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Fall 2010 Steering Committee Meeting Governance Task Force Report | 2:00-3:30

Fall 2010 Steering Committee Meeting Governance Task Force Report | 2:00-3:30. Governance Task Force. Charter: Propose new governance structure for TSC Chair: Jon Johnson, TSC Members: Jerry Lynch General Mills, Inc. Pete He Henkel Consumer Goods Inc.

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Fall 2010 Steering Committee Meeting Governance Task Force Report | 2:00-3:30

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  1. Fall 2010 Steering Committee Meeting Governance Task Force Report | 2:00-3:30

  2. Governance Task Force Charter: Propose new governance structure for TSC Chair: Jon Johnson, TSC Members: Jerry Lynch General Mills, Inc. Pete He Henkel Consumer Goods Inc. Jay Celorie Hewlett Packard Eric Israel KPMG, LLP Tim Carey PepsiCo, Inc. Don Davidson Safeway, Inc. Mark Spears The Walt Disney Company Karen Hamilton Unilever Jeff Rice Walmart

  3. Governance Task Force Agenda: Future State Process Outcome Vote

  4. Guiding Governance Principles The governance structures that are developed should have the following characteristics • Global in scope, to appeal to companies and stakeholders crucial to the Consortium’s growth • Credible with potential members and key stakeholders • Enable operational efficiency and tangible results • Transparent concerning key decisions and processes (e.g., financial management, research priorities and funding)

  5. Long-Term Plan Three phases of TSC development • Phase I: Start-up (2009-10) • Phase II: Growth and Delivery (2011-12) • Increase membership • Globalize • Professionalize • Deliver on Results • Plan for Phase III • Phase III: Institutionalization and Maintenance (2013-) • Sustainable organizational structure • Independent organization

  6. Phase III Goals • To be the globally preferred provider of common data, standards and systems that improve informed decision making for product sustainability. • To support better decision making across all relevant consumer goods sectors. • To actively engage the world’s premier business organizations and academic institutions. • To be well respected by the broader stakeholder community. • To be an independent organization with a sustaining business model. • To have high membership satisfaction and retention.

  7. Design Principles • Existing Steering Committee is too large for effective decision making; a reasonably-sized Board of Directors is necessary • A strong Executive Director position is needed to coordinate executive and management activities. • Other international universities need to be more directly involved • Founding universities have majority oversight over fiscal and legal compliance

  8. Design Principles • We have two distinct (but related) activities, research and standards development • Since they have different types of needs for involvement and integrity, separate structures are being proposed for each activity • TSC members, who pay for the research, should have a voice in prioritizing research topics and selecting research partners; this needs to be coupled with academic voices to ensure academic integrity • Standards development and approval should ensure that key stakeholder groups have equal voice; paid members should not have undue influence on standards outcomes • These solutions are provisional until they can be codified into a member contract • The Board of Directors will be charged with final design of sector decision rights, external review mechanisms, etc.

  9. Proposal • Proposal to create a governance structure for the Sustainability Consortium • Section 1: Board of Directors • Section 2: Managing Board • Section 3: Executive Director • Section 4: Advisory Councils • Sections 8-12: Legal and Contractual Details • Recommendations (only) to the Board • Section 5: Research Operations • Section 6: Standards Operations • Section 7: Advisory Council Policies

  10. Governance Structure MB BoD ED Phase II (“Expansion and Delivery”) SD RD AS Board of Directors One representative reach from ASU and UA, representatives from 4 other Universities, 5 Corporate Members, 2-4 NGO representatives as non-voting, ED as non-voting Director • Selection of corporate members by election by Tier I corporate members of Tier I nominees (Corporate Advisory Council). • Selection of universities initially by selection by Managing Board, eventually by election from University Advisory Council. • Selection of NGOs initially by Board, eventually by election from Civil Society Advisory Council. Managing Board 1 ASU, 1 UA, 1 Corp. Member Report on compliance issues Executive Director (ED) Standards Director (SD) AD’s assume role in interim Ensure integrity of standards development; Oversee internal and external Sector activities Research Director (RD) Employee of UA or ASU Ensure integrity of research; Oversee all research activities; Helps initiate external funding opportunities Administrative Staff ASU: Operations, Marketing, Accounting, Development UA: Operations, Events, Accounting, Development

  11. Board of Directors Board of Directors One representative reach from ASU and UA, representatives from 4 other Universities, 5 Corporate Members, 2-4 NGO representatives as non-voting, ED as non-voting Director MB BoD ED SD RD AS • Direction and oversight of the substantive decisions of the Consortium • Strategic Direction Setting • Monitoring strategy implementation • Review of candidates and selection of the Executive Director • Determination of research priorities and allocation of research funds to working groups • Ultimate authority over developed standards • Development of policies governing sector decision rights, external review processes and similar operational policies

