Executive Board Minutes - 22 September 2008

Present: Paul Swain (Chair), Miki Szikszai, Judith Speight, June McCabe, Peter Dengate Thrush.

Opened: 8.55am - 9.12am - Board alone time.

The Chair formally opened the meeting at 9.16am.

Paul welcomed people to the meeting and noted that the meeting needed to finish at 1pm sharp due to other commitments.

Apologies

None.

Minutes

Paul noted some changes required under item 3a) on the transition plan, and item 3d) on the proposed internal policies for the Executive Director. These changes are reflected in the final minutes.

RN 07/08: THAT the minutes of the meeting held on 27 August 2008, as amended, be approved.

(Paul Swain/Peter Dengate Thrush)

CARRIED U

Matters Arising

Remuneration Committee report – was not on the agenda.

Paul reported that the Committee met on Monday 15 September, and Miki provided a report.

The Remuneration Committee recommends:

1. That Miki Szikszai be appointed Chair of the Remuneration Committee.
   

2. That an external resource be retained to develop Board Policies and Procedures, and to job scope and size the positions of Executive Director and Manager, Shared Services Unit (SSU).
   

3. That, noting that employment contract reviews are due, and further noting that a change in structure has occurred during the review period, the Remuneration Committee be responsible for the reviews, taking into account the work referred to in (2) above, the InternetNZ Council, and the Executive Director and Manager (SSU).
   

4. That the contract for the Manager (SSU) be executed by the Chair of the Executive Board.
   

5. That the Executive Board notes that after consultation with Executive Board members and the President, the Chair sought legal advice on employment related issues. The Remuneration Committee recommends that the Executive Board pays $2010 to Cullen Employment for services rendered in this regard.
   

RN 08/08: THAT the five recommendations of the Remuneration Panel as reported above be adopted.

(Miki Szikszai/June McCabe)

CARRIED U

Following this, Keith asked when the review would be completed, and whether any changes to salary would be back-dated to 1 July 2008. Paul confirmed that this would be the case. Paul also noted that no timeline is set for these events. There was a discussion about the remuneration review process and the arrangements for the Executive Director and the SSU Manager in dealing with staff reviews.

The Action Points Register was then reviewed.

AP 14/08: Keith Davidson to provide disclosure of interests to the Executive Board.

Internet History 101

Given time pressures today, this presentation was deferred to the October meeting, to be done with Peter’s presentation on ICANN.

AP 15/08: Next meeting agenda to include Peter and Keith’s presentations.

Executive Director’s Reports

a) Budget Split: Executive Board / Council

Keith introduced the split which needs to occur, between Council, the Board, the ED’s office and the SSU.  Susi, Jordan and Keith have come up with the split on p. 25-27 of the papers. The exception to agreed split is salaries, which may need to flex.

Paul noted his understanding that the Budget is the same as what was allocated to the ED when part of Council, so there is no “extra” – this is simply an internal split.  Second point Paul makes is that on that basis, if there is broad agreement, that is how the split will occur until the Board moves into budget planning for the 09/10 year. The recommendations stand.

Paul asked where the Technical Capability Development Fund and the Special Projects Fund are shown. Keith explained that the Budget as presented relates to stock-standard accounts, not based on projects. The accounts are maintained on a project base, and a standard accounts base. The most likely “account” line for both projects is in the “Sponsorship” account under direct project costs. Keith responded to a range of questions about how the accounts and budgets are constituted, and on what basis the Budget is developed with members’ input through the Business Plan process.

After further discussion, Pete noted that it would be worth organising a workshop for Executive Board members to work with the staff to understand fully how the Accounts work. Miki noted he would like to see the accounting policy. He also asked if the staff were happy with the split of the “operating grant” income line – yes, subject to staff line.

RN 09/08: THAT Executive Board adopt the framework Budget as set out in the “InternetNZ Group – Split Budget 2008/2009”.

(Paul Swain/ Miki Szikszai)

CARRIED U

RN 10/08: THAT Executive Board require at its next meeting a six-monthly Budget for the Shared Services Unit, Executive Board and Executive Director’s Office, that takes into account year to date spending within the existing Budget limits.

