School of Engineering and Computer Science Te Kura Mātai Pūkaha, Pūrorohiko

COUNCIL MEETING

11 June 2010

MINUTES OF COUNCIL MEETING

Status: Draft

Present: Frank March (President), Jamie Baddeley (Vice President), Liz Butterfield, Donald Clark, Michael Foley, Neil James, Hamish MacEwan, Judy Speight, Chris Streatfield, Michael Wallmannsberger, Nat Torkington.

In Attendance: Vikram Kumar (INZ Chief Executive), Susi Cosimo (Shared Services Unit Manager), Doug Mercer (NZRS Acting Chair), Jay Daley (NZRS Chief Executive), Graham Nahkees (NZRS Consultant), Joy Liddicoat (DNCL Chair), Debbie Monahan (Domain Name Commissioner), Keith Davidson (External Relations), Simon Riley (Member), Thomas Morgan (Member), Jordan Carter (Minute Taker).

Meeting Opened: The President formally opened the meeting at 12.04pm, Council went into committee to discuss Board appointments and came out at 12.11pm.

1. Apologies

Council received apologies from Jonny Martin, and from Donald Clark for partial attendance & Nat Torkington for lateness.

1. Declaration of Councillors Interests

The Vice President highlighted that FX Networks are now the backbone provider to KAREN.

Councillors were reminded to provide written confirmation of any changes to the register to susi@internetnz.net.nz.

1. Agenda Consideration – In Committee Items

The in-committee item was the first item in the agenda, dealing with the Nominations Committee recommendations.

1. Consent Agenda Item

RN 19/10: THAT the minutes of the meeting held on 19 March 2010 be received and adopted as a true and correct record, AND THAT the following reports be received:

1. President’s Report

2. Evote ratification

   (President/Vice President)

   CARRIED U

EVOTES

There have been two e-votes conducted since the last Council Meeting:

Evote:		For:	Abstain:
1304101	President/Cr MacEwan That the application for funding from NZCS for $75,000 over two years be declined at the current level of participation but that reconsideration occur if the applicant is able to muster a larger group of contributors representative of the beneficiaries of this programme.	Hamish MacEwan Nathan Torkington Liz Butterfield Jamie Baddeley Neil James Chris Streatfield Michael Wallmannsberger Donald Clark Judy Speight Jonny Martin Michael Foley
1304102	President/Cr MacEwan That application from TUANZ for a grant of $80,000 should be declined at this stage, with the proviso that InternetNZ uses its relationships and influence to encourage other potential funders of the project to consider investing. The applicant is also invited to reapply when the project and planning is more mature.	Hamish MacEwan Nathan Torkington Liz Butterfield Jamie Baddeley Neil James Chris Streatfield Michael Wallmannsberger Donald Clark Judy Speight Jonny Martin Michael Foley

RN 20/10: THAT the e-votes be ratified.

(President/Vice President)

CARRIED U

1. Matters Arising from the Minutes

   There were no matters arising from the minutes. Pending Action Points are all completed, and no discussion required.

   
   

2. President’s Report

   Frank spoke briefly to his report noting the untimely and sad death of Paul Reynolds.

   
   

   He spoke of the Nominations Committee’s recommendations and noted that: Richard Currey’s resignation of the DNCL Board created the need for someone to step in and complete his term, which has one year remaining. Also to note is that the NZRS Board would like to have Cr Wallmannsberger reappointed as their Council representative, this is dependent however on him being a Councillor. Cr Wallmannsberger has one year left on his Council term so can only be appointed for a one year term. Each term begins 1 August 2010.

RN 21/10: THAT Michael Wallmannsberger be appointed as the NZRS Council Representative for a one year term.

(President/Vice President)
CARRIED

Abstention: Michael Wallmannsberger

RN 22/10: THAT Richard Currey be appointed to the NZRS Board for a three year term.

(President/Vice President)
CARRIED U

RN 23/10: THAT Andy Linton be appointed to the DNCL Board for a three year term.

(President/Vice President)
CARRIED U

RN 24/10: THAT David Farrar be appointed to the DNCL Board for a three year term.

(President/Vice President)
CARRIED U

RN 25/10: THAT Kenneth Johnson be appointed to the DNCL Board for a one year term.

(President/Vice President)
CARRIED U

1. Audit and Risk Committee Report

Cr Streatfield presented a verbal report. The Committee met with the auditor yesterday. A minor suggestion was made to change the layout of audited accounts from next year with the Group as the first column and the Parent (INZ) the second, the reverse of the status quo. The audit confirmed that the society’s accounting processes and systems are working well.

RN 26/10: THATthe verbal report of the Audit and Risk Committee be received.

