A letter sent by auDA chair Chris Leptos to the department's first assistant secretary, Vicki Middleton, in response to a missive from her, said: "We note your acknowledgement that the board observer role may be discontinued once auDA has successfully completed its reforms. It is our expectation that the board observer role will be discontinued once the reforms are completed, and ideally will be discontinued even earlier."
And Leptos added in the letter, which iTWire has seen, "Specifically, it is my understanding that the board observer role will be discontinued when the Department is satisfied that an orderly board process has operated for a period of time."
This appears to contradict the position laid down by the government when it issued its terms of endorsement for auDA last year, following a scathing review in which it said it had found that auDA's membership model and lack of checks and balances had prevented proper decision making, rendering it unable to operate properly.
iTWire contacted auDA on Tuesday night, seeking comment on this issue by 10am on Wednesday. No response has been received until the time of writing.
In her letter, Middleton outlined what functions an observer at auDA board meetings would have, concluding, "These limitations confine the role of the departmental attendee appropriately, consistent with non-voting observer status, and ensure that the observer role does not extend to influencing the independent exercise of the Board's functions."
Leptos said in his letter: "We remain concerned that the board observer, as described in your memorandum, may be considered a ‘shadow director’ under the Corporations Act. This is a concern for auDA, in terms of its role as the independent authority mandated by both ICANN and the Commonwealth to manage the .au namespace, and also for the risk that may attach to the board observer and the Department more generally.
"Without determining the shadow director issue, it would be good practice for the board observer to declare any material personal interest, as is required of directors under the Corporations Act. The chair will request each director, and the board observer, to make such a declaration at each meeting of the board."