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Nominet new CEO opens giant can of worms, sticks head in

Meanwhile registry's charitable trust is propped up with exiting Board members

Despite having claimed the scalp of his predecessor and a former chair – and almost forced a government takeover of the company – the new CEO of .UK registry Nominet, Russell Haworth, will look into how his organization is structured.

In just-released minutes [PDF] from a board meeting held last week, Nominet has decided to spend its members' money hiring ex-head of the BBC Trust Sir Michael Lyons to look into "the current stakeholder model and to advise whether this forms the most appropriate foundation for the company’s future."

Lyons will review "whether changing stakeholder expectations, expanded responsibilities as guardian of the .UK namespace, and the company’s diversification strategy, mean that any changes to Nominet's operating model are advantageous or necessary."

It's a bold but possibly foolhardy move on Haworth's part to poke at what has been Nominet's biggest sore point within just months of taking over the job.

The issue of membership in the organization that runs all '.uk' domains, and now a number of other top-level domains, has been going on for almost a decade and has led to furious fights at the Board level as well as within the staff and members.

Crisis? What crisis?

Adding to the sense that the organization has not learnt lessons from its bruising battles over accountability and transparency, the Board minutes also fail to mention another recent controversy: mass resignations at its offshoot, the Nominet Trust.

Last month, the Nominet Trust's chief executive Annika Small, its chair Lord Knight of Weymouth, five of its six trustees and most of its senior staff, all resigned.

So far, little information over the reasons for the exodus have come to light but in a worrying sign that Nominet continues to be run by a self-selecting elite, the same Board members listed in this week's minutes as finishing up their terms next month, Clive Grace and Nora Nanayakkara, have been appointed as chair and trustee for the Nominet Trust. Another former Nominet Board member Sebastien Lahtinen has also been added to Trust, which receives all of its money from excess profits from Nominet (£6m in 2014).

None of this information makes it into the Board minutes, even though it was almost certainly a main topic of conversation at the meeting. Instead, a single paragraph reads:

Nominet Trust: Vicki Hearn, the new Director of the Nominet Trust attended the Board meeting. The Board were pleased to affirm its support for the charitable purposes and excellent achievements of the Trust to date, and looked forward to a strong ongoing relationship with the Trust as it continues to strengthen and grow.

A sordid history

On the membership issue, Nominet's former chair Bob Gilbert first started the ball rolling in 2006 when he proposed changes to the organization's articles to "make the company more flexible and capable of dealing with rapid changes in the internet market".

The changes were seen however as a way to reduce the power of its members and Gilbert and then-CEO Lesley Cowley were embarrassed when the subsequent EGM was a disaster with all three key votes defeated.

Other problems with Nominet's structure were also revealed when it came out that just 11 percent of members had voted and that due to an unusual weighted voting method, just three companies out of roughly 3,000 members had enough votes to collectively veto any decision.

Two years later, simmering resentments boiled to the surface when new Board member Jim Davies called on Gilbert and Cowley to resign for being "unsuited to carry on in your roles".

Davies had been elected to the Board by Nominet's members despite a campaign against him both by the organization's staff and Board, and a failed effort to change the organization's rules to allow them to add non-executive directors they chose to the Board.

Some after, a second Board member, Angus Hanton, resigned also accusing Gilbert and Cowley of mismanaging the organization. Hanton called for a vote of confidence in them both. Davies subsequently quit but only after Nominet sued him.

Davies was followed out the door by Nominet's legal director Emily Taylor and its CTO Jay Daley.

Taylor took Nominet to an employment tribunal and won. On top of a £100,000 payout, Taylor's case shone a light on the dysfunctional inner workings of the organization, which included efforts by the staff and Board to influence an "independent" report into the organization's governance, and collusion between the Nominet Board and the UK government in that same process.

Nominet claimed that it was essential that new changes were made to how Nominet was structured because otherwise the UK government would take the organization over. That approach, it was subsequently revealed, was only decided after a number of meetings between the UK government and Nominet's Cowley and Gilbert.

Heads roll

Gilbert resigned the day after more governance changes were forced through in 2010. But Cowley stayed on, only resigning in 2014 following another two scandals: the sacking of its new chief commercial officer Jill Finney due to her earlier role at Care Quality Commission amid an alleged cover up of the deaths of babies; and a dropped libel case against a Nominet member who used testimony from the Taylor tribunal to highlight contradictory and inconsistent statements by Cowley.

Before Cowley's resignation, matters had also came to a head a second time at the Board level through elections, when the Board and staff took the extraordinary step of actively canvassing against candidates that they did not want on the Board and promoting its two existing Board members. All that led to a rancorous annual general meeting that was repeatedly closed down after the new chair and CEO were repeatedly heckled by members.

While it has been nearly a year since Cowley's resignation and most of the Nominet Board has turned over, Haworth risks opening a huge can of worms by formally revisiting the issue of Nominet's membership for a third time in eight years. Especially since for the first time in several years, the elections for Board members have not been dominated by accusations of misconduct. Not yet anyway. ®

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