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Minutes of the Meeting of the CIRA Board of Directors held at the CIRA Offices, 350 Sparks Street, Ottawa on December 10, 2008 at 9:00 a.m. Ottawa time.

Directors attending: Paul Andersen, Richard Anderson, Kerry Brown, John Demco (ex-officio), Heather Dryden (ex-officio), Christopher Goodfellow, Byron Holland (ex-officio), Ron Kawchuk, Lynne Mackan-Roy, Ross Rader, Bill Reid, Barry Shell, Rick Sutcliffe, Tom Williams

Corporate Secretary: Michael Stewart

Guests: David Fowler, Eric Lay (via teleconference) Nancy Philip, Norm Ritchie   

Regrets: J. Rybak

Recording Secretary: Lynn Gravel

1.      Approval of Agenda

The agenda was amended to change the order of certain items and to include the following items: 1) an in camera session from Legal Counsel; 2) Nomination Committee Debriefing under item 4.3.1; and 3) Board Correspondence under item 9. Other Business:

Be it resolved that the agenda be adopted with these amendments.

(Moved:  L. Mackan-Roy, seconded: R. Sutcliffe)

2.      Chair’s Remarks

P. Andersen welcomed B. Shell, in person, and thanked everyone for their time during the strategic planning session and today’s meeting.

D. Fowler, L. Gravel, N. Philip and M. Stewart withdrew from the meeting.

3.      CEO Update

The CEO and Board of Directors held an in camera session.

Following the in camera sessionFollowing the in camera session, D. Fowler, L. Gravel, N. Philip and M. Stewart rejoined the meeting.

4.      Update on Committees

4.1 Report from the Executive Committee

P. Andersen reported that the Committee had met once to discuss the agendas for the strategic planning session and the Board of Directors’ meeting. 

Members of the Executive Committee also discussed the role of the Executive Committee.  It was agreed that the Committee was effective and acted as a sounding board for the President and CEO when setting Board agendas and priorities.  R. Kawchuk communicated these views to the Governance Committee via email and requested that these comments be included in the current Governance review.

4.2 Report from the Technical Oversight Committee

R. Kawchuk reported that the Committee had met the previous day to update the new members on the projects and initiatives.  The Committee also discussed the role of the Committee and they will be formulating new terms of reference shortly and send them to the Governance Committee.

R. Rader indicated that the Governance Committee will be reviewing the terms of references for all Committees.

H. Dryden joined the meeting.

4.3 Report from the Governance Committee

R. Rader reported that the Committee had met the previous day to discuss the incremental set of revisions to the By-Law.  The report on the Governance Review will be circulated to the Board of Directors at a later date as well as the draft summary of the discussions.  Overall, the Committee had identified key areas that need further clarification and are not ready to make a final recommendation to the Board of Directors.  The Governance Committee will be meeting again before the next Board of Directors’ meeting and will be able to provide a black-lined document at this time.  R. Rader noted that the Committee had engaged  the services of R. Ford as a consultant until the completion of the By-Law review. 

R. Rader reported that the Committee had received feedback from the Chair of the Nomination Committee on means to improve the process of appointing Nomination Committee candidates.  One of the key issues was the recruiting process whereas all that is presently done for recruiting is an email is sent to the Registrant with a posting on CIRA’s website inviting people to apply.  The Committee discussed whether the Nomination Committee should expand its role beyond selecting from resumes to possibly interviewing from a short list of candidates.  The Governance Committee will follow up with staff and make the necessary changes if feasible.

The next Governance Committee meeting will focus on clarifications of key issues from the report of the Governance Review and work related to the Nomination Committee.

R. Anderson and N. Ritchie joined the meeting.

4.4 Report from the Audit Committee

R. Anderson reported that the Audit Committee had met on December 8, 2008 to review CIRA’s current investment policy.  Given the current market condition, the existing policy was considered inappropriate and prompted a review of the investment policy.

