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Minutes of the Meeting of the CIRA Board of Directors held at CIRA Offices in Ottawa, on June 13, 2019 at 9:00 a.m. ET

Directors attending: Alex Beraskow, Ryan Black, Don Bowman, Andrew Escobar, Matthew Gamble, Jill Kowalchuk, Rowena Liang, Tyson Macaulay, Louise Macdonald, Helen McDonald, Bill Sandiford, Rob Villeneuve

Advisors: John Demco, Byron Holland, Pamela Miller 

Corporate Secretary: Paul Havey

Guests: Albert Chang, Dave Chiswell, David Fowler, Andrew Fraser, R. Koeller, Jacques Latour, Amanda Swain

Recording Secretary: Lynn Gravel

1.   In-Camera Session                                                    

The Board of Directors held an in camera session.

A. Chang, D. Chiswell, D. Fowler, A. Fraser, L. Gravel, B. Holland and J. Latour joined the meeting.

2.   Approval of Agenda                                             

It was moved by B. Sandiford and seconded by M. Gamble, that the agenda be approved as presented.                                      

3.   Chair’s Remarks

The Chair did not have any remarks.                                              

4.   Consent Agenda

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

4.1 Approval of the Draft Minutes of the May 15, 2019
Board of Directors’ Meeting

4.2 Report on Statutory Obligations

4.3 Preliminary Unaudited Q4-FY19 Financial Results

It was requested that the Q4/FY19 Risk Management report be moved to the regular agenda for discussion.

(Moved: R. Black, seconded: L. Macdonald, unanimously carried)

5.   Management Report                                                  

Staff reported on the current state of the domain business.  As highlighted at the February meeting, it was noted that the domain name market is showing a material decline in growth rates globally. This global trend is affecting .CA, although .CA’s growth rate has declined more slowly than other TLDs, and CIRA has historically outperformed its peers over the last couple of years.  Staff noted that the overall renewal rate for .CA remains relatively stable. 

There was discussion regarding domain and market share performance. It was noted that although domain growth is slowing for .CA as it is with other TLDs, the market share growth for .CA continues on a slow and steady upward climb over the medium to long term.  It was also highlighted that during the past few years, CIRA has deployed a brand build and promotional strategy and has increased marketing efforts for .CA.

Staff noted continued advertising support in Q1 & Q2 combined with a channel promotion that runs from June through to the end of August. It was also highlighted that the brand marketing program is being developed for launch at the end of September, which will run through to the end of March. It was noted that CIRA’s pattern of spending and launch of advertising programs is consistent with sales activity in Q3 & Q4. 

R. Koeller joined the meeting.

6.   Q4/FY19 Risk Management Report

The Board received the Q4/FY19 Risk Management report, as tabled.

A member of the Board suggested that technological obsolescence and market concentration are risks that should be considered for addition to the Risk Register and was surprised neither was present.  Staff noted that the Risk Register provided to the Board is a high-level report with only high strategic risks identified (as well as follow-up actions) and that Staff monitor the organization’s risks via a much more detailed report and supporting process.

It was agreed that a discussion of these particular elements of organizational risk would be added to the agenda at the next FAIR Committee meeting.

R. Koeller withdrew from the meeting.

7.   Committee Reports                                            

7.1 Report from Governance Committee

The Chair of the Committee reported that responses to the Request for Proposal (“RFP”) have been received for the external Corporate Secretary position, and that interviews were scheduled in early July with two consultants noting that each consultant took a different approach for their proposal pricing.

The Chair of the Committee presented the revised Director Compensation Policy.    The proposed changes addressed the compensation of Co-Chairs when a committee has Co-Chairs, and the compensation of members of ad-hoc committees when the Board creates ad-hoc committees to undertake special, time limited tasks on its behalf. The revised policy did not include any changes to the rates. The Board was satisfied with the proposed changes, although it was agreed to remove the listing of standing Committees in the Appendix so that it would not need to be updated with every name change.

It was therefore resolved that the Board of Directors approve the revised Director Compensation Policy with the noted amendment.

(Moved: D. Bowman, seconded A. Escobar, unanimously carried).    

A. Swain joined the meeting.

7.2 Report from the Market Strategy Committee

The Chair of the Committee reported that the Committee had met recently to review the product scorecard updates. The Committee had the opportunity to assess the risk continuum for several products.  There were a few questions around risk assessment but overall the Committee found the tool to be effective.

