Fall 2010 Steering Committee Meeting
Governance Task Force Report | 2:00-3:30
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Governance Task Force
Charter: Propose new governance structure for TSC
Chair: Jon Johnson, TSC
Members:
Jerry Lynch
Pete He
Jay Celorie
Eric Israel
Tim Carey
Don Davidson
Mark Spears
Karen Hamilton
Jeff Rice
General Mills, Inc.
Henkel Consumer Goods Inc.
Hewlett Packard
KPMG, LLP
PepsiCo, Inc.
Safeway, Inc.
The Walt Disney Company
Unilever
Walmart
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Governance Task Force
Agenda:
Future State
Process
Outcome
Vote
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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)
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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
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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.
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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
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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.
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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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Governance Structure
Phase II (“Expansion and Delivery”)
Managing Board
1 ASU, 1 UA,
1 Corp. Member
MB
BoD
ED
SD
RD
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
Report on
compliance
issues
Executive Director (ED)
AS
• 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.
Standards Director (SD)
Research Director (RD)
Administrative Staff
AD’s assume role in interim
Ensure integrity of standards
development; Oversee internal and
external Sector activities
Employee of UA or ASU
Ensure integrity of research; Oversee
all research activities; Helps initiate
external funding opportunities
ASU: Operations, Marketing,
Accounting, Development
UA: Operations, Events, Accounting,
Development
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Board of Directors
Board of Directors
MB
BoD
ED
SD
RD
AS
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
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
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Board of Directors
MB
BoD
ED
SD
RD
AS
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)
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Board of Directors
MB
BoD
ED
SD
RD
AS
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
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Managing Board
Managing Board
MB
BoD
ED
SD
RD
AS
1 ASU, 1 UA,
1 Corporate Member
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.
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Executive Director
Executive Director (ED)
MB
BoD
ED
SD
RD
AS
Employee of ASU or UA
Oversight of Administrative, Research, and Standards activities
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
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Research
EB
BoD
ED
Recommendations to the Board
SD
RD
AS
Research Director (RD)
Ensure integrity of research; Oversee
all research activities; Helps initiate
external funding opportunities
Sector Working Groups (SWG)
Consortium Working Groups (CWG)
SWG Coordinator (academic employee) SWG
members (Tier 1 and Tier 2 TSC members)
Identify research priorities & partners
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.
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Standards
EB
Recommendations to the Board
BoD
ED
SD
RD
AS
Standards Director (SD)
AD’s assume role in interim
Ensure integrity of standards
development; Oversee internal and
external Sector activities
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
Standards development process:
1. SWG drafts standard
2. Draft Standard open for public
comment
3. SWG revises standard and
submits to Review Panel
4. Review Panel recommends
revision or approves standard
5. Approval Board approves
process
6. Standards Director reviews,
sends to ED, BOD for final
approval--ED and BOD can only
reject for process reasons
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
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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.
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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
OCTOBER
NOVEMBER
DECEMBER
JANUARY
FEBRUARY
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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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