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Nominet Board and the future for member conflicts of interest

Nominet has always had to manage conflicts of interest involving its Board members, particularly its Member Elected Non Executive Directors. This has been entirely managable but some members have questioned whether it is ideal for the company to continue having Board Directors with significant conflicts of interest, such as where their main employer competes with Nominet in the area of registry.

Registry Service Provision

Nominet has committed to remaining active in the Registry Service Provider ("RSP") business. This makes perfect sense given they already have the infrastructure in place. Unlike some other companies that also offer RSP, Nominet isn't a full service RSP but instead prefers to partner with other companies who specialise in front end registry management and marketing; instead focusing its expertise on the backend technologies that registries rely on.

In the past Nominet has had to manage Board Director conflicts of interest where Elected Non Executive Director ("NED") members of the Board have also been employed by vertically integrated domain name industry companies that  competed with Nominet for RSP business. Those directors, despite often not working in the registry part of the business for the competitor they were employed by, were required to recuse themselves from having any association, information or discussion with other Board Directors involving the RSP business of Nominet.

I believe both the Nominet Board and the company secretary have managed these conflicts well with the respective directors s who have been conflicted. Those directors should not have received any RSP business related electronic papers and the rest of the Board remembered to refrain from discussing RSP business specifics with the conflicted directors, as far as I am personally aware.

Can it go wrong?

There is always the potential for mistakes to occur whereby sensitive information identifing potential future customers might accidentally be mentioned in conversation or could pass in front of the eyes of the conflicted director. Furthermore prospective customers of Nominet's RSP might be wary of making prilimary enquires about potentially engaging in RSP business with Nominet if they were currently a customer of a vertically integrated domain industry company that provided their existing RSP and also had an employee who was a Board member of Nominet.

Future Boards

Is it good practice for Nominet to continue employing Board directors that are conflicted because of their employment at other companies, who may also be Nominet members themselves, but also compete with Nominet in areas such as RSP?

What do you think?