(Paul Swain/ Miki Szikszai)

CARRIED U

Keith noted that the Budget is set on the idea that the SSU is the recipient of non-split costs. Currently some other expenses are shared between the business units – Keith noted split of accounting services and reception for example. It was agreed that the current hybrid model of cost centre and cost recovery centre regarding the SSU should remain in place for the current financial year but that there needs to be a fuller discussion of whether the SSU is a cost centre or a cost recovery centre, perhaps in the context of budget setting for next year.

Paul replied his understanding is that these are cost centres, and the location of costs needs to be an issue.

AP 16/08: Sandra Glasgow to amend references in the accounts to “EDOB” to be to “EB”.

b) Executive Director’s Report and Financial Reports

Keith introduced his report starting with the project reports, inviting any questions. Paul asked how the framework communicates the status of a project. He requested a hard analysis of all the projects for the next meeting, as to which will or will not proceed. This should also be considered in the context of the reporting, with those with current activity separated from those which are not actually under way.

AP 17/08: Executive Director to change project reports for next meeting, to separate active from non-active projects, and giving a view as to the priority of the various projects. The report should also be sorted by strategic plan goals.

Keith noted that one of the key absences from previous governance arrangements was a sense of clear priority, so any guidance on this will be extremely useful.

Peter asked how to assess the success of completed projects – how are projects “closed off” and assessed?

AP 18/08: Executive Director to develop a “project close” report template and complete a report evaluating the outcomes of projects as they are completed based on the discussion.

June noted that prioritisation is a two-way process. Key is strategic alignment and fit. Resource allocation/budget is also critical.  Strategic fit, capability, and evaluation. Miki noted “quality” of the report, with absent content in budgets. Miki prefers consolidated information at the front, so no “budget” figures on each project.

Keith noted “special projects fund” and all the accounts are cash based not accruals based. Paul noted that he would like to have clear information about what has been committed in the future. Reporting needs to provide adequate but not excessive information.

Reports need to be against strategy, priority and performance. Also more qualitative data on completed projects.

Keith also noted in response to a question that projects with no funds are not on the financial summary page.

Keith responded to a question about the cyberlaw fellow review. The final report of the review committee will not be until very late calendar 2008. Their advice is to renew the current project for one year for calendar 2009, and the discussion of their proposed new option through the Society occurs late this year and next year to take effect in calendar 2010.

The Board requested the Executive Director to commence negotiations with Victoria University of Wellington for the renewal of the Cyberlaw Fellowship for one year.

AP 19/08: Executive Director to commence negotiations with Victoria University of Wellington for the renewal of the Cyberlaw Fellowship for one year.

Keith continued to deal with the Report after a coffee break, with Paul asking him to assume that Board members have read the content.

Special Projects Fund

Keith outlined that this and the TCDF fund were formed by Council to allow the financing of projects that were not budgeted in the business plan. It has been used for ad-hoc projects, and for issues that the Council has previously worked on without budget, e.g. particular consulting resources.

Paul notes three key points, noting that the nature of the fund is clear.

• The issue is a transitional issue: when the Board is clear on its strategic priorities, there will be funding for those formal projects. Some areas won’t have been budgeted for in the Business Plan. Projects Fund funding will need to align to the strategic priorities. (shift from ad-hoc to a more planned basis.)
• Paul’s concern is that while working through this process, the funds will dissipate. He will suggest holding part of the Fund for the use of new projects (c. $50k).
• Would like to see a more formal application process for requests for funding from external groups, setting out the organisation’s nature and how its proposed request for funding fits with InternetNZ’s objectives. There should be a move away from ad-hoc processes where possible.
  

The Board discussed the Chair’s proposals. June is now clear on the history and expectations of the Fund, but shows need for better contingencies in budgets. Jordan confirmed this history, meaning that Council did need a way to fund unbudgeted projects during the year with members’ authority. Miki notes the need for clearer financial forecasting to give members of the Board a clearer picture of forward financial trajectory.

RN 11/08: THAT the Special Projects Fund budget line be split, with $50,000 available to the Executive Director for special projects on his approval under his delegated authority, and $50,000 available to the Executive Board for special projects on their approval; and

That the Executive Director develop an application process and criteria for external applications for funding, which includes detailing the alignment of any application with InternetNZ’s strategic purposes, and report this to the next Executive Board meeting for approval.

