Resignation of Mr Jim Davies as a Non-Executive Director of Nominet

We acknowledge the resignation of Mr Davies as a Non-Executive Director of Nominet, published on 20th January 2009.  His resignation follows a long-running dispute with the Board about his conduct as a Director following his election in May 2008. Mr Davies has made a number of false allegations in his resignation letter, together with details of sensitive and confidential board and HR matters - a clear breach of his duties.

In December 2008 Nominet issued legal proceedings against Mr Davies to ensure he complied with his legal duties as a director, specifically to avoid conflicts of interests and to act in the best interests of the company.  Legal action was required because he had refused to sign the non-executive director agreement and because the Board was required legally to take action to stop Mr Davies' breach of duties.  Legal action was taken following many requests from the Nominet Board to Mr Davies to comply. He declined to do so and after he put Nominet to the expense of issuing court proceedings and preparing evidence, and four days before the first court hearing, has now resigned.  In our view, the LTIP and employee matters raised in Mr Davies' resignation letter obscure the real issue: Mr Davies failed to declare conflicts of interest, refused to sign the non-executive director contract (which all other non-executive directors have signed) and continued to act against the best interests of Nominet.

We will consider the appointment of a replacement non-executive director in due course.

Long Term Incentive Plan

Mr Davies' resignation letter makes reference to Nominet's Long Term Incentive Plan (LTIP).  The LTIP was approved by Nominet's Board in October 2006 and communicated to the recipients of the incentive at that time.  It is not backdated. The present LTIP cannot fairly be reviewed in the light of today's economic climate, which would not have been known in 2006. 

The LTIP is, by its nature, spread over a number of years and is designed to reward high performance by Nominet senior managers over the long term.  The total amount to be paid under the three-year plan is estimated to be £370,602, which would potentially be shared between all qualifying senior management team members, subject to their satisfactory performance and reaching the targets set. The implication by Mr Davies that any one individual would receive half a million pounds is therefore completely incorrect.

Mr Davies has suggested that Nominet has acted improperly by not asking the members for authorisation before approving the LTIP.  Again, this is incorrect.  Nominet's Board is responsible for setting the remuneration of its employees, including its senior managers, and this is reflected in our current constitution.  With regard to the structure of the Committee and how this maps to the Combined Code, this is part of the current Governance Review, led by Professor Bob Garratt, with recommendations expected in March this year. 

Mr Davies refers to legal advice obtained relating to the LTIP.  We believe the advice received from Mr Davies' lawyers was incorrect and based on incomplete information.  Nominet's lawyers wrote to the lawyers who advised Mr Davies and corrected the assumptions and advice provided.  They have not responded. 

Constitution of the Remuneration Committee

Mr Davies has raised, yet again, the issue of Nominet’s Chairman, Bob Gilbert, being a member of the Remuneration Committee. This issue was dealt with in full in a public statement made in November last year in response to public allegations previously made on this subject. The statement is reprinted below:

Allegations about Nominet's CEO, Lesley Cowley

Mr Davies' letter contains a number of misleading statements about the conduct of Nominet's CEO, Lesley Cowley.  In particular, he suggests that items agreed by Nominet's Board in her absence were overturned or sidelined by her at a later date.  All of these statements are totally without merit and robustly denied. 

Employee Matter

Mr Davies has, in breach of confidence, speculated on the circumstances surrounding the departure of an employee from Nominet.  We treat all of our employees with respect and have chosen not to disclose the circumstances relating to this employee's departure.  As the employee concerned has not discussed this matter in public, and as the matter is only in the public domain because Mr Davies has chosen to reveal confidential information to the public, we do not currently intend to disclose any further information.


We remain committed to ensuring that Nominet is governed according to best practice principles. Our priority remains: to ensure the continued smooth running of .uk and deliver a secure and robust service to our members, registrars and customers.

If you have any questions about this information please contact our Member and Registrar Support team on 01865 332233 or by email to support@nominet.org.uk.