(President/Cr Streatfield)

CARRIED U

The President thanked Cr Streatfield for the work chairing the Audit and Risk Committee and noted Cr Streatfield’s upcoming resignation from Council and expressed his regret to see him leave Council.

1. CE Report

CE Update

Vikram Kumar spoke to the report. He noted the report is in two parts – the reactive work first, and the proactive part second. Vikram noted that on the personnel front, Keith has been extended for a year in his position as External Relations contractor.

There was a brief discussion about the role of the new website as a content management system and the issue of keeping it as an archive.

RN 27/10: THAT the Chief Executive’s Report be received.

(President/Cr Streatfield)

CARRIED U

The meeting broke for lunch and returned to the Chief Executive’s report after the DNCL and NZRS reports. It resumed at 1.02pm. Cr Clark arrived at the end of the lunch break.

Joy, Debbie, Jay, Doug and Keith joined the meeting. Simon Riley arrived at 1.05pm.

1. Domain Name Commission Limited Report

Joy spoke to the report, highlighting a few points and updating a couple of issues. The April report has a new part, underlining compliance and security work. The fourth quarter report shows that the projected loss is at $125k, above budget due to contribution to office fit-out costs.

Joy also noted consultation is under way on the proposal to allow limited searches by registrant which would require changes to the current WHOIS Policy. One of the reasons for introducing such searches is to align with the dispute resolution policy. It is hoped good submissions will be received.

Council was advised that a letter had been received from the New Zealand Bankers’ Association saying that the project will not proceed given the changed priorities on the part of their members.

RN 28/10: THAT the .bank 2LD be removed as a potential second level domain.

(Cr Streatfield/Vice President)

CARRIED U

Joy circulated the DNCL Annual Report.

Frank noted and complemented both subsidiaries for the 100% uptime on all DNS servers and for the SRS.

Cr Torkington endorsed having DNCL staff speaking at other events, and encouraged this across the group.

RN 29/10: THAT the DNCL February monthly report be received.

THAT the DNCL March monthly report be received.

THAT the DNCL April monthly report be received.

THAT the DNCL fourth quarter report be received.

(President/Cr Streatfield)

CARRIED U

RN 30/10: THAT DNCL be thanked for the production of their Annual Report.

(Cr Streatfield/President)

CARRIED U

1.13pm – 1.16pm Keith Davidson and Susi Cosimo left the meeting.

1. NZ Registry Services Report .

Doug Mercer and Jay Daley spoke to the NZRS Report noting that Doug is Acting Chair while Donna is out of the country. The key focus on 100% uptime for DNS and SRS continues and arises through continuous improvements. The SRS is having an EPP (Extensible Provisioning Protocol) enhancement added at the current time. Registrar consultation on this was extensive.

Satisfaction with the current interface and NZRS approach has led some to ask whether other TLDs could be made available through NZRS systems (i.e. that NZRS become an ICANN-accredited registrar for other TLDs). This is being considered as a possible business development issue, and feasibility is now being investigated by the CE after soundings across the group indicated willingness for this to occur. Any progression will be a Group initiative, following the group business development strategy endorsed at the October 2009 joint strategy day. If the initiative is found to be viable it will be brought back to Council before substantial resources or commitment is invested.

Jay introduced the fourth quarter report, highlighting: growth in domain name registrations, EPP implementation for the SRS, review of operational structure and new time service network installation. On ENUM, Jay explained that discussions with the TCF had now paused as the TCF had concluded they were too busy with UFB to discuss ENUM for the next several months.

Graham Nahkees gave a presentation on the NZRS Board self-assessment. The process was thorough, including several stages: interviews with Chair and CE, survey of Board members, and an extensive Board workshop. The overall impression is that NZRS is in the top segment of similar sized companies, has a rigorous approach to its work, and readily reaches conclusions as to where improvements can be made.

RN 31/10: THAT the NZRS fourth quarter report be received.

(President/Cr Streatfield)

CARRIED U

Debbie, Joy, Jay, Donna and Graham departed at 1.34pm, with Jay and Debbie then returning for Keith’s report.

1. External Relations Report

The President opened the item by congratulating Keith on his election as Chair of APTLD. Keith spoke to his report, opening the floor for questions after his presentation. He noted in the consolidated report with DNCL on the Kuala Lumpur APTLD meeting and Nairobi ICANN meeting, there were no controversial issues.

