Nominet chairman conjures spectre of government intervention to avoid removal

The Public Benefit campaign group dismissed the claims as scare tactics

The chairman of the .uk internet registry operator Nominet has warned members that a vote to remove him and other board members will trigger government intervention.

Nominet's upcoming extraordinary general meeting (EGM) is due on the 22nd March. Members will vote to decide whether or not five board members, including chairman Mark Wood and CEO Russell Haworth, should be removed.

"Removing five directors, including two of the four independents, and pressuring the remaining directors to install candidates outside normal procedures, as the EGM petitioners seek to do, would be a huge step backwards in terms of good governance," Wood wrote in a blog post on Monday.

"We have been warned that instability will be of serious concern to government. We know it would create a scenario which would make intervention more likely."

Wood went on to claim that instability at Nominet could jeopardise its future as a membership organisation.

Nominet, which was founded 25 years ago, is a 'profit with a purpose company' owned by 2,500 members - which includes both organisations and individuals. Members' vote share is relative to the number of internet domains they control.

Some Nominet members are angry with the company's board, over what they describe as "complete mismanagement". They complain that despite a more than 50 per cent increase in the price of .uk domains, Nominet's operating profits have declined 38 per cent. Moreover, the company's charitable donations have fallen: from £5.4 million in 2016 to £1.9 million in 2020. However, the directors have increased their pay by 66 per cent since 2015.

The Public Benefit campaign, which forced the vote, blames the current management for a business strategy that is focused only on profit, despite Nominet being a not-for-profit company.

In an effort to win votes, the Nominet leadership has outlined a series of reform proposals including a freeze in director pay and domain prices for two years; putting more money toward charitable causes; investing more in the .uk registry; and creating a new communications channel for members (it is notable that Haworth previously shut down the members' forum in the middle of a speech at the company's AGM last year).

Critics, however, see the proposed measures as too little, too late - claiming that they came only after it became clear that the current board was going to lose the upcoming vote.

Edit 17/3/2020: Changed the directors' increased pay from 'about 70 per cent' to '66 per cent' after contact with Nominet.