Krystal, a web hosting company and registrar, has launched PublicBenefit.UK – a campaign to rescue Nominet, the guardian for 10.8M .UK domain names and one of the world’s top five registries.
The campaign accuses Nominet’s board that it is pouring money into unnecessary diversifications and acquisitions (and their own pockets), instead of reducing .uk wholesale prices.
The campaign has already secured the 5% of voting rights (between Nominet members) required to call an Extraordinary General Meeting (EGM). So far, after a couple of days, 110 Nominet members have signed the campaign that represent 736,593 voting rights (10.4% at the time of writing).
At that EGM the campaign plans to pass 2 Ordinary Resolutions requiring a simple majority (more than 50%) of the votes cast to remove the current Chair, Remuneration Chair and Executive Directors and replace them with new directors. It is interesting to see what will happen at the Extraordinary General Meeting (EGM) as so far none of the 10 members with the most voting rights have supported the campaign. Members include GoDaddy, 1&1 Ionos, TUCOWS (OpenSRS, Enom), Register.com (Web.com, NetworkSolutions), Namecheap, Key-Systems and other well known domain name registrars.
This campaign is exactly what has to happen with ICANN when there are enough people to really want to make a change to the gTLDs. These people are treating non-profits like their own business and increasing domain name prices for their own gain and the gain of their friends’ companies.
Nominet has issued a statement about the EGM.
Restoring Nominet’s Purpose
Despite repeated calls for reform from its own members and self-commissioned independent experts; Professor Bob Garratt in 2008 (report), and Sir Michael Lyons in 2015 (report), Nominet’s executive board could be operating in such a way as to threaten Nominet’s independence.
From 2016 – 2020 they have;
- Reduced public benefit donations 65% (from £5.4M to £1.9M)
- Reduced operating profit 38% (from £8M to £5M)
- Increased Top 3 Director pay 70% (from £1M to £1.7M)
- Ignored members’ concerns and input
- Tried to silence critics, the press and members
As members we have the responsibility and power to ensure that Nominet is run according to its Articles.
The 2 step Recovery Plan
We have a clear and strong path to recovery and continued self-governance;
- Gather 5% of the voting rights to call an EGM.
- At that EGM, pass 2 Ordinary Resolutions (see below) requiring a simple majority (more than 50%) of the votes cast to remove the current Chair, Remuneration Chair and Executive Directors and replace them with new directors.
This new team will have a strong member-backed mandate to implement the Goals listed above, therefore ensuring Nominet flourishes, independent, for another 25 years.
Ordinary Resolution 1
THAT the following persons be removed from their respective offices as directors of the Company with immediate effect pursuant to section 168(1) of the Act:
- (a) Eleanor Hester Bradley
- (b) Russell Adam Haworth
- (c) Benjamin Edwin Hill
- (d) Jane Elizabeth Tozer
- (e) Mark William Wood
Ordinary Resolution 2
THAT, subject to the passing of resolution (1) above), the following persons (who have consented to act as directors) be appointed as directors of the Company with effect from close of the meeting:
- (a) Sir Michael Lyons
- (b) Axel Pawlik
Goals for Nominet
1. Increase Public Benefit Donations
2. Reduce.uk prices (Achieved via reducing Director remuneration and expensive future diversifications)
3. Improve communications with members and listen to their feedback on key topics.
4. Adopt the “UK Corporate Governance Code”.
5. Ensure Nominet remains independent and has a strong financial future.
Nominet at a glance, 2011 onwards
2016 to 2020: Revenue +50%, Public Donations -38%, Top 3 Director pay +70%
Note 1: There’s no 2017 data as Nominet changed its accounting period. As a result 2018 covers 18 months.
Note 2: In the 5 years pre-Haworth (2011-2015) Public Benefit donations totalled £26m. In the 5 years since his first full year of office (2016-2020) Public Benefit donations totalled £9.8m. (That’s down 65%)
- Diversification into ENUM narrowly passes membership vote.
- Closes .uk “consultation”, having entirely ignored member input creating future .uk fiasco.
- Russell Haworth appointed as CEO.
- Prices to rise by 50% from £2.50 to £3.75 “to deal with additional costs”
- Nominet Trust senior management walk out en-masse.
- Sir Michael Lyons’ report calls for increased member engagement.
- Diversifies into Autonomous Vehicles.
- Nominet separates from own Charitable Trust.
- Nominet discounts unwanted .uk domains names to encourage adoption.
- Haworth calls The Register “Fake News”.