The Committee also discussed their thinking on the cost allocation exercise and the Mission Money Matrix (MMM). There was discussion on the MMM, and on areas that the Committee could pursue. Moving forward, it was noted that the Committee will prioritize the items on the list and work towards identifying new products that support CIRA’s mission.    

A question was raised regarding risk tolerance.  It was agreed that the Market Strategy Committee would provide a further update on the risk continuum at the September Board meeting, to socialize their perspective and obtain broader input from other members of the Board with the objective of ensure greater overall Board alignment with respect to the various categories of risk considered as well as appetite and tolerance.

Staff provided a brief update on the product scorecard noting the new market opportunities.

A. Swain withdrew from the meeting.                        

7.3 Report from the Community Investment Committee

The Co-Chair of the Committee noted that the overall program status was being provided to the Board for information purposes.  The Committee including independent advisors had held a review session following Round 6 of the granting program.  Some members of the Evaluation Committee felt that there should be distinct criteria and process for projects over $100K as well as requirements mandating that project outcomes be open by default, e.g. open source software, creative commons licensing. The Community Investment Committee will review and consider all the feedback received and implement improvements, as required.  

It was also noted that the Committee met the previous day to discuss the overall Community Investment Program strategy and execution plan for the program.  The Committee is working towards refining the granting criteria and developing metrics for evaluating the program. The Committee will present the first draft of the Execution Plan to the Board for input in September. The final draft of the Strategy and Execution Plan will be presented to the Board for approval at the November Board meeting.

7.4 Report from Finance, Audit, Investment and Risk Management Committee

The Chair of the Committee noted that the Committee had met recently with the Investment Manager to review CIRA’s Statement of Investment Policies & Procedures (SIPP) as required annually, and to discuss changes to the SIPP. It was noted that the Investment Manager was recommending a change in the investment vehicles, and a change in the asset mix range, specifically, an increase to the Mortgage asset allocation and to the types of mortgages included, which would result in a higher level of funds invested in a more diversified Mortgage portfolio, in order to improve the overall portfolio risk and return profile while maintaining the appropriate level of liquidity.

There was also discussion within the Board as to whether this change increased risk unnecessarily at the expense of preservation of capital.  In particular, the concern raised was whether the proposed mortgage diversification was more risky and speculative than indicated by the Investment Manager.

The Committee Chair noted that he FAIR Committee fully discussed and explored the various elements of the mortgage portfolio and their anticipated impact on the risk volatility and yield.

Following discussion, the following motion was presented:

It was therefore resolved that the Board of Directors’ approve the proposed changes in the asset mix to increase the Mortgage asset allocation target to 15% (from 7%) which is in alignment with the objectives of the current SIPP and the resultant changes to the permitted investment vehicles & asset mix ranges as outlined in the revised SIPP, which should lower annual volatility and downside risk while maintaining annual expected returns.

(Moved: M. Gamble, seconded: R. Black, against: A. Beraskow, D. Bowman, motion carried)

8.   Update on Strategic Planning                                  

Staff provided an update on the strategic planning process and timing. It was noted that the process began in March 2018 and will be completed in the November 2019 timeframe. The Assess and Scan phases included many touch points to allow Staff and the Board an opportunity to provide feedback.  The Approve phase will start in the September 2019 timeframe and is anticipated to be completed with the planned approval of the plan at the November 21, 2019 Board of Directors’ Meeting.  It was noted that the Board will be asked to provide written feedback on the preliminary draft plan in August, in advance of the September Board meeting. It was agreed to review the vision and mission statements at the September Board meeting to ensure they are aligned with the new plan direction. There was some discussion of how engaged Board members had been in the early phases of determining the planning process and timeline.

9.     Other Business       

The Chair reminded the Board of the timing of the Board and Committee Effectiveness survey.                                                         

10.  Next Meeting

The next meeting of the Board is scheduled on July 24, 2019.

A. Chang, D. Chiswell, D. Fowler, A. Fraser, L. Gravel, B. Holland and J. Latour withdrew from the meeting.

11.  In-Camera Session

The Board of Directors held an in camera session.                                         

12.  Adjournment 

There being no further business, on motion by A. Escobar and seconded by B. Sandiford, the meeting was concluded at 3:20 p.m.