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Rebel Nominet director calls for the heads of Chairman and CEO

.uk in disarray

Internet Security Threat Report 2014

A bitter boardroom battle at Nominet, the not-for-profit company in charge of the .uk domain registry, has escalated, with non-executive director Jim Davies calling for the resignation of its Chairman and CEO.

In an email last week Davies challenged Chairman Bob Gilbert and CEO Lesley Cowley to leave office and open their records for inspection by the membership. He pledged that he would resign if members decide to reappoint the pair.

In the email, addressed to Gilbert, Davies wrote: "I note that neither you nor the CEO have been appointed to your positions by the members. You are unelected. In my view, as an independent non-executive director, you are both unsuited to carry on in your roles.

"I do not believe that it is in the best interests of the company – nor of the UK internet – for you to remain on the board."

Davies, a solicitor specialising in domain ownership disputes, was appointed to the Nominet board in May after a controversial election. His candidacy was openly opposed by Gilbert and Cowley, and some elected members of the Nominet board.

In a statement today, Nominet said: "It is very disappointing that Jim Davies has taken this approach. Jim Davies has made a number of unfounded allegations and we are extremely concerned that he comments on ongoing processes, which are Board confidential. The duty of any Director is to promote the success of the company and not to bring it into disrepute.

"The Board are considering the situation and will respond at the earliest opportunity."

In response to questions from The Register, Jim Davies wrote: "It was the membership who elected me on a platform of cost neutrality, more independent accountability and greater transparency – despite the documented endeavours of the Executive Directors.

"As a further example, the membership have not yet been given the opportunity to decide whether they want to reduce prices and so reduce the "obscene" (Bob Gilbert's description) profits that Nominet makes."

Conflicted interests

Davies was elected by members despite a public attempt to question his ethics by most of the Nominet board. They argued he would not be able to represent the whole of the UK internet community, because of his history representing so-called domainers - who buy and sell web addresses for profit - in trademark disputes. Nominet's constitution obliges it to act in the interests of the internet industry and the government, as well as the domain business.

Almost immediately his directorship was the subject of formal complaints alleging conflict of interest. In a communiqué last month, the Nominet board said he had failed to disclose he was paid a retainer by a large domain registrar. He was also accused of conflict of interest in providing testimony against Nominet in a domain dispute.

The board upheld both complaints and called on Davies to sign written undertakings he would not be found in conflict again. In his email to Bob Gilbert last week, Davies refused to sign, writing: "We could allow the members to decide what legal work they are happy for me to do, in accordance with the Companies Act; although I would add that I think that they already have, since they elected me knowing the nature of my work."

Conflicted interests (again)

The public tit-for-tat between Davies and the Nominet board exposes deeper structural problems for Nominet: it is a membership organisation paid for by its members fees, yet it must act in the best interests of "the UK internet".

At the same AGM where Davies was elected, the board tried to address the conflict with a constitutional change. It proposed to assume new powers to appoint more unelected non-executive directors. Gilbert and Cowley argued the extra appointees were needed to represent the full range of UK internet interests. The resolution did not attract enough member support to pass however.

Nominet is now considered a critical part of national infrastructure and its travails have not gone unnoticed in government. At the end of October we reported how Peter Mandelson's Department for Business, Enterprise and Regulatory Reform had asked Nominet to justify its independence from Whitehall. Many in the domain community expect the government to insist on at least a voice in the Nominet boardroom.

Jim Davies told The Register: "I do not accept that there is necessarily a conflict between the members' interests and the company's obligation to act in the best interests of the UK internet as a whole, at least not one that has been demonstrated in practice. "

We've published his resignation call in full on the next page. ®

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