- Prices to increase from £3.75 to £3.90
- Nominet shuts down members forum mid-AGM!
- Shutters spectrum management and autonomous vehicle diversifications with 1-liner in Annual Report.
- Nominet acquires CyGlass inc for £5.3 million (on turnover of £85k with annual losses of £2.2M)
Extraordinary General Meeting (EGM)
“The aim? To restore Nominet’s original public benefit mandate, which under previous management donated as much as £7 million a year to good causes.
Sadly, under the recent board led day-to-day by Russell Haworth, appointed 5 years ago, those donations have dropped consistently to below £2 million a year. During the same period Director pay has steadily grown and now exceeds £2M, thereby overtaking what’s being channeled towards public benefit.”
“In the last five years public benefit donations are down 65%, profit is down nearly 40%, yet the top 3 Directors pay is up 70%. Furthermore, wholesale prices have increased over 50%, generating a large cash surplus when prices should have been coming down.
That can’t be right.
To correct this injustice, we’ve drawn up a clear rescue plan that will restore Nominet’s original public benefit purpose and provide it with responsive leadership to ensure an independent future as a financially strong organisation.”
“Nominet was never intended to be a commercial entity. Yet the Directors have treated it like any normal for-profit business, conflating its deliberately narrow purpose to support .uk domains with an inherent requirement to survive at any cost. As a result they’ve poured money into unnecessary diversifications and acquisitions (and their own pockets), instead of reducing prices to minimise profit and sending any surplus towards public benefit donations.”
What is happening?
“We have started a campaign, PublicBenefit.UK, calling for an Extraordinary General Meeting (EGM).
The EGM is being called to pass the following 2 Ordinary Resolutions (requiring 50%):
- To remove the current Chair, Remuneration Chair and Executive Directors
- To replace them with 2 new Directors charged with restoring Nominet to its original character.
A growing number of leading members, acting together under the PublicBenefit.UK banner, as well as some of the original Nominet founders, have come out in support of the action and the 5% voting rights required to call the EGM have already been secured.
If successful this EGM will send a very strong message about what Nominet’s true purpose is (run the .uk namespace), and who it should benefit (members and the wider public).”
Restoring Nominet’s leadership
“The Board is currently made up of the Chairman, 3 Executive Directors, 3 Appointed Non-Executive Directors, and 4 Non-Executive Directors elected by the members. The first resolution calls for 5 Directors to be removed, which will still leave the majority of the board and provide stability.
The second resolution, which will happen immediately after the first, appoints two very experienced interim Directors to begin the process of restoration. The business will continue to operate effectively throughout.
Sir Michael Lyons and Axel Pawlik have offered to stand as interim Chairman and Vice-Chairman respectively. If elected, both individuals have agreed to 12-month, no-bonus contracts with a member vote to re-elect at the AGM in September 2021.
Sir Michael Lyons (Chair)
Former Chairman of the BBC Trust, Sir Michael was commissioned by Nominet in 2015 to carry out an independent review of the organisations membership and corporate structure. The report provided a number of recommendations on improving governance and engaging with the membership to restore broken trust. Most were ignored.
For 20 years Axel was the Managing Director of the RIPE NCC, the Regional Internet Registry (RIR) responsible for overseeing all IP resource management in Europe and the Middle East. A membership organisation, it grew from 1,600 to over 20,000 members during his tenure, and throughout Axel engaged with the membership to shape the organisation. Read more”
It seems to me that for this to win there needs to be something in it for the members, so it not enough to just boot the fat executives but add to the articles of association or whatever document defines this organisation, that they have a duty to reduce costs and not take on unrealistic costs, then pass on those costs to the consumers and registrars in lower pricing.
There is a disease of OPM (Other People’s Money), in the UK it is rife in organizations like the BBC, but also the regulators like OFCOM, OFGEM and the plethora of similar regulators.
If you look at the executive they are super morbidly obese in Directors or non-exec directors.
We all know a non exec directorship is a “gig” you get as any as you can with as few obligations as possible. You sit in at a board meeting, nod and agree mostly without taking on any actual responsibility.
Members or Parliament in the UK are also infected with this disease. George Osbourne has a £600,000 gig on the side of his main job of being an MP, Sajid Javid now has a similar gig for the same amount.
The lefties are at it too, look at the register of interests of any MP and you will see all these little gigs or jollies.
It was bad enough that we spend £11m a year stopping them fiddling £6m a year on their expenses.
What will happen with Nominet is that it will overspend, then we will see another ICANN or .ORG situation where the rent is hiked up by a hedge fund forced sale.