Webfusion Ltd, UK
1&1 Internet AG, Germany
GoDaddy.com LLP, USA
Namesco Ltd, Italy
NetBenefit UK Ltd, Canada
Iomart Hosting Ltd, UK
LCN.com Ltd, UK
Daily Internet Services, UK
Key-Systems GmbH, Germany
Fibranet Services Ltd, Isle of Man
Together, your companies control approximately 70% of Nominet’s turnover.
Last year, your 10 companies determined the outcome of Nominet’s director elections. All backed Nominet’s preferred candidates. All but one voted in the same pattern, placing Dickie Armour first and Nora Nanayakkara second. On the face of it, this looks like a coordinated action.
The voting pattern of this small group of commercial interests raises public interest concerns. There are outstanding allegations that some Nominet directors have breached their fiduciary duties. In any company, this would be problematic. In a public interest company, which operates critical national infrastructure, it is of grave concern if a small number of commercial interests can be viewed as shielding serving directors from accountability.
Maria Miller MP’s Department of Culture Media and Sport has refused to get involved in Nominet’s regulation, pointing to the membership as an effective regulator. Given the block voting system, that means your 10 companies. What are you doing to ensure that Nominet’s directors are accountable?
It is clear from last year’s director elections that the majority of members who voted supported two candidates (Lucien Taylor and Graeme Wingate) who promised to investigate alleged breaches of duty by serving directors. The board used company resources to canvass for its chosen candidates (Dickie Armour and Nora Nanayakkara) in more than 5,000 phone calls.
We believe that your companies were involved in meetings with Nominet which were not open to the wider membership prior to last year’s Annual General Meeting. Nominet has failed to confirm whether or not pricing and voting were discussed at these meetings.
Any coordinated action by a small group of dominant commercial interests raises concerns. In this case, it appears to have thwarted the will of the wider membership and protected serving directors from having to answer allegations of breaches of fiduciary duties and potential corruption.
We call on the top 10 members to:
1. Make a public declaration of your company’s commitment to proper accountability mechanisms for Nominet’s directors.
2. Demand a rigorous, transparent and independent investigation into alleged breaches of fiduciary duties by Nominet directors.
3. Confirm whether discussions in top member meetings with Nominet prior to last year’s AGM included pricing and voting in the upcoming director elections?
Your company’s membership of Nominet probably features a long way down your executive agenda. This is natural and normal. We are asking you to consider the impact your company can have on the management and governance of an essential element of the UK economy. Self-regulation and private management of Nominet can have great benefits for many members, but only if the company is seen as a fit and proper guardian of critical economic infrastructure. That reputation remains at risk whilst evidence of wrongdoing continues to be ignored.
You are the effective regulators of this national resource. Half of you are based outside the UK. You are damaging the credibility of self-regulation of this national resource, and I ask you to set aside your private, commercial interests, and hold Nominet’s directors to account. Do your duty!