To summarize, the Committee is proposing to remove the commercial paper and corporate bond holdings to lessen the risk and any monies invested in non-government securities should be covered by the Canada Deposit Insurance Corporation (CDIC). Staff noted that they had expressed concern that the new policy was too restrictive but agreed to accept the Audit Committee’s recommendation.

The Audit Committee is also recommending that the signing and delegation of authority be revised to include the investment transactions.  Also included in the revised policy, the Investment Advisors are to be approved and appointed by the Audit Committee upon recommendation from staff.  Questions were raised as to whether the appointment of the Investment Advisors was an operational activity that therefore should be carried out by the staff rather than Audit Committee.  The Audit Committee assured the Board of Directors that this was simply a safeguard and that the Committee was overseeing the appointment. 

The Audit Committee is therefore seeking the approval from the Board of Directors on CIRA’s Investment Policy with the changes as mentioned.

5.      CIRA Investment Policy

Be it resolved that the Board of Directors approve:

  1. CIRA’s Investment Policy with the changes as mentioned above;
  2. Signing and delegation of authority to include the investment transactions; and
  3. Approval and appointment of Investment Advisors by the Audit Committee.

(Moved:  R. Anderson, seconded: R. Sutcliffe, abstaining:  R. Rader, motion carried)

R. Anderson, D. Fowler, L. Gravel, N. Philip and N. Ritchie withdrew from the meeting.

6.      Legal Update

M. Stewart and the Board of Directors held an in camera session.

Following the in camera session, D. Fowler, L. Gravel, N. Philip and N. Ritchie rejoined the meeting.

7.      Financial and Operational Updates

7.1  Report on all Statutory Obligations

B. Holland reported that all statutory payment obligations were up to date as presented in the certificate as well as the cash and investments on hand for each of the operating, restricted and reserved funds.         

7.2 Management Report     

B. Holland reported on the Registry activities up November 30, 2008.  New registrations for this fiscal year April 1, 2008 to November 30, 2008 are 232,418 compared to 197,468 registrations for the same period last year.   Registrations were slightly down in October and November 2008 and staff suspect the decline is probably related to the market conditions. 

Renewals for the period of April 1, 2008 to November 30, 2008 were at 77.5% compared to 76% for the same period last year.  The Net New Growth for the period of April 1, 2008 to November 30, 2008 was 13.3% compared to 13.7% last year.  TBR registrations increased slightly over the last quarter however TBR registrations have also declined since May 2008. 

B. Holland reported on the growth of the dot-ca and noted that the market share increased over the past quarter, taking a slight share of the dot-com and others.  The dot-com continues however to dominate the Canadian market.

B. Holland provided some statistics on the global domain names and noted that the market share for ccTLDs is increasing and the dot-com market share has been falling since 2005. As for the ccTLD Registry size, Canada places 15 out of 20 with an annual growth of 21.6%.  It was noted that these numbers are based on GDP at the end of 2007 and the effect of the global economic slowdown is not yet apparent. 

B. Holland reported on the ICANN Cairo meeting held in December 2008. Some of the topics of discussions at the meeting included transition issues from IPv4 to IPv6, IDN, BIND 10 and the new gTLD process.  CIRA also made an official announcement that, given the Kaminsky incident, it was going forward with the deployment of DNSSEC.

B. Holland noted that staff was for the most part occupied with the PRP simplification, the database restructure design and the strategic marketing framework.  Staff will be busy with the operational planning and budgeting in the next quarter as well as the website re-deisgn and Registry re-write.

P. Andersen proposed to the Board of Directors, that routine subject matters from the Management Report be sent in advance with commentaries and the report should then be tabled at the meeting.  This would allow more time to discuss strategic issues.

7.3 Review of Q2 2009 Financial Results

N. Philip presented the financial results for the period of April 1, 2008 to September 30, 2008. Revenue for the second quarter when compared to the first quarter is lower due to the summer months.  Overall, expenses in the second quarter were slightly higher than the first quarter due to the AGM in early September.