(Paul Swain / Judy Speight)

CARRIED U

Executive Director’s Delegated Authorities

Keith outlined in his report the explanation of the Delegated Authorities. Paul noted that the issue arises out of the transitional process now under way. The Board discussed a number of issues about the nature of approvals and Budget processes, and how terms have been used. DA needs approvals, expenditure and budgeting.

RN 12/08: THAT, noting the issue of the ED’s delegated authority was discussed, June McCabe and the Executive Director report to the next meeting with any clarifications required to the Internal Policies for the Executive Director’s office.

(Paul Swain / Peter Dengate Thrush)

CARRIED U

The issue of expenditure in excess of the amount in a budgeted project should be clarified in Keith’s discussion with June.

AP 20/08: Executive Director and June McCabe to report to the next meeting of the Executive Board any changes required to the financial policies that apply to the Executive Director’s office.

c) Staffing Levels and Roles

Postponed until the next meeting.

d) InternetNZ Relationships paper

Postponed until the next meeting.

e) Transition Plan

Postponed until the next meeting.

f) Reporting to Executive Board – frequency and format

Discussed in part above, discussed further at the next meeting.

g) Reporting by Executive Board to Council – frequency and format

The Board noted that for the 17 October Council meeting, the Executive Director’s report will form the basis of the EB’s report to Council. A further discussion on this issue will occur at the next meeting.

RN 13/08: THAT the Executive Director’s report be received, and the financial reports be adopted.

(Paul Swain / June McCabe)

CARRIED U

6. Policy Advisory Group and Policy Development Process

a) Policy Advisory Group

Paul noted the paper setting out a draft Terms of Reference, asking two questions: two co-convenors issue, and the issue of parallel processes with the Board. These were discussed. No decision was taken.

b) Policy Development Process

Deferred for consideration until the next meeting.

AP 21/08: Jordan Carter to start a discussion on the Executive Board email list about the PDP and the PAG, highlighting issues raised in the discussion at the meeting.

7. Decisions Timeline

a) Calendar for Society, Council and Exec Board planning and decisions

Deferred to the next meeting.

b) Strategic Planning / Business Plan / Budget

Paul noted this should be commenced at the next meeting.

c) Executive Board retreat

Paul wants at least a day in January to have a more strategic discussion, and sought Board members’ feedback on whether this would work. Judy is in favour, but does not like January. Miki agrees with the idea as long as well-focused. Peter Dengate Thrush agrees important, need very few items on the Agenda.

AP 22/08: Susi Fookes and Paul Swain to discuss further possible arrangements for an Executive Board retreat early in 2009.

8. General Business

a) Date of next meeting

Scheduled for Wednesday 29 October 2008 in Wellington. The Board discussed this briefly, and Paul’s view is that a day will be needed. He will work with Susi for a full-day slot at the end of October.

b) Network Strategies’ Report

Keith raised this issue. Paul has now understood the nature of the project and approvals. Paul asked for any dissent to going ahead. He had earlier advised Keith to tell the contractors to go ahead unless major issues raised. No issues were raised and the staff were asked to advise Network Strategies to proceed.

9. Shared Services Unit Reports

Paul noted that the documents have been read and he asked Susi to highlight any important issues before moving on to the premises.

a) Overview of the SSU

i. The unit now and a future view

Susi reported that upcoming issue is contracts with staff. Sandra wishes to become an employee not a contractor, so that will be worked on as well as bringing agreed service level agreements into place with the business units. Documentation of the SSU’s activity is also under way.

September will focus on splitting the finances, and accommodation remains a big issue. Work with Council continues on planning, including the definition of subsidiary reporting requirements (at 17 October meeting). This will assist the EB in its work.  Susi is also working on Statement of Expectations development with Council.

b) Premises Report

Susi noted the SSU shares office space with the ED’s team. There is not enough space. An option Susi has outlined is in the short term. A lot of work is required to resolve this issue. She wants the SSU set up in their own space while the longer run issues are resolved.

Paul clarified that the Registry holds the lease, and the longer term option of where to go with premises is not required. The issue is the short term space problem. He asked the Board what their view is as to what they need to know: where people sit.

Susi noted the first recommendation relates to Part A (the short run issue) and part B relates to the longer term situation. The Board needs to select an option out of whether to create a sound-proof wall, or screens and dividers.

