Analysis By being uncooperative and opaque, Nominet is opening itself to allegations that it manipulated the outcome of next week’s vote to fire its CEO and board chairman.
In a call on Wednesday, just two working days before Monday’s crunch vote by members on the fate of the board, Nominet’s company secretary Rory Kelly told Krystal CEO Simon Blackler, who has led the PublicBenefit.uk campaign against the current management, that Nominet will not provide members a list of their voting rights – the number of votes they will each cast.
For those who don’t know, Nominet members are each assigned a number of votes calculated [PDF] from the number of paid-for domain names they each have on the books and the total number of domains registered. So, if you’re a Nominet member and you’re assigned 6,502 votes, that’s how many you’ll cast when voting on the upcoming EGM resolution to cull the board.
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We understand Kelly told Blackler that Nominet will only provide these rights alongside the results, though, prompting Blackler to ask how Nominet could justify telling its members how many votes they were each casting only after the vote had been concluded. Kelly said the delay was due to Nominet checking the tabulations were correct.
There is no good reason for the delay, and in the past Nominet has always provided voting rights details before any vote, usually a month in advance. Thanks to the complex voting system run by the organisation, the number of votes held by each of its 2,500 members vary significantly, and are calculated in advance then published before any vote to provide transparency and accountability.
The issue is of such significance that the PublicBenefit.uk team has sent several letters to Nominet’s board over the past month asking for clarity on the issue, and one member has lodged a formal complaint against the organisation after his requests for the same information were repeatedly ignored. That member, Andrew Bennett, was also informed on Wednesday that the board will only address his complaint after the extraordinary general meeting (EGM).
The issue is not academic: in 2020, Bennett discovered Nominet had wrongly calculated voting rights for the two prior years, giving a disproportionately large number of votes to its largest members. Those members are expected to vote in favor of keeping the CEO, chair, and three other board members in place.
While most Nominet members receive an average of 5,000 votes each to cast in board elections, in 2019, the largest registrar, GoDaddy, was given 5.2 million; a figure that was reduced to 3.6 million after Bennett noticed the discrepancy and complained. At the time, Nominet snubbed demands for an investigation, and said only that “the error had its origin in the treatment of multiple part-payments for domains… as a result of a coding change.” It also said the miscalculation had no effect on the outcome of the board elections due to other rules in place.
At the EGM next week, an individual member’s vote will be capped at three per cent but taken across the entire membership, a similar miscalculation could easily result in a yes result turning into a no – especially if one was, say, able to adjust the figures after the event.
In the phone call on Wednesday, we understand Kelly said he did not know the date on which the company had decided to tabulate the voting rights, though as company secretary, he really ought to know.
Three-quarters of the votes allocated to individual members are calculated by the number of .uk domain names each member holds at a specific time. Those numbers vary significantly day-to-day in a registry in which there are just under 11 million names, most of which are renewed every year.
The number of domain names held by each member at any given time are contained within a constantly updated database. Since running that database is Nominet’s entire core function, it would be fairly easy for the organisation to create a program that ran final voting tallies against the domains database again and again over time, selecting a day in which Nominet received the highest possible number of votes in its favor from those members who backed it. Nominet could then claim after the fact that that was the day it had decided to tabulate voting rights.
In other words, Nominet could pick a moment in time when the registrars that voted against the sacking of the CEO and board chairman have sufficient votes to cast to block that resolution.
It’s difficult to know what the effective shift in votes of one day over another would be but Nominet would have a full month to pick from and with the vote expected to be tight – the resolution requiring 50 per cent of cast votes to pass – even just a few percentage points could see Nominet CEO Russell Haworth and chairman Mark Wood retain their highly paid jobs rather than be unceremoniously booted from the organisation the next day.
That’s not to say this manipulation will happen or there’s a suggestion this will happen; it’s that there is a concern that Nominet has created a situation in which it could be possible due to its lack of transparency.
Nominet has also told members that it will only provide the results two hours after the EGM has ended. “Our election scrutineer Civica requires two hours to count the votes, due to the complexity of the voting and the record turnout,” it said in an announcement of the EGM on Wednesday.
“Therefore, the meeting will be concluded once voting closes. The results of the vote will be announced via Twitter, the Nominet website, and an email to members when the count is complete.”
That’s not all, however.
Nominet is also expected to use its control of the EGM, and the fact that it cannot be convened in person due to COVID-19 pandemic restrictions, to skew the process in its favor, it is feared.
Blackler said he was asked to provide a three-minute video outlining his case to members that would then be played during the EGM, with Nominet also providing a three-minute video from one of its non-executive directors arguing against the resolution.
The upshot of that approach, however, was that Blackler was told he would not be able to appear live during the EGM itself. When Blackler made it clear that he wanted to deliver his arguments and potentially answer member questions live, we understand Kelly told him Nominet may not be able to do so because of technical limitations.
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Not only that, Nominet also intends to limit the amount of time available to members to ask questions – Kelly would not be pinned down on the exact amount of time, we understand – and the company secretary said Nominet would prioritize written questions that had been sent in advance.
That approach is a time-honored tactic used by companies to avoid difficult or challenging questions: a moderator can claim to have received a wide range of questions that they ask corporate representatives – invariably softball questions – before saying they have run out of time and so cannot get to the tougher ones. It is a system that Register reporters run into on an almost weekly basis.
When told in clear terms by Blackler that he wished to speak live at the EGM and be in a position to ask any questions posed by members over the reason for bringing the EGM, Kelly told him he would take his request back to Nominet’s chairman and ask for clarification.
We have asked Nominet to respond to this version of events that we understand occurred between its company secretary and PublicBenefit.uk’s Simon Blackler, and will update this story if it responds. ®