The Turnbull Government will oversee broad based changes to the body that oversees the operation of Australia’s .au domain, including reforms to its membership structure after a review into the body found that its management framework was no longer effective.

The findings come amid heightened tensions between not-for-profit body .au Domain Administration (auDA) – which oversees the .au extension used by thousands of Australian businesses operating on the internet – and some of its members, a cohort of which recently demanded a special general meeting in an attempt to pass a vote of no confidence in CEO Cameron Boardman.

In response to the review auDA has postponed a controversial direct registration plan that would enable Australian businesses to register domains ending in .au rather than com.au until the second half of 2019.

The body had been consulting with its members on the plans in recent weeks, causing longstanding tensions between it and critics to boil over.

The Department of Communications and the Arts’ review identified a series of problems with the organisation and made 29 recommendations relating to improving transparency, representation of stakeholders and trust in the .au domain.

The review presented the Government with two options for implementing its recommendations, either issuing a new terms of endorsement (TOE) to mandate changes to the body or seeking a replacement organisation for auDA.

The Government has accepted all 29 of the review’s recommendations and Minister for Communications Mitch Fifield has written to auDA’s new chairman Chris Leptos requesting their compliance with a new TOE.

“The central finding of the review is that auDA’s current management framework is no longer fit-for-purpose and reform is necessary if the company is to perform effectively and meet the needs of Australia’s internet community,” Fifield said of the review.

“The Government has issued modernised terms of endorsement to auDA, reflecting changes to the digital landscape.”

The new terms dictate that auDA must support multi-stakeholder engagement and be administered in the public interest, while also outlining a variety of areas where the organisation can modernise its operations.

The Minister has given auDA two years to implement changes outlined in the new terms, which reflect recommendations made in the review, and will conduct formal evaluations on progress at six-month intervals.

Membership model to change

auDA welcomed the findings, which it said identified the need for “urgent reform” to modernise the body.

“The review outlines a roadmap for a series of important reforms that require comprehensive engagement with auDA members and broader stakeholders over the next 24 months,” Boardman said.

“It is a vitally important public asset that needs to be administered in the best interests of Australia’s 21 million internet users and the wider community.”

The review recommended that the body’s current membership model, which splits its 303 registered members into two classes – demand and supply – be dismantled and replaced by a “non-discriminatory” single member class under a functional constituency model recommended by auDA itself.

Demand class members are those who buy domains.

auDA said the review found that the body’s current membership model was impeding its decision making and contributing to organisational instability.

Jim Stewart, chief executive of digital marketing firm StewART Media and a signatory to the letter calling for Boardman’s resignation, also welcomed the findings.

“They address a lot of the issues members have been complaining about, specifically Board structure and communication with the members,” Stewart told Internet Retailing.

The review also recommended that a nomination committee consisting of industry, business sector, consumer and commonwealth representatives be created to oversee a merit-based board appointment process – stipulating the need for a balanced board.

Stewart welcomed this change, referencing allegations of board stacking in the favor of supply members in the past.

“There have been allegations of Board stacking in the past, so the move to a different membership structure and a more independent board through the establishment of a nomination committee is welcomed,” he said.

There are currently four supply class representatives on the auDA board, as well as two demand class members and three independents, according to auDA’s website.

Stewart said the board had been stacked since last September when a demand class member left, leaving a vacant seat that has yet to be filled.

The cohort of members calling for a vote of no confidence in Boardman are still confident their motion will pass at the forthcoming special general meeting, due in the next two months.

Allegations of impropriety

Serving as a backdrop to the forthcoming special general meeting are allegations of inappropriate conduct by former directors of auDA, which have been referred to Victoria Police.

In a 150-day update provided to auDA members last week chairman Chris Leptos said the practices he had been briefed on warranted the referral.

“I am disappointed to advise you that in my first week as Independent Chair I was briefed on a number of practices of several former auDA directors. Your Board concluded that those practices warranted referral to the Victoria Police. As you would appreciate, it is not appropriate at this stage to provide further details regarding this matter,” Leptos said.

But Stewart has savaged auDA for its handling of the allegations, suggesting that Leptos’ timing in taking the matter public “seems like a witch hunt” and is designed to scape goat previous management for what he sees as the failings of its current leaders.

“These are just rumours without any substance,” he said.

“They’re trying to sway the membership to not vote them out at the coming special general meeting and they’re doing it with innuendo.”

auDA declined to comment on Stewart’s claims.

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