Paul’s view is that in the short term, the cheapest option is the best, and that a short-term solution is indeed required. The space from the Greek Embassy will need comprehensive refurbishment if InternetNZ decides to stay in the building and keep the space.

Keith noted that there is some capital expenditure budget available to finance either option.

RN 14/08: THAT Option 2 be agreed, with the Shared Services Unit moving to Level 10 and spending $11,000 on fit-out and associated expenses.

(Paul Swain / Judy Speight)

CARRIED U

No other issues raised in Susi’s report.

10. International Travel Policy

Paul introduced the issue. He reiterated his internationalist credentials. In discussions with Pete, the only concern that arises is how the relationships are managed in the future. He believes the Council needs to be involved with resolving this.  He noted that there is a lot of activity in this space at the present time, with staff on a range of bodies with leadership responsibilities.

In Paul’s view, international commitments and obligations, strategy and policy should be determined as a whole by the Council, and that to be delegated appropriately to the various business units across the Group. At that point, each business unit can resolve its responsibilities.

Peter noted that such a discussion may open a set of issues that have caused extensive debate in the past, and that it may be difficult to resolve this if opened again. For example, some people have tried to share burden of international work across the group, while another view is that these should be handled by a key coordinating point (the Executive Director). Peter asked Keith where this debate has moved to.

Paul noted first that there needs to be a sensible centre for this international face. That role has been held by the Council, but the structure has now changed. It does beg the question about where this role falls. Does it transfer to the Executive Board? The answer may be yes. Pete Macaulay has advised that the Council is considering this. There are resources and opportunity cost issues to be faced in this area.

Keith made a number of points in response to the discussion.

• The discussion on the Internet history ideally would have preceded this discussion, so having the conversation about the outcome before this groundwork is difficult.
• The constitution of the Executive Board notes international representation as one of the four key responsibilities of the business unit.
• Other business unit representation should be decided by those units based on their needs, with a general Council overview.
• This Board needs the input that arises from its own staff’s engagement in the international arena. Crossovers are not always possible.
• This would not open old debates, as Peter advised, so much as delegating powers back which have already been delegated to the Board.
  

June asked about use of resources, and the “face of”. The missing link is, who is the face of InternetNZ. Is it the Chair? Is it the Executive Director? Is the purpose flying the flag and is it gaining information etc. Resource allocation and who does what due to skills, role, etc is a second issue. Not always one person engaged. If one person plays the fundamental role, then the relationships are dependent on that person as opposed to the entity.

Keith notes that this is an important discussion. No “one person” is a sole dependence point.  Example being ICANN: Jordan attended the March meeting instead of Keith. The next meeting, Keith will take Alison (from DNCL): both examples, there is crossover and broad representation happening.  Staff across the group are engaged. Some of the networks have repaid InternetNZ and New Zealand’s broad economic future many times over.

Peter noted that the face of the organisation was in the past always the President, dealing with “political” issues to do mainly with the formation of ICANN. Any issue which dealt with policy was the Executive Director. Keith noted that the face has changed as the role has changed: most of what the international organisations now do is policy, and so the Executive Director has been the key face.

Peter suggests a question being directed to Council about what are relevant fora, compared with a broader question about roles and responsibilities. One proposal would be to list the Board’s view of what the relevant fora are and seek guidance on this.

Paul will seek further clarification from the President and Council on relevant international fora before the next meeting. June suggests having a paper prepared for the Council to canvass the definition of “relevant” with them.

RN 15/08: THAT the Executive Board:

·         note and endorse the role and relevance of international relationships as set out in this paper; and

·         approve in the interim the existing schedule of planned attendances at international events to 31 March 2009, noting that this attendance is funded from current budgets which may change in the process for setting the 2009-10 Budget; and

·         require that any other international travel (excluding Australia) be agreed in advance by the Executive Board, by request of the staff through receipt of a formal proposal.

(Paul Swain / June McCabe)

CARRIED U

AP 23/08: Chair to seek Council’s view as to which international fora are relevant for the purposes of InternetNZ international representation.

Next Meeting: Wed 29 October, times tbc (possibly 1-6pm), in Wellington.

Meeting Closed: 1.07pm

Signed as a true and correct record:

…………………………………………..

Paul Swain, Chair