Upcoming meetings of interest include the Asia Pacific Regional IGF (starting in Hong Kong on Monday), then ICANN Brussels, then APTLD Sri Lanka will be of interest. Keith noted his other activities (ICANN delegations & redelegations Working Group, chaired by Keith for the ccNSO; and the development of a possible Pacific sub-regional IGF. Don Hollander will be attending next weeks Pacific ICT Ministers meeting in Tonga, to promote the idea of the Pacific IGF, in place of Keith, due to the clash of timing of the Tonga and Hong Kong meetings.

Keith noted that in respect of PIP, there will be $10k forthcoming from .asia as matching funding if InternetNZ decides to make the grant on the table later in the meeting.

Cr Butterfield was presented with an Australia/New Zealand Best Practice Award, given to Hector’s World Ltd for best Security initiative. She thanked everyone for the award, describing it as a great honour and invited people to visit the Hector’s World website, where some new materials have recently been launched: www.hectorsworld.co.nz.

RN 32/10: THAT the External Relations report be received.

(President/Cr Streatfield)

CARRIED U

Keith left the meeting at 1.55pm.

1. CE Report - continued

Financial Report to April 2010

Vikram spoke to the report. Expenditure is in line with expectations other than a few timing issues. Overall, under spend is around $51k. Under spend in grants reflects World Internet Project invoice being later than expected. The rest of the pages are the full numbers. Overall, one month into the year, the position looks good.

Councillors said the annotations were very helpful. Cr Wallmannsberger asked for the Profit and Loss graph to be replicated for the cash position.

Grants

Vikram noted that grants under $5k are made by the Grants Committee, and grants over this amount require Council decision. After the decisions of the Grants Committee and Council, about $100k remains in the grants pool. Councillors discussed the recommendations of the Grants Committee, working through each of the proposed grants in turn, discussing the background for each. The committee recommended supporting each of the three applications.

2.10pm - 2.23pm - Council broke for afternoon tea.

In the discussion, Councillors noted the importance of avoiding a perception that funding grants will necessarily recur in future. Vikram also noted that there will be a register of grants made and reports from each grant put up on the website.

There was discussion on whether the majority of the budgeted grants pool should be spent so early in the year, or whether some funds should be held back for use later in the year. It was agreed that Council needs to decide on the merits of a request as and when received. However, changes to this approach, such as using tranches, will need to be considered in a review of the grants process.

RN 33/10: THAT Council note the decisions made by Grants Committee regarding funding requests from the “grants pool” since the last Council meeting on 19 March 2010.

(President/Vice President)

CARRIED U

RN 34/10: THAT Council approve a grant for $42,000 from Computer Clubhouse Trust for Network of Aotearoa Clubhouse (NOAC).

(President/Vice President)

CARRIED U

RN 35/10: THAT Council approve a grant for $15,241 from University of Otago to run the NZ Computer Crime and Security Survey.

(President/Vice President)

CARRIED U

RN 36/10: THAT Council approve a grant for $10,000 from Pacific Internet Partners to provide travel grant fellowships for the Pacific Islands ICT community.

(President/Vice President)

CARRIED U

RN 37/10: THAT the financial report to 30 April 2010 be received.

(President/Vice President)

CARRIED U

Group Cash in excess of reserves

Vikram introduced the paper, talking through the work as it continued after the May special meeting of Council. The Council’s view is that cash in excess of reserves held by the three organisations individually should be held by the parent organisation. To deal with smoothing InternetNZ’s cashflow, a new dividend/license fee process will be developed.

NZRS need to work out its excess funds, and advise InternetNZ of the excess over current reserves requirements.

Vikram also outlined the proposed changes to the Treasury Management Policy, updating it from the current 2004 version. Cr Streatfield replied that point 5 should specify the Council rather than the CE, as it is a governance issue. He also noted that in respect of the proposed principles for Treasury management, they should be tied to the policy rather than separate – perhaps incorporated into this.

The Council discussed also the need to review on a regular basis the Society’s policy. Cr Clark was pleased to read the paper, which gives him a good deal of confidence in how the organisation’s funds are being managed.

Cr Wallmannsberger noted that the point of the Treasury Reserves Policy was to manage credit risk. The Council needs to be able to be sure that the Group’s overall credit risk exposure to an entity (such as a bank) is taken into consideration.

RN 38/10: THAT the Council ask the President to write to NZRS requesting:

NZRS calculate its cash requirements taking into account relevant factors including:

• Current and projected liquidity and the NZRS Liquidity and Reserves Policies including the impact of the recently agreed reduction in the .nz wholesale fee due to be implemented from 1 July 2010.

• NZRS forecasts for growth in domain name registrations and assessment of the ongoing risks to those forecasts.

• The impact of loss of interest income from reduced cash holdings.

• NZRS reply to the President with the amount it holds in excess of the amount as calculated above and an explanation as to how the figures were calculated, including details of any additional considerations to those above.

