Minutes of the Meeting of the CIRA Board of Directors held at the Fairmont Royal York Hotel, Toronto on February 2, 2006 at 9:30 a.m.

Transcription

1 Minutes of the Meeting of the CIRA Board of Directors held at the Fairmont Royal York Hotel, Toronto on February 2, 2006 at 9:30 a.m. Ottawa time Directors attending: Paul Andersen (Vice-Chair), Richard Anderson, Malcolm Andrew (exofficio), Clyde Beattie (Chair), John Demco (Secretary), Robert Ford, Michael Geist, Ron Kawchuk, Lynne Mackan-Roy, Jim Mercer, Margaret Osborne, Bill Reid, Debi Rosati (Treasurer), Bernard Turcotte (ex-officio) Guest : Kim von Arx (CIRA) Recording Secretary : Lynn Gravel (CIRA) 1. Approval of Agenda Resolved that the agenda distributed with the material for the meeting be adopted. (Moved: R. Ford, seconded: R. Kawchuk.). 2. Financial and Operational Updates 2.1 President's Report The President reported on the activities up to December 31, New registrations for the period were at 226,859 or 28% over budget. Renewals were at 78% and the Net New Growth (NNG) was at 30%. Overall staff had been occupied with the Corporate Governance reforms, preparing for the Special Members' meeting and the implementation of Phase I of the National Quality Institute's Progressive Excellence Program. B. Turcotte reported that the To Be Released (TBR) system had been suspended since January 24, 2006 until further notice due to irregular activities. Staff will be implementing some changes to ensure its fairness and stability. Staff will be busy preparing for the implementation of the Corporate Governance reforms, the Q1 release of registry operations changes, the final public consultation on the WHOIS implementation plan and the Internet Radio Project. 2.2 Review of the Q4 Financial Results The Treasurer reviewed the financial results for the period ending December 31, Revenue was higher this period than budgeted due to an increase in new registrations. New registrations this quarter are 33% higher than the same period in 2004 and the actual renewal rate is 78% for this quarter. Overall expenses were slightly over budget due to some unforeseen travel and meetings and expenses related to the Corporate Governance reforms.

2 Draft Financial Statements The Treasurer reviewed the draft financial statements for 2005 noting that in the corporation's Statement of Financial Position, the largest accounts payable was the University of British Columbia (UBC) in the amount of $953,424 debt payment and under the current portion of long term debt, the last debt payment to UBC. The Statement of Net Assets now reflected the accumulated operating reserve based on 12 months instead of 9 months. The Treasurer presented the letter from Canada Revenue Agency approving the change in fiscal year end and the independence letter from the Auditors as required. 2.4 Report on all Statutory Obligations B. Turcotte advised Directors that all statutory payment obligations were up to date as stated in the President's certificate. 2.5 Office Space B. Turcotte informed the Board of Directors that an opportunity to lease an additional 2,021 sq. ft, has presented itself. This additional space is adjacent to the present office space and the layout is functional without making any major improvements to the premises. Resolved that the President be authorized to execute on behalf of the corporation, an amendment to the Lease Agreement for 350 Sparks Street, Suite 1110 for an additional 2,021 square feet and spend the monies required for leasehold improvements and furniture. (Moved: R. Kawchuk, seconded: J. Mercer, unanimously carried) 2.6 Audit Committee Terms of Reference WHEREAS paragraph 6.01 of By-law No. 1 of the Corporation provides that In addition to the Nomination Committee, the Board may from time to time appoint one or more other committees and delegate to such committees any of the powers of the Board, subject to the terms of reference imposed from time to time by the Board; AND WHEREAS the Board of the Corporation wishes to appoint an Audit Committee; NOW THEREFORE BE IT RESOLVED THAT: 1. That the Audit Committee be hereby created. 2. The terms of reference set out in Schedule A hereof (the Audit Committee Terms of Reference) shall apply to the Audit Committee. 3. The following individuals are hereby appointed as a member of the Audit Committee to hold office pursuant to the Audit Committee Terms of Reference: R. Anderson, J. Demco, R. Ford and D. Rosati. (Moved: P. Andersen, seconded: R. Kawchuk, unanimously carried)

