Questions about Nominet Trust’s direction and accountability have led to
Nominet announcing that it is withdrawing from its own charitable foundation that it set up over a decade ago.
What Is Nominet Trust?
Nominet Trust is the charitable foundation that was set up by Nominet, the UK’s domain-name registry, as a way of dealing with the excess revenue from registrations of .uk domain names.
What’s Gone Wrong?
An email sent by Nominet CEO Russell Haworth cites problems with the Trusts “grant-giving, single funder model” which was set up in 2008, as being at the heart of the reason for Nominet wanting to walk away from its own Trust.
It has been reported, however, that some members of the Trust became concerned that, rather than using the money from .uk to find good causes, money may have been used to fund unrelated business expansions, including loss-making ventures.
There was also concern after Nominet raised its prices by 50% for reasons that were unclear to many, and that contacts Nominet had signed to run dozens of new domain registries, may have been won by offering below-market rates.
The announcement of the move away from the Trust by Nominet was accompanied by the resignation of the chair of trustees Natalie Campbell, and by two of its directors, former Nominet board member Nora Nanayakkara, and Jemima Rellie.
Trouble At The Top?
There appears to have been a history of trouble at the top at Nominet with previous CEO, Lesley Cowley, reportedly giving the board members more power over the funds.
Some commentators have noted that the arrival of new Chief Executive Russell Haworth, a former acquisition and venture specialist with no experience of the domain name registry market, brought more of a shift from non-profit with a strong public benefit remit to a profit-seeking investment vehicle.
Mr Haworth’s arrival in 2015 also coincided with the resignation of the entire Nominet Trust team, including the chief executive, chair, several trustees, and most of its senior staff.
It has also been noted that under Haworth’s leadership, the organization appeared to ignore the recommendations of an independent study into its governance that would have given members a greater say in Nominet’s direction.
Nominet’s CEO has stated that the Nominet Trust should now be free to attract other investors in order to fulfil its social tech ambitions, which means that the Trust will become a separate entity with a new name, and with different governance and funding structures. The Trust is reported to be in a healthy financial position and is continuing running its programmes.
Nominet is still willing to be involved as a member of the Trust during the transition period.
It is thought that the new version of the Nominet Trust will be led by new Chair Bill Liao, who joined the Board back in 2014. It is reported that Mr Liao has the full support of Trustees Sebastien Lahtinen, Beth Murray and Hannah Keartland.
What Does This Mean For Your Business?
It seems that a change in CEO, the focus way Nominet now does business, and most probably the culture (after resignations) and power shifts, and led to questions which, in turn led to the registry and its Trust going their separate ways.
Nominet was set up as a non-profit, public-interest, government-designed operator of the UK’s internet registry, and the Trust was set up to make use of money for good, charitable causes. It is important that organisational structures of this kind maintain accountability and transparency, and that the original charitable focus of Trusts is protected by members who have enough power.
Although businesses and charities need strong leadership, too much power at the top, and power and focus wasted on internal struggles can cause problems for the health of an organisation. As it stands, Nominet has a stable annual revenue of £30m, and the Trust (and the good causes it gives to) have benefitted from £44m since 2008. The hope is, therefore, that the change will mean stability restored to the Trust and that any problems with direction and accountability can be investigated and put right.