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 Tuesday, November 8, 2011 at 18:00 UTC. In attendance were, Bert Wijnen, and Jason Livingood as members of the Finance Committee. Regrets were received from Eva Frolich, absent due to illness.

Also in attendance were Lynn St.Amour, ISOC’s President and Chief Executive Officer, Greg Kapfer, Chief Financial Officer and Sandra Spector, Finance Director.

Call to Order

Bert agreed to chair the meeting and called the meeting to order. As a majority of the members of the Finance Committee were in attendance, a quorum was present for the meeting.

Review of Q3 Financial Statements and Management Discussion

Greg solicited comments on the draft Management Discussion and quarterly financial statements from the Committee, noting that some questions had been answered in earlier communications. Greg noted that Jason suggested that a high level summary be added to the beginning of the Management Discussion, and Greg agreed to add that to the final document sent to the Trustees. Further discussion was held about specific items in the Management Discussion and in the financials.

Strategic Operating Reserve – Discussion regarding adequacy of current reserve policy

The Finance Committee discussed the purpose and adequacy of ISOC’s Strategic Reserve. Bert suggested soliciting a sense of the Board with respect to these topics. For IAOC reserve specifically, Lynn explained that the IAOC Board had recently discussed matters that might affect IETF continuity. Bert asked about long-term commitments being made on behalf of the IETF and Greg agreed to research termination provisions in major IETF obligations. Lynn commented that ISOC and PIR are currently reviewing issues surrounding use of PIR reserves, which should also be taken into account. Lynn explained that, while PIR’s Board sets PIR’s budget, PIR cannot allocate funds greater than $50,000 for non-operating needs without ISOC’s approval. Lynn suggested that she initiate a discussion of potential reserve needs at the next IAOC meeting. Greg agreed to prepare a list of questions for the IAOC to address their reserve needs.

For ISOC’s reserve, Bert suggested that the Committee seek Board clarification of the purpose of a reserve, specifically whether the Trustees view the Strategic Reserve as a fund to gracefully wind down ISOC, or as a reserve for future strategic programme investments, or both. Bert proposed that questions be formulated for the Board to get a consensus on the intention and amount of the reserve. Greg agreed to provide a draft document. Lynn asked Greg if there was a target delivery date for the PIR reserve analysis. Greg stated that he could have the independent accounting review completed by Q1 2012, but that other implications also needed review.

Investment Policy – Preliminary Discussion leading to Update of Policy

The Finance Committee discussed the current Investment Policy. Greg noted that the Policy was first adopted by the Board in May 2009, and an update was in order. Greg pointed out the chart of targeted investments in Section 7 of the Policy. Bert suggested that the Committee should seek a sense of the Board with regards to types of approved investments of the Strategic Reserve funds prior to making recommendations for amendments to these provisions. Greg agreed to work with Bert on this message. If sufficient input is received from the Trustees, revisions could be put forth for possible adoption at the March 2012 meeting.

Future Meeting Dates and Times

The Committee reviewed the next dates of the Finance Committee meetings in 2012: March 5th (8:00 am Eastern US time), May 7th (8 am Eastern US time), and August 3rd or 4th . Greg suggested that the Committee plan to arrive and reserve time on Friday morning, August 3rd for a Committee meeting prior to the Board meeting in Vancouver.

AOB

Bert called for any other business. Bert pointed out that quarterly financial materials were distributed to the Committee a day later than scheduled, making review by the Committee difficult in the already tight schedule. Greg discussed the tight accounting deadlines for the quarterly closes, and offered that if the schedule proves to be too tight for production of materials, or for adequate Finance Committee review, the dates of the Finance Committee meetings could be adjusted.

Adjournment

With no other business, the meeting was adjourned at 19:00 UTC.