auDA adopts a method whereby any resolution moved at such a meeting has to obtain a majority among both classes of members – Demand and Supply.
On Friday, at an auDA special general meeting, three resolutions seeking the ouster of independent directors were defeated because they did not obtain a majority among Supply class members – though the Demand class members overwhelmingly voted for the three to go.
On a simple majority, all three resolutions would have passed, as 56 voted for and 21 against, with one abstention in the Demand class; in the Supply class, two voted for and 30 against. In the case of the resolution to remove chair Chris Leptos, the figures for the Supply class were one for, and 31 against.
As per the organisation's own definitions, Demand class membership is meant "for domain name holders (registrants), internet users and the general public".
Supply class membership is for "domain name industry participants (registry operators, registrars and resellers)".
Thus it is patently clear that members from the Supply class would hesitate to vote against any management decision as they are dependent on the organisation for their livelihood.
This makes the insistence on a majority from both classes ensure that voting outcomes are something of a farce.
It is something akin to what News Corporation has implemented, where the 381.8 million A stock holders - who held shares worth US$51.1 billion in 2016 - have no voting rights. Only the 199.6 million B stock holders — of which media baron Rupert Murdoch controls 78.7 million or 39.4% of total voting rights — have votes.
It reminds one of the old saw from that famous book Animal Farm: "All animals are equal, but some animals are more equal than others."
Resolutions voted on under this kind of skewed system will never reflect the will of the majority on a given day. Poor turnout at the SGM is no surprise; Australians are generally not inclined to turn up to vote. If the country did not have compulsory voting — and fines for those who do not turn up at polling booths to have their names checked off — even the general elections would see a poor turnout.
It is time that auDA, which was found by a government review in April to be functioning in a way that is not fit for purpose, changes this system if it wants to have at least a little credibility.