Staff will be developing, with the organizations’ various departments, monthly budgets to provide year to date information against year to date budgets.  In addition, for the next reporting period, staff would like to provide an update forecast for the year based on anticipated spending for the balance of the year.   Overall, staff is taking steps to improve the financial reporting to the Board of Directors as well as management in the near future. 

Revenue growth is at 19% for the period of April 1, 2008 to September 30, 2008 when compared to the same period last year.  Expense are only slightly higher than last year however last years numbers are slightly inflated with the one time expense of the membership authentication program which occurred in fiscal 2008.

Salaries and Benefits expenses are up from 40% of total expenses in 2008 to 47% of total expenses in 2009 due to the headcount of 40 full time employees in 2009.  Products & Media and Office & Expense have decreased compared to 2008 as membership authentication expenses were allocated to these two categories in fiscal 2008.  Other expenses are under budget due to timing. 

N. Philip reviewed the Statement of Financial Position noting that both cash and accounts payable were down mainly due to the payment of the costs incurred for the new office.  Prepaid expenses includes mostly software maintenance contracts, the largest one is a three year support contract.

7.4  Market Conditions

This item was discussed under 5. CIRA Investment Policy.

E. Lay joined the meeting via teleconference.

8.      2008 Elections – Final Report

E. Lay presented his findings and recommendations on the 2008 CIRA Board of Directors Election.  Overall, the Election process went very well, the software performed superbly for the most part and the user interface was almost foolproof. One issue did come up regarding the conflict of interest process and recommended that CIRA redesign the declaration, perhaps using a questionnaire format instead of the current form.  A number of other recommendations were made in his report and staff will be implementing most of them as discussed. 

The Board of Directors thanked Returning Officer, Eric Lay for his work and contribution during the 2008 Elections.

E. Lay withdrew from the meeting.

9.      Update and Discussion on Strategic Plan

Further to yesterday’s Strategic Planning session, Staff provided additional feedback to the discussion.  Staff proposed that the Board of Directors also consider, when adopting the Strategic Plan, the expenditure of $150,000 in the next quarter for the development of the business case for the Registry Services.  Staff noted that the draft application for the new gTLD was due mid next year and staff would be ready by March 31, 2009.  It was noted that there is a strong commitment to go down this path among staff and there are no legal or financial changes for this to happen.

For the most part, the Board of Directors were supportive of the Strategic Plan and agreed that the organizations needed diversification.  Some concerns were raised that the proposed plan might distract staff from their core responsibilities and further focus should perhaps be on internet-related activities within Canada,  as well as fulfillment of the social development mandate through CIRA Labs .  Staff reiterated that CIRA Labs was strictly a chronology issue and a plan will be developed for it in fiscal year 2010.

Be it resolved that the Board of Directors approve the Strategic Plan as presented to the Board.

(Moved:  C. Goodfellow, seconded: K. Brown, abstaining: P. Andersen, R. Rader, motion carried)

Staff will report back at the next meeting with the operational plan and budget.

P. Andersen turned the chair to L. Mackan-Roy.

J. Demco withdrew from the meeting.         

10.   Other Business

10.1 Board Correspondence

The Board of Directors reviewed a correspondence received by a Registrar regarding the Canadian Presence Requirements (CPR) for Registrars.  The correspondent was concerned that a change in the CPR policy from its original intent had changed without a formal process of review. M. Stewart confirmed that the rules for Registrars had not changed since the onset and the rules are applied fairly and impartially to all Registrars.  The Board of Directors instructed staff to respond on their behalf. 

P. Andersen took the chair.

11.   Next Meeting

The next meeting of the Board may convene an interim meeting to discuss the Governance Review and the next scheduled meeting will be held on March 17, 2009 in Ottawa.

12.   In Camera Session

The Board of Directors held an in camera session.

Following the in camera session, L. Gravel rejoined the meeting.

13.   Adjournment

There being no further business, on motion by R. Sutcliffe and seconded by R. Rader, the meeting was concluded at 2:55 p.m.