  12. Board of Directors MB BoD Composition of Inaugural Board • Five Tier I corporate members, elected by Tier I corporate members • Six universities (one seat each, ASU & UA, four international universities) • UA and ASU will occupy seats until other universities selected • Initial appointment of universities by Managing Board in conjunction with Governance Task Force and/or Board of Directors • Two to four NGOs in non-voting capacity (initial appointment by Board of Directors) ED SD RD AS

  13. Board of Directors MB BoD Issues the Board will lead once seated • Selection of Executive Director • Sector decision rights • External review mechanisms • Formal roles of Advisory Councils • Selection mechanism for Universities and Civil Society members • Plan for moving to Phase III-Institutionalization ED SD RD AS

  14. Managing Board Managing Board 1 ASU, 1 UA, 1 Corporate Member MB BoD ED In Phase II, UA and ASU will continue to house and administer the Consortium • The Managing Board will work collaboratively with the Board of Directors, including in the selection of the Executive Director and budgeting. • The Managing Board will have final approval over administrative issues, including: • Compliance with relevant laws and regulations. • Final approval of budgets and financial operations • Final approval of personnel decisions, including hiring the Executive Director and selection of Academic Directors • Composition of the Managing Board will consist of one senior administrator from ASU and UA and a corporate member of the Board of Directors. SD RD AS

  15. Executive Director Executive Director (ED) Employee of ASU or UA Oversight of Administrative, Research, and Standards activities MB BoD ED • The Executive Director will be responsible for overall operational effectiveness of the Consortium • Implementation of strategies developed in conjunction with the Board • Management of the activities of the Consortium • Reporting Relationships • Board of Directors: Strategy and operations • Managing Board: Legal and financial compliance • Standards Director, Research Director, and Staff report to Executive Director • Research Director reports to Board on certain research activities • Selection • Managing Board and Governance Task Force initiate international search • Screened pool of candidates will be presented to the Board in January. • The Board will select the Executive director, subject to approval of the Managing Board, by the end of February SD RD AS

  16. Research Recommendations to the Board Research Director (RD) Ensure integrity of research; Oversee all research activities; Helps initiate external funding opportunities EB BoD ED SD RD AS Sector Working Groups (SWG) SWG Coordinator (academic employee) SWG members (Tier 1 and Tier 2 TSC members) Identify research priorities & partners Consortium Working Groups (CWG) CWG Coordinator (academic employee) CWG members (Tier 1 TSC members) Identify research priorities & partners • Board of Directors allocates research funds to Working Groups based on formula • Working Groups determine funding priorities and partners • Working Group Coordinators provide direct project oversight • RD provides high-level project oversight, seeks synergies across activities, ensures academic integrity. • RD has special reporting relationship to the Board of Directors.

  17. Standards Recommendations to the Board Standards Director (SD) AD’s assume role in interim Ensure integrity of standards development; Oversee internal and external Sector activities EB BoD ED Standards development process: SWG drafts standard Draft Standard open for public comment SWG revises standard and submits to Review Panel Review Panel recommends revision or approves standard Approval Board approves process Standards Director reviews, sends to ED, BOD for final approval--ED and BOD can only reject for process reasons SD RD AS Standards Approval Board – one for all of TSC 4 Tier 1 members representative of all Sectors, 4 NGO/Govt, 4 Academic Process review to ensure standards development process followed TSC Sector Working Groups (SWG) SWG Coordinator (academic employee) SWG members (Tier 1 and Tier 2 TSC members) Work to draft measurement and reporting standard Standard Review Panel – one for each Sector 4 Tier 1 or 2 members, 4 NGOs, 4 Academics Technical review to ensure standards based on adequate levels of scientific support External Sector Working Groups (SWG) Standards drafted by bodies external to TSC

  18. Other • Section 8-General: Approved governance structure cannot require any entity to violate laws or accreditation standards or to jeopardize tax status. • Section 9-Contractual Foundation for Phase II: Establishes the approved governance structure as the contractual foundation for the Sustainability Consortium. • Section 10-Amendment to the MOU: Approved governance structure will amend existing MOU between ASU and UA where relevant. • Section 11-Amendment to Membership Agreements: Approved governance structure will amend membership agreements where relevant. • Section 12-Effective Date: Effective date of the governance proposal is January 1, 2011.

  19. Timeline Proposal presented to Steering Committee October 20 Board Nominations (Tier 1 Only) October 22 Board Nominations Close November 15 Electronic Election of Board December 1-15 First Board Meeting Mid-January Selection of Executive Director Late-February DECEMBER JANUARY FEBRUARY OCTOBER NOVEMBER

  20. Proposal • Proposal to create a governance structure for the Sustainability Consortium • Section 1: Board of Directors • Section 2: Managing Board • Section 3: Executive Director • Section 4: Advisory Councils • Sections 8-12: Legal and Contractual Details • Recommendations (only) to the Board • Section 5: Research Operations • Section 6: Standards Operations • Section 7: Advisory Council Policies

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