A meeting of the Finance Committee of the Internet Society (ISOC) was held on Wednesday, September 11, 2013, 2013 at 15:00 UTC. In attendance were Jason Livingood, Chair of the Finance Committee, Bert Wijnen, David Farber, Rudi Vansnick and Lynn St.Amour (ex-officio) as members of the Finance Committee. Also in attendance were Walda Roseman, Chief Operating Officer, Greg Kapfer, Chief Financial Officer and Sandy Spector, Finance Director.
Call to Order
Jason called the meeting to order.
Review of Q2 Financial Statements & Management Reports
Greg walked the Committee through the Q2 Financial Statement results including explanation of the year-to-date $916K net surplus and $1.2 million revenue shortfall, partially due to lower than budgeted PIR 1-2 character sales. Greg also addressed the Company’s 2013 forecast, including the steps management is taking to reduce 2013 expenses to ensure ISOC meets the net surplus target for the year.
2014-2016 Business Planning Process
Greg explained ISOC’s 2014-2016 business planning process as outlined in the status report that was also supplied to the Board for the September 16 Board call. The principles from the “High-Level Budget Envelope” delivered by this Committee will underlie the fiscal assumptions of the 2014 Budget. Senior Management is currently vetting 2014 Budget elements including Revenue, IETF Support, PIR Funding and CEO Transition Costs. All factors will be used to determine methods to close a currently estimated $2-3 million 2014 budget gap.
Rudi asked for clarification of the use of a new budget line item to allow for CEO budgetary discretion for 2014. Lynn stated that the use of these funds would adhere to the Delegation Policy as do all expenditures. The Committee suggested that this should be clarified in the Budget submission.
Suitability of Use of Non-Recurring funds – Regionalization
Walda walked the Committee through Management’s proposal to use the Non-Recurring Funds for ‘Regionalization’. Walda explained Regionalization was meant to increase ISOC’s presence in the regions by reaching out to local resources for engagement and financial support. The plan over time would include increased memberships and partnerships and tapping into local grant opportunities. These additional resources would allow the current regional staff to focus on larger regional issues including policy. Over the long term, Regionalization would build more sustainable revenue sources, strengthen the membership and chapter base, give partners local knowledge and give ISOC greater global credibility. Lynn sited the success of INET Bangkok as a positive ‘Regionalization’ example.
Members of the Committee questioned the proposed increase in headcount for this Regionalization effort and agreed to discuss the plan with the full Board at the September 16 Board of Trustee meeting.
Morgan Stanley Recommendation for Investment Transition
Greg summarized Morgan Stanley’s transition strategy to move ISOC Continuity Funds holdings to the new investment guidelines including investments in equities. This transition would be to invest maturing short-term bond funds into equities, and reviewing intermediate bond funds for possible liquidation over the next several months.
AOB
Jason called for any other business.
Adjournment
With no other business, the meeting was adjourned at 16:00 UTC.
All Board Finance Committee Meeting Minutes