Analysis An effort to oust the CEO and most of the board of .uk registry operator Nominet is building momentum within Britain’s internet industry, although success remains far from clear.
Since the proposal to remove all non-elected board members and replace them with two high-profile caretakers was launched at the weekend, those supporting the effort have jumped from 37 members to 83, at the time of writing on Sunday evening, representing 7.3 per cent of all votes. Only five per cent of votes are needed to call an extraordinary general meeting, during which members and the board will face a showdown.
The campaign, which has an online HQ at PublicBenefit.uk, has attracted the support of a number of founders of Nominet, who designed the registry operator to act as a non-profit member organisation that would serve the broader internet community rather than its own corporate interests.
“Provisions were built in to the Articles to make it not for profit and to operate for the benefit of members and as a public service,” said one of those founders, Nigel Titley, while announcing his support for the action. “Sadly these ideals have steadily been eroded and the current board seem to be operating Nominet as a money making machine with little thought to its original purpose.”
Another grandee, Ivan Pope, commented on The Register‘s article forum: “As the person who caused Nominet to be born in the first place and who was elected to the board for the first few years of its life – and as the person who really invented the entire registry business, believe it or not – I totally agree with this attempt to restructure the organisation.
“Closing down the charitable arm with no valid reasoning whatsoever was really the canary in the coal mine. If this attempt fails I guess that Nominet will be stripped bare and privatised over the next few years. Good luck to the organisers of this campaign. I wholeheartedly support them.”
Current members have expressed strong support for the ousting, reiterating the concern that the management of the registry is using its monopoly on .uk domain names to fund unrelated and unsuccessful business ventures while at the same time paying large executive bonuses and slashing the amount of money provided to good causes, something that had long been a core goal for the public benefit organisation.
“Members have been unhappy for quite some time over a range of different issues,” said Netistrar CEO Andrew Bennett, who has frequently clashed with Nominet’s management team over its lack of accountability and concerted push toward commercialism. “Our membership community has been effectively dismantled. Like a kind of vetting agency, Nominet does not want the members to talk to each other. In recent meetings we have seen the chair controlling who gets to talk and when, and vets the questions.”
Bennett says his company “fully supports the PublicBenefit.uk campaign to restore Nominet’s public purpose and we have signed the EGM requisition,” adding that it was “extremely impressed by the calibre and integrity” of the two proposed caretaker directors for Nominet, former BBC chair Sir Michael Lyons and former managing director of regional internet registry RIPE NCC, Axel Pawlik.
Nominet faces showdown with British internet industry: Extraordinary vote called to oust CEO, board
But not everyone is convinced. In an online article, Michele Neylon, the CEO of Nominet member Blacknight, said he would be voting against the proposal, arguing that “ousting the CEO and the MD of registry operations could wreak havoc on the operations of the company and staff morale.”
He also takes issue with the argument that Nominet has to be overhauled to get it back to its original public benefit intent: “While some of them have been pushing the public benefit angle, for others one of their main issues has always been financial. I suspect that for some the wholesale pricing of .uk domain names is their real issue.”
And while admitting that Nominet has “a mixed track record when it comes to handling feedback and input from members and the broader internet community…. from what I’ve seen in various fora the main complaint from the more vocal critics is more that Nominet did not act on the feedback from them. That’s not quite the same thing as not listening to the feedback.”
As for Nominet itself, its chairman and CEO have both argued that firing members of the board would be damaging not just to them and the organisation but the broader UK internet.
“An EGM and change of board at this time would be highly destabilising to Nominet and disrupt a range of fantastic programmes that are currently underway or planned,” argued CEO Russell Haworth in a blog post on Sunday.
“I understand that there are frustrations and disagreements about how we run the business, and we are open to looking at those and making any adjustments that are in the interests of the company and the wider stakeholder community we serve.”
Chairman Mark Wood meanwhile said the move would destabilise Nominet and, for instance, the cybersecurity work it is doing for the NHS, insisting Nominet was “extremely well managed.”
In the CEO’s more unguarded comments, however, members see a discomforting reminder that Nominet’s management has often used its resources and power to attack and undermine members that have raised questions about its direction.
Talking to The Register on Friday, Haworth said Sir Michael “should be ashamed of himself” for agreeing to act as a caretaker director in the event the board is dumped.
“Wow, disappointing to see a knee-jerk ad hominem attack by the Nominet CEO in response to membership concerns about executive pay and lack of accountability,” responded Nominet’s former legal and policy boss Emily Taylor, who had had her own battle with the organisation during an earlier period of internal strife. (Taylor took Nominet to an employment tribunal and in 2012 won.)
Bad old days
Several Nominet members also expressed concern about the operator’s willingness to strong-arm smaller companies, and have recalled earlier fights, particularly when the organisation actively campaigned against election candidates for board positions who had stood on a platform of reform. For many, that conflict represented a low point for the registry operator, and in a subsequent review of the organisation – run by Sir Michael, no less – Nominet’s management was strongly advised to stop interfering in its own elections; a recommendation the Nominet board rejected.
As for the man who spearheaded this latest campaign to force Nominet to return to its member-led and public benefit roots, Krystal CEO Simon Blackler, he told The Register there was a “sense of helplessness” among members who have frequently argued against the direction being pushed by Nominet’s management and who have been roundly ignored.
He called the slashing of money put into public benefit efforts in favor of efforts to enter new commercial markets “unforgivable,” and argued that Nominet’s management is “frittering away” the huge profits the .uk registry banks from the 12 million or so addresses it charges £3.90 apiece a year for at wholesale.
The fact that Nominet “loaned” £4.1m to prop up its other businesses while at the same slashing money to public benefit efforts, increasing executive pay, and building up a £90m reserve is “morally reprehensible,” Blackler argued.
He also rejected Nominet’s main argument that today’s management should be retained in order to maintain stability. “You know what else is stable? An autocratic regime,” he quipped. The UK registry business “largely runs itself,” he argued.
As for the success of the vote, which will need to be held by the .uk operator within 49 days of receiving the official petition, that is likely to depend on three factors: the turnout of Nominet members (just nine per cent of them bothered to vote at the last board election); whether the organisation’s largest members – many of which are publicly listed firms – decide to support the management, go against it, or simply abstain from voting; and whether CEO Haworth is willing to finally listen to his members’ complaints and introduce real reform efforts rather than make vague promises that Nominet members say they have been offered too many times in the past to take seriously. ®