Minutes of the Meetings of the Finance Committee of the Internet Society

A meeting of the Finance Committee of the Internet Society (ISOC) was held on Wednesday, May 15, 2013 at 16:00 UTC. In attendance were Jason Livingood, Chair of the Finance Committee, Bert Wijnen, and Bob Hinden as members of the Finance Committee. David Farber sent his regrets.

Also in attendance were Lynn St. Amour ISOC’s President and Chief Executive officer, Walda Roseman, Chief Operating Officer, Greg Kapfer, Chief Financial Officer, Lynn McNair, Senior Director, Philanthropy and Partnership Development and Sandy Spector, Finance Director. Also present were John Marshall and Trip McLaughlin from Morgan Stanley.

Call to Order

Jason called the meeting to order.

Review of the Investment Policy Statement Revisions

Greg asked for any questions or updates to the revised Investment and Endowment Policies, which were sent to the Finance Committee before the meeting. Greg noted that the Investment Policy, adopted in 2009, had updates to meet current best practices, mirror the format of the newer Endowment Investment Policy, and incorporate suggestions from Morgan Stanley.

Greg walked through the changes in the Investment Policy. Members of the Committee asked and received clarification from Morgan Stanley and Greg on points in the revisions. The Committee particularly requested more information on the fiduciary responsibilities of ISOC and Morgan Stanley, as investment advisors.

Tripp then reviewed the asset allocation table for Continuity Funds, informing the Committee that Morgan Stanley only had authority to invest funds to the Strategic Limit. The Upper Limit gave the Finance Committee more flexibility if so desired or if market return caused the mix of investments to move from the Strategic Limits. Greg pointed out that the Endowment Policy had no change in asset allocation guidelines.

The Committee agreed that revised policies should go to the Board of Trustees ahead of the July 22nd call so the full Board could review the recommended changes to the Policies and to the Continuity Fund asset allocation.

John Marshall and Tripp McLaughlin then left the meeting.;

Review of Q1 Financial Statements

Greg walked the Committee through the Q1 Financial Statements and Management Commentary that included revenue results and expenditure variances. Greg then focused the Committee’s attention on the Supplemental Management Discussion for the impact of grants on ISOC’s financial performance. Greg explained how grants could create sizeable fluctuations and also tend to carry offsetting costs. In order to better analyze the impact grants have on ISOC results, supplemental schedules that separate grants would be shown on a quarterly basis.

Members of the Committee asked for and received clarification on a number of items in the Q1 report.

AOB

Jason called for any other business

Adjournment

With no other business, the meeting was adjourned at 17:00 UTC.