J. Lepine joined the meeting.

8. Debrief on Annual General Meeting

Staff provided an assessment of CIRA’s first ever all-virtual annual general meeting (“AGM”) and a summary of the lessons learned. The report was tabled and discussed at the meeting.

The Board provided additional comments such as adopting a more user friendly technological solution. Other comments included adopting and providing the rules of order to the members in advance of the meeting, showing all the questions that come in from members, and displaying the vote results on screen. There was discussion on the focus of the AGM, and Staff noted the importance of having compelling guest speakers to encourage strong member attendance. Overall, the Board supported Staff’s recommendations and it was agreed that the Governance Committee would look at the evolving best practices around virtual annual general meetings.

9. Member Communication

The report was tabled and discussed at the meeting. Staff provided an overview of the circumstances and conditions under which a member may receive the CIRA Member list and what information is provided therein. There was discussion on balancing requirements under the Canada Not-for-profit Corporations Act and privacy legislation, including whether a member could opt out of having their email address in the Members list. Staff noted that there are differing views as to what would be permissible under the Canada Not-for-profit Corporations Act to allow members to opt out of having their email address in the Members’ List.

After further discussion, it was agreed that no changes would be made at this point to CIRA’s process in respect of requests made for the Member list in accordance with the Canada Not-for-profit Corporations Act. In the meantime, Staff will provide more details on its website regarding requests for the Members list and would continue to monitor best practices and any evolving trends.

J. Lepine withdrew from the meeting

10. Salary Disclosures / AGM Motion

The Board discussed the several options that they could take in response to the motions contained in the Member proposal at this year’s AGM. It was agreed that a Committee of the Board would look further at best practices and evolving trends and report back to the Board and the membership.

A. Chang and J. Tabish withdrew from the meeting.

11. Other Business

11.1 2020-2022 Corporate Calendar

The proposed schedule of Board meetings for the upcoming year was accepted as presented.

11.2 Committee Membership

CIRA’s Board Committee Membership for FY20-21 shall be as follows:

Community Investment (CIC)

Jill Kowalchuk (co-chair)

Bill Sandiford (co-chair)

Iris Almeida-Côté

Matt Gamble

Governance