Who would be a board member?

Over the last few weeks there have been a couple of instances of "rebellious" votes in Internet industry bodies that I participate in, and it has got me thinking a bit.

The first was a change in the Memorandum of Understanding for the London Internet Exchange (LINX) Internet Exchange Point. This change, which was a fairly innocuous modification to the the requirements to peer with the route servers, but actually allowed LINX to offer more services to more potential members (and was presented as such), received a number of comments about it diluting the membership and enabling LINX to compete against its members. With reasonable debate on the members email list it was passed by 65 votes to 34 with 10 abstentions (total of 109 votes cast).

The board noted the proportion of votes against, and whilst not bound by it, announced it was intending to follow the UK corporate governance code which 'states that in the event a vote has more than 20% of the votes against a board recommendation or resolution the board should announce what actions it intends to take to consult shareholders and publish within six months an update' (start of page 5).

The second was a change to the RIPE NCC 's charging scheme for 2024. At the moment each member of the RIPE NCC pays a flat fee regardless of their size. Many years ago it used to be based on the size of allocations (to generalise, each ISP across Europe is likely to be a member of the RIPE NCC), but it was changed to a flat fee for simplicity, and because each member has a single vote, each member has an equivalent representation in the company.

Many of the smaller members of the RIPE NCC believe that the flat fee is unfair and they should be paying less for the services they consume as they hold fewer resources. Whereas it could be argued that some of the larger members require less of the RIPE NCC as they are able to manage their interactions autonomously and address space held is a poor metric for use of the NCC's resources in terms of staffing or otherwise. The annual membership fee for the NCC is €1,550, plus signup fees, whereas the cost per member to provide those services is €1,480 according to the NCC's statistics from 2022.

For 2024 the board proposed four different charging schemes. Three of them were flat-fee (with 0%, 5% and 10% increases to the 2023 costs), and one was category-based, which would have resulted in 57% of members having lower fees, but others (ours included) increasing from €1,550 per annum to up to €10,000 per annum if, for example, you held more than a /15 of IPv4 address space. The board recommended that the category-based charging scheme should be adopted, along with two other fees (per-ASN and per-transfer). The RIPE NCC used a single transferrable vote system, so the vote of the "flat fee" proponents wasn't split, but still all of the board's recommendations were defeated. The membership decided to keep a flat-fee system with no increase, and not to adopt either of the per-ASN or per-transfer fees.

The NCC is obviously not bound by UK Corporate Governance Code, but that doesn't mean the board won't be expected to engage with the membership over the vote defeats.

One of the things to note about both of these is voter turnout. LINX has 876 members, so 109 votes corresponds to a turnout of 12.5%. The RIPE NCC has 19,904 members. 2,910 were registered to vote (14.6%), of which 2,423 actually voted, including 57 abstentions, a turnout of 12.1%. This is important as, particularly in the case of the RIPE vote, it shows that if you want to benefit from a reduction in fees, you need to exercise your vote.

When it comes to the board though, in both cases it illustrates the line that the board members have to walk.

Members of an association vote for the Non-Executive Directors they feel will best represent their opinions. However, once on the board, a director's ultimate responsibility is to the company they are a director for. In most cases, these two pulls will hopefully align, and what is best for the company will also be what is best for the membership.

However, that's not always the case. There are times when what is best for the company may only represent a subset of the membership. That may be larger members, smaller members, or members that do or do not provide a particular type of service. In those instances, we have to acknowledge that some decisions will be disliked by some of the members, even if they elected you into position in the first place.

This has led in many instances to not-for-profit boards still seeing their roles as expansionary, but is that necessarily the case? What is the definition of what is best for the company? Is it greater turnover? Is it better interconnectedness? Does that mean locally or globally? How does that work when the organisation is effectively a monopoly in the area it serves?

I suspect the RIPE NCC result was determined by those who turned out to vote, which might tend towards the larger, more established, members that stood to lose out from being in a higher category of the charging scheme. So how do we encourage more engagement from the electorate?

I have limited board experience myself, but the experience I do have is with a board that became split and where discussions were divisive over what was best for the company.

If you are thinking of standing for a board, bear in mind where your ultimate responsibilities will lie, and don't be afraid to ask others what it involves. We, as an industry, need to cultivate good candidates for the boards of the organisations we rely on. That needs education for potential board members, and an understanding of what the responsibilities of a board member are.

If you're a member of a not-for-profit, it pays to think about the breadth of the membership, and the decisions the board have to make to reflect both that and the promotion of the company.