• NZRS pay InternetNZ the amount it holds in excess of the amount as calculated above by way of one or more special dividends upon maturity of the term deposits in which such excess amounts are currently held.

  (President/Cr Clark)

  CARRIED U

RN 39/10: THAT the Council adopt the amended Treasury Management Policy as appended.

(President/Vice President)

CARRIED U

Note: the amended Treasury Management Policy is as follows:

InternetNZ Treasury Management Policy
as amended on 11 June 2010

1. The Society shall adhere to the Constitution, Council Bylaws and to all relevant laws governing Incorporated Societies in its undertaking of any investment.

2. The Society will favour investments that entail minimal risk and which require the minimum of active management or participation by the Society, its Officers, or those appointed to oversee the investment process.

3. The Society has an obligation to establish investments that yield the best possible rate of return, subject and subordinate to the requirements of paragraphs (1) and (2).

4. The Society will not invest more than 50% or $1,000,000, whichever is the lower value, of its total capital reserves in investments in a single entity without a specific vote of Council approving such investment.

5. InternetNZ Members are required to disclose any interest they may have, or know of, concerning an investment held by the Society, to the Council through the President.

6. The Chief Executive of InternetNZ shall have the responsibility to explore, establish and manage investments in accordance with this overall policy.

7. The Chief Executive shall report any change in the status of investments held by the Society as part of its regular reporting to Council.

8. The Society will include an abbreviated non-specific summary of investments in the annual report.

RN 40/10: THAT the CE review the Treasury Management Policy in consultation with the Audit and Risk Committee, with proposed changes being reported to the August Council meeting.

(President/Vice President)

CARRIED U

AP 06/10: CE to develop an Options Paper regarding the treatment of interest accruing from the capital funds to be received from NZRS pursuant to RN 38/10.

Delegation to Chief Executive

Vikram introduced his paper and spoke about the need for clear delegations.

RN 41/10: THAT Council resolves that Vikram Kumar, Chief Executive, be authorised to commit and approve on behalf of the Society with effect from 1 February 2010:

Staff
All matters related to employees and contractors including but not limited to appointment; salaries/rates and terms; leave; reimbursement of expenses; contracts; and terminations.

Financial
- Operational Expenditure
Operational expenditure within approved annual budget: no limit
Operational expenditure not within approved annual budget: $5,000
Operational expenditure beyond the limits above shall be approved by Council prior to commitment.
- Capital Expenditure
Capital expenditure within annual budget: $10,000
Capital expenditure not within approved annual budget: $3,000
Capital expenditure beyond the limits above shall be approved by Council prior to commitment.
- Reimbursement of CE’s expenses
All claims for reimbursement of expenses made by the Chief Executive shall require authorisation by the President.

Spokesperson, Representative
The Chief Executive shall be the primary spokesperson and representative on behalf of InternetNZ.

Others
All matters not specified above that are reasonably required for the smooth and efficient operations of the Society and implementation of the approved Business Plan subject to the limits imposed by the Constitution, Bylaws, and Council resolutions.

Sub-delegation
Within the scope and limits of this resolution, the Chief Executive shall be able to sub-delegate authority as required.

(President/Cr Torkington)

CARRIED U

Calendar

Susi introduced the calendar. A key date to note is the AGM in Wellington on Thursday 29 July, she also noted that the election process soon gets under way. Cr Butterfield asked about Auckland engagement with the AGM, and plans are still under development.

Membership Report

The membership report showing 223 members as on 2 June 2010 was noted.

RN 42/10: THAT the new members be approved.

(President/Cr Streatfield)

CARRIED U

1. General Business.

Policy Review Process

Cr Torkington raised the need for a proper Policy Review Process at Council. There are policies that are out of date or hard to locate. They should be kept up to date, reviewed regularly, and made easily available to Councillors. Vikram, noting that the current situation had developed over a long period of time and would take time and effort to work through, undertook to proceed with this.

Farewells
Cr Streatfield has resigned from Council and Cr Butterfield’s term is expiring at the AGM and will not be standing for Council. Cr Speight, Cr James and Cr Martin intend to stand in the coming election. The President on behalf of Council thanked the outgoing Councillor’s for their work.

RN 43/10: THAT Cr Streatfield, Cr Butterfield, Cr Speight, Cr James and Cr Martin be thanked for their work as InternetNZ Councillors.

(President/Vice President)

CARRIED U

WITH ACCLAMATION

Next Meeting: The next scheduled meeting is 20 August 2010.

Meeting Closed: The meeting closed at 3.30pm.

Signed as a true and correct record:

…..………………………………………..

Frank March, CHAIR