The board of .uk internet registry operator Nominet is again under pressure after support to fire the organisation’s CEO and chairman hit a critical milestone.
Over the weekend, and three weeks from an extraordinary general meeting (EGM) in which a vote will be held on whether to remove five of its 11 board members, the vote’s organisers announced they now have the support of 378 members – representing just over 20 per cent of the total membership.
Given decades of low member turnout (rarely more than nine per cent), the support, which is recorded publicly on the PublicBenefit.uk website, points to a virtual certainty that come March 22 the organisation’s CEO and chair will be voted out of their jobs.
The increase in support comes at a critical time: last week, Nominet embarked on an extensive counter-campaign in which it argued the vote was disruptive, damaging and dangerous. In addition to letters sent to every member’s physical address, it emailed members several times expressing strong reservations about the vote and actively highlighted a range of reforms it had promised in light of the EGM.
Many members also reported receiving phone calls, sometimes multiple calls, from Nominet staff who lobbied them to vote No, and the organisation even used its official voting webpage to push its talking points, inserting a video of chair Mark Wood explaining why a Yes vote “creates nothing but uncertainty,” and that “no credible alternative plan has been put forward.”
Not playing fair
That counter-campaign may have backfired, however. In addition to the new members that have said they will vote Yes, one – hosting company Big Wet Fish – has written a blog post slamming Nominet for using the voting process itself to paint a one-sided picture, noting that it hadn’t even mentioned PublicBenefit.uk or any of its five stated reasons for pushing such an extreme measure.
“We’re all for fair elections and will accept the result,” the blog post read, “but you do not walk into a Polling Station at the General Election to be told Vote Conservatives, Labour or Lib Dems inside the polling station! Campaigning takes place outside the polling station. The same principle should be true here.” It said it will vote Yes.
Nominet’s defenders are notably thin on the ground. Thanks to a complex voting system where the organisation’s largest members (those holding the highest number of .uk domains) get more votes than smaller members, it often only requires the largest 10 of approximately 2,500 members to vote in a block for proposed measures to pass or fail.
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So far none of those 10 have said how they will vote but nor have they made any effort to defend Nominet’s current leadership. Even if they did vote as a block, the number of members who have said they will vote Yes is still enough to win, potentially putting the largest members at odds with their own industry.
Outside the top 10 big players, Nominet’s position looks even more untenable. Of the next 10 largest players, six have said they will vote Yes, one that it will abstain and the remaining three have said nothing. More than two-thirds (67 per cent) of the top 50 members have said publicly they will vote to fire the CEO and chair.
Using that momentum, the PublicBenefit.uk campaign had sought to exert more pressure on Nominet’s board. It sent a letter [PDF] to chair Mark Wood on Friday noting his obligation as a chair and director of Nominet to act in the best overall interests of the organisation and its members.
So, what's your plan?
“Faced with the possibility of its entire executive team being removed from office imminently, the board has a clear responsibility to consider what it will do following a successful vote at the EGM as a matter of business continuity,” the letter stated. It asked Nominet to share its continuity plans with the membership prior to the EGM, noting that such a plan was a requirement of security and resilience plans that the organisation has been ISO certified for.
The letter also asked Nominet to state whether it will consider the proposed appointment of two caretaker directors – Sir Michael Lyons and Axel Pawlik – in the event that the vote passes. The campaign had initially proposed a second resolution in which those two men would be appointed once the five current board members had been removed, if the membership so decided through a vote, though Nominet rejected the resolution, claiming it was not lawful.
If Nominet is “unwilling to make such appointments” then the campaign asked Wood to “clearly explain to the members why,” adding: “Alternatively, the membership would be interested to know who the board of directors would appoint to take over the reins, if not Sir Michael and Axel.”
Only Nominet has the results of the voting so far – including how many members have chosen to have Wood act as their proxy – and, much to members’ irritation, it has also failed to publish the exact number of votes each member will receive, which it usually does some time in advance of a vote. That has led to concerns that Nominet’s management is trying to massage voting figures in its favor: a fear that would normally sound overblown were it not for the fact that Nominet was forced to admit last year that it had miscalculated member voting rights for a number of years and then refused to explain how, or provide the raw data, or carry out an investigation into what went wrong.
It is still possible that Nominet could persuade all its largest members that have yet to state a preference to vote No, and stir up enough interest in the larger membership to hand over their proxy votes to the chair to give the current leadership the necessary votes to stay in power. But it looks increasingly unlikely.
There is good reason for that: many Nominet members who have been alerted to the vote by Nominet’s outreach efforts discovered that their main means of communication with their own organisation had been taken offline by CEO Russell Haworth in a fit of pique last September.
An online search will also reveal that Haworth and his executive team have been accused of paying themselves double-digit pay rises while increasing the price of .uk domains, slashing the money that goes to charitable causes, overseeing a drop in operating profit, and embarking on a series of failed commercial efforts in unrelated markets including autonomous vehicles, the internet of things and white space spectrum management.
Nominet’s response to those accusations tells its own story. Rather than discuss or confront them, it has taken out online ads that boost its own websites, presumably to hide those of its detractors; and it has ramped up its social media response, posting dozens of links to a seemingly endless stream of new blog posts (no less than 15 in the month since it heard about the EGM demand) that it’s safe to assume are designed to brush criticism under the carpet.
In short, Nominet’s CEO, senior management and chair are relying on their members to either not care about or remain ignorant of their actions in order to stay in power. It’s not a strategy that appears to be working. ®