3 Be it further resolved that D. Rosati be appointed as Chair of the Audit Committee. (Moved: P. Andersen, seconded: R. Kawchuk, unanimously carried) Be it further resolved that the Board of Directors authorizes the Audit Committee to retain the services of an auditor for the stub period of January 1, 2006 to March 31, 2006 and to set their remuneration. (Moved: P. Andersen, seconded: R. Ford, unanimously carried) Schedule A Audit Committee Terms of Reference Interpretation 1. Definitions. Unless otherwise specified, the words and expressions used in these Terms of Reference shall have the same meaning as in By-law No. 1 of the Corporation. 2. Complement to By-laws, etc. The provisions of these Terms of Reference are intended to complement and enhance in a consistent manner, the requirements that arise at law and in the By-laws of the Corporation. 3. Interpretation. These Terms of Reference shall be, unless the context otherwise requires, construed and interpreted in accordance with the interpretation provisions of the Corporation's By-laws. Purpose 4. The mandate of the Audit Committee shall be to act on behalf of the Board of Directors in overseeing all material aspects of financial reporting, internal controls, the internal-audit function and the audit of the annual financial statements. Core responsibilities 5. The Audit Committee generally will exercise oversight in the following three interrelated areas: (a) Audit Activities: (i) review the annual financial statements and discuss them with the external auditor; (ii) review with the external auditor the auditor's report on the annual financial statements and related issues including adequacy of disclosure, accounting practices; (iii) review with the external auditor any internal control weaknesses, and if appropriate, determine whether effective steps have been taken to overcome them; (iv) recommend to the Board of Directors the approval of the audited financial statements, plus the re-appointment and compensation (or replacement) of the external auditor;

4 (v) pre-approval of all audit and non-audit services and fees to be performed by the external auditor, including the approval of the auditor's annual engagement letter; (vi) review with the external auditor to determine if there were any difficulties or disputes with management, any significant changes in the audit plan, any significant changes in accounting policies and any management estimates that required significant judgment; and (vii) prepare and present an annual Audit Committee Report to the Corporation's Board of Directors (b) Risk Management and Control: (viii) review and assess the organization's financial risk management policies and processes; and (ix) review the financial policies and internal controls to ensue compliance. (c) Financial Reporting: (x) review and make recommendations on the Financial Reporting, plans and reports and on such other matters as are within the scope of the Audit Committee. Composition 6. The members of the Audit Committee are appointed by the Board of Directors. 7. The Audit Committee shall be comprised of three or more independent board members, the majority of whom should have experience in financial reporting. An independent board member would be one who is not employed by the entity or one who performs incompatible board duties. 8. The Chair of the Audit Committee shall be appointed by the Board and shall not be an employee of the Corporation. The Chair sets the agenda of the meetings based on the work plan developed in response to the Audit Committee mandate. 9. The quorum at all meetings of the Audit Committee shall consist of a majority of the number of members appointed to the Audit Committee. 10.Unless otherwise ordered by the Board of Directors, each member of the Audit Committee who is appointed by the Board of Directors shall continue to be a member thereof from the time the member was appointed until the Board of Directors meeting immediately following the election of the Corporation which is subsequent to the Appointing Election or until his successor is elected or appointed by the Board of Directors or he resigns or as determined by the Board of Directors. 11.The Board of Directors shall fill vacancies on the Audit Committee.

5 Rules of procedure 12. The Audit Committee shall meet at least two times each year. The Audit Committee may hold additional meetings at the direction of the Chair, if it considers it necessary for it to carry out its responsibilities. 13. Meetings of the Audit Committee may be convened at the direction of the Chair thereof. 14. No business shall be transacted by the Audit Committee except at a meeting of the committee members at which a quorum is present. 15. All members of the Audit Committee shall be entitled to one (1) vote at meetings of the Audit Committee. The chair of the Audit Committee shall not have a second or casting vote. 16. If not appointed to the Audit Committee, the Board of Directors, officers, and the President of the Corporation may attend any Audit Committee meeting and receive proper notice thereof. Employees of the Corporation, the external auditor and any other person(s) the Audit Committee deems necessary may also attend Audit Committee meetings. 17. The Audit Committee shall, in the exercise of its powers, authorities and discretions so delegated, conform to any rules, regulations or restrictions that may from time to time be imposed upon it by the Board of Directors. 18. The Secretary of the Audit Committee shall be elected by its voting members. The Secretary shall keep minutes of each meeting and copies thereof shall be sent to the members of the Audit Committee and the Board of Directors. 19. Unless otherwise provided herein, the meetings and proceedings of the Audit Committee shall be governed by the provisions of the By-laws of the Corporation that regulate meetings and proceedings of the Board of Directors insofar as the same are applicable thereto. Appendix A In fulfilling the responsibilities of the Audit Committee, the committee may wish to consider activities in the following three core areas: 1) Audit Activities: a) review the auditor's Independence letter regarding the auditor's independence; b) review the overall scope of the external audit including areas of identified risk; c) the committee's annual report to the Board of Directors, May contain i) A summary of the Audit Committee's activities for the period; ii) A recommendation concerning the audited financial statements; and

