Public benefit

Stephenson Law Advises PublicBenefit.UK on Nominet Membership Action

13 September 2021

Stephenson Law has advised PublicBenefit.UK in its successful campaign to remove five directors from the board of Nominet and begin the process of restoring the membership’s faith in an organisation that was established with public benefit at its core.

Nominet was founded in 1996 as the exclusive registry operator for domain names ending in .UK and is the fourth largest country code Top Level Domain (ccTLD) operator in the world, with about 11 million domains under management.

Those familiar with the domain name industry will know that the relationship between Nominet’s board of directors and its membership has been fraught for many years. Supporters of the PublicBenefit.UK campaign objected to increased wholesale prices that ostensibly seemed to be funding increased director remuneration and expensive diversifications that they weren’t consulted on. At the same time, public benefit donations tumbled during the same period, despite public benefit being Nominet’s defining purpose as framed by its constitution.

When Nominet’s former CEO shut down the members’ online forum with immediate effect during its AGM in September 2020, Simon Blackler, the CEO of Nominet member Krystal Hosting, decided enough was enough. He established PublicBenefit.UK to galvanise the membership into taking action to restore Nominet’s public mission and rebuild the trust of the membership.

Having scrutinised Nominet’s articles of association and bylaws in great detail, Stephenson Law advised PublicBenefit.UK on a legal strategy for requisitioning an extraordinary general meeting (EGM), with the objective of removing Nominet’s entire executive board, non-executive chairman and non-executive chair of the remuneration committee. The PublicBenefit.UK campaign’s website was used to collect votes in support of the resolution and to appoint Simon Blackler as a proxy to give the EGM the best chances of success.

The EGM took place on 22 March 2021, when the resolutions proposed by the PublicBenefit.UK campaign were successfully passed with 52.74% of the votes. The membership turnout was 53.5%, the highest in Nominet’s history. In Simon’s letter to Nominet after the vote, he noted that the vote was “undoubtedly a watershed moment in Nominet’s history and demonstrated the resolve of the membership to restore [Nominet’s] original purpose”.

Since the EGM, Nominet has appointed a new chair in former BT Openworld, BT Global Services and Logica CEO, Andy Green CBE, and Eva Lindqvist as non-executive chair of Nominet’s remuneration committee. Both appointments have been welcomed by PublicBenefit.UK, especially following the new chair’s recognition that “Nominet is a public benefit company, and that must be our North Star”. Nominet also held elections for a new Registry Advisory Council, with all six representatives having supported the PublicBenefit.UK campaign.

Stephenson Law’s Ed Boal commented:

“It’s fair to say that in the world of corporate governance, the expression ‘shareholder activism’ has pretty negative connotations; painting out shareholders who disagree with management to be nothing more than troublemakers trying to gain attention. However this was certainly not the case here, where we saw a large proportion of Nominet’s membership – from private individuals to multi-national corporations – uniting around a common and noble purpose: to restore public benefit at Nominet.

The campaign that Simon led was incredibly professional, from the way it engaged with Nominet’s management throughout the campaign through to the way it engaged with the membership itself. It was great to be part of such an important chapter in Nominet’s history.”

Krystal Hosting’s CEO, Simon Blackler, commented:

“We were recommended Ed at Stephenson Law by a mutual contact and I honestly don’t know how the campaign would have turned out without him. From the very beginning Ed became a trusted confidant and integral part of the team, instrumental in helping me understand the legal basis from which we could take action.

Throughout the campaign Ed acted as counsel and sounding board, matching my commitment to the project with his affable and easy-going yet professional attitude. I am genuinely looking forward to the next project that we work on together.”

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