Minutes | Meeting of the Finance Committee of the Board (BFC) | 30 January 2024

BFC Attendees: Harald Alvestrand, Maarten Botterman, Edmon Chung, Danko Jevtović (Chair), Patricio Poblete, and León Sánchez

Other Board Member Attendees: Sally Costerton, James Galvin, Sajid Rahman, and Katrina Sataki

ICANN org Attendees: Andre Abed (VP, Relationship and Delivery Management and Interim Head of Engineering and IT), Xavier Calvez (SVP, Planning and Chief Financial Officer), Franco Carrasco (Board Operations Manager), Anna Guseva (Sr. Director – Program Management), Marika Konings (VP, New gTLD Program Lead), Elizabeth Le (Associate General Counsel), Becky Nash (VP, Planning), Vivek Sengupta (Senior Director, Procurement), Amy Stathos (Deputy General Counsel), and Russ Weinstein (VP GDD Accounts and Services)

Invited Guest: Representatives from Bridgebay Financial, Inc.

The following is a summary of discussions, actions taken and actions identified:

1. BFC Workplan – The Committee discussed its workplan, which is on target.

2. New gTLD and Auction Proceeds Investment Performance Review – The BFC received a briefing from ICANN's external advisor, Bridgebay Financial, Inc. ("Bridgebay"), that conducted an independent review of the Auction Proceeds and New gTLD investment program where the review of each investment portfolio included compliance with the ICANN Investment Policy, investment quality and safety, liquidity, controls to reduce risk, performance of the investments, and Environmental, Social, and Governance (ESG) compliance. Bridgebay reported that the decision to manage funds by three firms was primarily a risk mitigation strategy and practical considerations based on the size and nature of the funds involved. Bridgebay also provided an overview of the funds managed by three different firms and their respective portfolios. The total funds range between USD 85 million to USD 100 million distributed across three firms. The BFC discussed harmonizing strategies among the three firms, particularly in managing auction proceeds.

3. Contracting Approval with IT Service Provider Staff Augmentation Extension – ICANN org presented the BFC with a proposal for the renewal of contract with the current third-party outsourcing firm that has been providing development and quality assurance support to augment ICANN E&IT capacity since 2017. ICANN org considered the cost and efficiency of either issuing a Request for Proposal for outsourced IT capacity or further renewing the contract with ICANN's current third-party outsourcing firm and determined that it was more efficient and cost effective to renew the contract with the current firm. The firm's quality assurance and engineering resources consistently deliver with cultural fit, institutional knowledge, and zero turnover. Moreover, retaining ICANN's current third-party outsourcing firm's deep ICANN knowledge, technical skills, and existing resources will ensure business continuity and not jeopardize any committed project delivery dates. The Committee received a briefing of the due diligence that ICANN org conducted in accordance with the procurement process. The BFC determined that the procurement process has been respected and that costs are reasonable and affordable. Following discussion, the BFC approved a recommendation to the Board to authorize ICANN org to enter into a renewed agreement with the recommended vendor.

   • Action: ICANN org to prepare relevant materials for Board consideration.

4. Contracting Approval with Recommended Vendor for Next Round Development and Execution – Edmon Chung recused himself from this discussion, out of an abundance of caution to avoid any perception of a conflict of interest. The Committee considered a proposal from ICANN org to engage the recommended vendor to provide services to help ICANN org build and prepare to operate the Next Round of the New gTLD Program ("Next Round"). The recommended vendor is a long-time partner of ICANN and was a key partner in assisting ICANN with the development and execution of the New gTLD Program 2012 Round. Since the 2012 Round, the recommended vendor has continued to support ICANN's day to day operations as the evaluator of Financial and Technical competence for potential new registries. The recommended vendor is currently playing a key role in the form of providing expertise in business process design, as described in the Program Development section of the Next Round Implementation Plan. ICANN org expects to continue to utilize the vendor's knowledge of ICANN's needs and capabilities for the remainder of the development phase of the Next Round. ICANN org noted that the aggressive implementation timeline of the Next Round necessitates the use of outside expertise while new staff is being brought on board. ICANN org further explained that as ICANN hires and trains new staff to support the latter stages of the development and preparations for the operational phase of the program, ICANN org expects the needs for staff augmentation to decline. ICANN org noted that the vendor participated in the Name Collision Analysis Project discussions but is not a potential applicant in the Next Round and is not a competitor of any existing industry partners. The BFC determined that the procurement process has been respected and that costs are reasonable and affordable. Following discussion, the BFC approved a recommendation to the Board to authorize ICANN org to enter into a contract with the recommended vendor.

   • Action: ICANN org to prepare relevant materials for Board consideration.