Nominet ignores advice, rejects serious change despite losing CEO, chair, half its board in membership vote

Extraordinary response by .uk registry operator effectively dares members to fire the rest of them


Nominet has rejected calls for serious change at the .uk registry operator despite losing its CEO, chairman, and three board members to a membership vote earlier this month.

Members were expecting the board to announce the appointment of two caretaker directors to take over as chair and vice-chair after the stunning upset, especially after acting chair Rob Binns made reconciliatory remarks and promised to take their concerns seriously.

On Wednesday, however, the remaining six board members went the opposite direction [PDF]: they refused to appoint the proposed directors and instead put themselves in charge of a six-month process to replace the fired board members.

Adding insult to injury, management also added two internal staffers – CIO Adam Leach and Company Secretary Rory Kelly – to the board, despite members having just voted a trio of other executives – CEO Russell Haworth, registry managing director Eleanor Bradley, and CFO Ben Hill – off the board a week earlier.

It then took the extraordinary step of naming Bradley, freshly stripped of her board role, as interim CEO following Haworth's resignation.

Since the EGM result means Bradley is not legally allowed to sit on the board, Nominet has placed itself in the unusual position of having a chief executive without a seat on its top-level decision-making body.

The actions, taken without consultation or discussion, have served to highlight the exact issue that sparked the recent EGM in the first place: that those running a membership organisation continue to actively ignore many of their own members’ clearly stated wishes in favor of their own. It will again place the organisation’s board and senior management on a collision course and some members have already called for a second EGM, this time with the rest of the board ejected.

Bigger issue

The escalation was unnecessary but is the result of a fight over Nominet’s very purpose. It is just the latest in a series of showdowns between a management team that wants to use the huge revenues produced by the .uk internet registry to branch off into commercial markets, and a membership that wants Nominet to remain a non-profit focused on its core registry with excess revenue put into charitable ventures.

In previous battles, the management has won thanks to its ability to rewrite corporate documents and use the organisation’s own resources against members. But those victories have come at a significant cost in both money and trust.

Combination of the Nominet N logo over a keyboard with the UK map superimposed on it

Chairman, CEO of Nominet ousted as member rebellion drives .uk registry back to non-commercial roots

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In the most recent EGM, Nominet again used its staff and resources against the campaign (it is estimated Nominet spent half-a-million pounds on its failed effort) but such was the level of antipathy toward its CEO – who, among other things, had shut down the members’ online forum in a fit of pique – that the vote was successful, winning 53 per cent to 47.

The Nominet board collectively opposed the campaign and some board members were openly hostile toward the campaign's goals, leading to calls for them to resign when the vote passed. There were also calls for several senior staff members – including the now interim CEO – to resign in the wake of the vote. But following a week of internal deliberations in which the Nominet board refused to discuss their plans, it appears that self-preservation has again trumped member sentiment.

If history is anything to go by, Nominet’s current board will now seek to reinforce its position. In previous years, the organisation has aggressively managed board elections to ensure that its chosen candidates win, and it has repeatedly changed member voting rights to give it the upper hand.

There is likely to be yet another aggressive election campaign later this year when two of the non-executive directors’ terms end. And with the prospect of another EGM in the offing, Nominet will almost certainly be considering another change to its current three per cent voting cap in order to increase its chances of winning a second protest vote.

Are you listening?

There is a small glimmer of hope: in its letter to members, the Nominet board expressed a seemingly genuine desire to listen to them. Binns began a three-page letter: “I feel I should begin by acknowledging the degree to which trust has broken down between many members and the organisation. Although I am relatively new to Nominet, I recognise that the root cause dates back many years. While we can’t change the past, I hope we can all consider last week’s EGM an opportunity to reset and begin rebuilding the relationship between membership and Nominet.”

He promised the board would be “as open and candid as we can,” and acknowledged that “we must show we are following through on our commitments, listening to your concerns, and, of course, acting in the best interests of the company to deliver on our obligations to the public.” He promised “an accelerated, deep listening exercise among all of our members and stakeholders to inform deliberations as we consider Nominet’s future.”

Unfortunately, however, this is not the first time around this particular roundabout. Last time, Nominet’s board emerged from a pitched battle with its members it promised much the same but failed to come through, in large part because it refused to listen to views it didn’t agree with. The fact that it ran the process through a third party, something it claimed would provide neutrality but in reality only served to prevent direct and frank discussions, was a major factor in its failure.

The time after that, Nominet hired an outside expert – former BBC Trust chair Sir Michael Lyons – to write an independent review into how to resolve tensions and move Nominet forward. It rejected his recommendations [PDF] and this week Nominet has now rejected Lyons a second time: he was one of the two named caretaker directors that members said they wanted installed as chair to help Nominet navigate the post-EGM situation.

Time for reflection

This time around, Nominet’s dysfunctional corporate memory has again returned to the third-party consultation exercise. “We have asked an external firm to lead this work to ensure it is independent and completed rapidly,” Binns notes in his letter.

“The exercise will include quantitative and qualitative research, which we expect will take 6-10 weeks. We will make the findings public.”

At some point, it ought to occur to the Nominet board and senior management that the cyclical member rebellions against them may be more a result of their own actions than those of a “small minority of members,” as the recently ousted CEO Haworth and current Nominet board member James Bladel have continued to insist against all available evidence.

Perhaps while serving as the guardians of the UK’s internet address space, Nominet should consider a famous phrase of one of its most celebrated statesmen. “Those that fail to learn from history are doomed to repeat it,” said Winston Churchill. It could not be more apt. ®

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