6 iii) A summary of the external auditor's observations together with CIRA's management response. 2) Risk Management and Control: a) understand the risks of fraud and error, and review management's measures to investigate these risks; b) consider the potential risk of management's override of controls or other inappropriate influence over the financial reporting process; and c) enquire into the condition of the books and records and the adequacy of resources committed to the accounting function and internal controls. 3)Financial Reporting: a) oversight of the selection of accounting policies used in the preparation of the financial statements, including consideration of all relevant alternatives; b) review and discuss the interim financial statements with management; c) review other financial information e.g. reviewing the annual report for consistency with the financial information in the financial statements and other audit reports required by the organization; and d) maintain an effective communications policy, including disclosure of the Audit Committee's mandate. It was the consensus of the Board that D. Rosati will resign from the position of Treasurer as soon as the new By-Law changes are approved by the Ministry. 2.7 Budget Committee It was resolved that the Budget Committee be dissolved as of this date. (Moved: P. Andersen, seconded: L. Mackan-Roy, unanimously carried) 2.8 Technical Oversight Committee R. Kawchuk reported that the Technical Oversight Committee had met the previous day and had discussed DNS robustness and various disaster scenarios. Staff will report back at the next Technical Oversight Committee meeting with a technology roadmap. C. Beattie suggested that the Board of Directors consider a technical security audit. K. von Arx referred the Board of Directors to three projects currently under way that would include this concern: risk analysis, single points of failure and the continuity of the Registry.

7 Elections under Revised By-Law That the CIRA Board of Directors adopt the following resolution: Resolved that: 1.Staff proceed with the 2006 CIRA Policy on Nominations and Elections; 2. Staff proceed with the 2006 CIRA Board Election in accordance with the Election Rules; 3. The election period for the 2006 Board election be September 15, 2006 (12:00 noon, Ottawa time) to September 21, 2006 (20:00, Ottawa time) and; 4. The Terms of Reference for the 2006 Board Election Returning Officer govern the mandate of the 2006 Board Election Returning Officer; if the revised By-Law No. 1 is approved by the Ministry. (Moved: J. Demco, seconded: J. Mercer, unanimously carried) The Board of Directors directed staff to report back in the upcoming weeks with an implementation and communication plan to inform the public and stakeholders in regards to the appointment of the Nomination Committee and the authentication process for members. C. Beattie proposed that an ad hoc committee be formed to work with staff in the development of this work plan and to establish timelines. R. Anderson, M. Geist and M. Osborne volunteered to form this committee. 4. Board Correspondence The Board did not receive any correspondence since its last meeting. 5. Other Business The Board of Directors discussed meeting in April or May for a 2 day strategic planning session. Staff will report back to the Board of Directors with possible dates. B. Turcotte reported that discussion were ongoing with UBC and would attempt to contact them yet again and report back to the Board of Directors. The Board of Directors also directed staff to look into changing the date of the Annual General Meeting to June 2006 to eventually coincide with the Board elections in future years. Staff will report back with possible venues. The Board of Directors discussed the recent amendment to the Letters Patent and reviewed how it should determine what other internet-related activities CIRA should engage in. The Board referred back to the Special Members' meeting and, in particular some of the concerns that were raised in regard to the amendment to the Letters Patent. A discussion ensued on how CIRA should best approach this topic and the Board of Directors was of unanimous opinion that it is of utmost importance that the process be open, transparent, and accountable. In light of that, the

8 Board of Directors came to the conclusion that the first step in this process is to determine a framework/process through which the Board of Directors can effectively consult with the membership on activities that CIRA may and/or should consider. C. Beattie suggested that an ad hoc committee be formed and Directors interested in participating should show their interest to the Chair. K. von Arx reported that staff has been working on a foundation and process document which should be completed in the spring of this year. This document will provide a framework for the Board to consult with the public and the membership on what other internet related activities CIRA should be engaged in. 6. Next Meeting The next meeting of the Board will be held in April L. Gravel, B. Turcotte and K. von Arx withdrew from the meeting. 7. In Camera Session The Board held an in camera session. Following the in camera session, L. Gravel, B. Turcotte and K. von Arx rejoined the meeting. 8. Adjournment There being no further business, on motion by P. Andersen and seconded by J. Demco, the meeting was adjourned at 12:30 p.m.