board members: agenda london & middlesex housing … · 2018-12-07 · corporate boardroom 1299...

Board Members:

Sean Quigley, Board Chair Marci Allen-Easton, Vice Chair Anna-Marie Evans, Director Larry Ducharme, Director Anna Hopkins Director & City of London Councilor Vance Blackmore, Director Deb Peckham, Director

AGENDA

LONDON & MIDDLESEX HOUSING CORPORATION (LMHC)

Board of Directors Meeting

Corporate Boardroom 1299 Oxford Street East, Unit 5C5

London, Ontario

Thursday, November 22, 2018

4:30 P.M. – 6:30 P.M

Regrets R.S.V.P by November 16, 2018

To Laura Palmer at 519-434-2765 ext. 241

or email [email protected]

mailto:[email protected]

LMHC Board Meeting Agenda - November 22, 2018 of 3

Item Lead Time

1) Board Only Session S. Quigley 4:30

2) Call to Order S. Quigley 4:40

3) Recognition of Indigenous Peoples and Lands S. Quigley

4) Completion and Acceptance of Agenda S. Quigley 4:45

5) Disclosures of Interest S. Quigley 4:45

6) Approval of Minutes Previous Meeting S. Quigley 4:50

7) Delegations

8) Communications

a) LMHC Housing Policy Research Award for 2018 J.Browne 4:55

b) City of London Strategic Plan Launch J. Browne 5:00

9) Reports and Business

a) Business Case: Safe Consumption Facility S. Patterson 5:05

b) Update from the Chair S. Quigley 5:15

c) Governance Committee Report for November 5, 2018

Enclosures:

Staff Report 2018-34: Board Assessment

Staff Report 2018-38: Board Succession Plan

L. Ducharme 5:20

d) Finance & Audit Committee Report for November 6, 2018

Enclosures:

Staff Report 2018-36: 2019 Provisional Budget- Operating

and Capital

L. Ducharme 5:35

e) Human Resources Committee Report for November 19,

2018

Enclosures:

5:45

f) Southdale Healthzone Clinics Update Presentation J.Browne/ N.

Turner

5:55

10) New Business / Enquires S. Quigley

11) In Camera Matters 6:00

a) Board Meeting Minutes of October 25, 2018 S. Quigley

b) A matter pertaining to an identifiable individual or group

with respect to confidential matters that may be subject to

legal advice and privilege

S. Quigley

12) Report on In Camera Matters

S. Quigley

13) Date of Next Meeting

The next Board Meeting is scheduled for Thursday, December

13, 2018

S. Quigley 6:20

14) Adjournment S. Quigley

LMHC Board Meeting Agenda - November 22, 2018 of 3

15) Board Only Session (if required)

Recognition of Indigenous Peoples and Lands Statement

We would like to begin by acknowledging the treaty territory of the Anishnaabeg, which is defined within the pre-confederation treaty know as the

London Township Treaty of 1796. Throughout time, this region has also become the current home to the Haudenosaunee and Lenni-Lenape Nations.

LMHC Board Meeting Page 1 of 4 October 25, 2018

BOARD OF DIRECTORS MEETING Thursday, October 25, 2018 at 4:30 PM

London & Middlesex Housing Corporation Boardroom 1299 Oxford St. E., Unit 5C5 London, ON.

Board Members Present: Senior Staff Present:

Guests S. Patterson, Sylvia Patterson Consulting

Meeting to Order

The Chair called the meeting to order at 4:56 p.m.

Completion and Acceptance of the Agenda

With regard to the completion and acceptance of the agenda, that it be APPROVED and ACCEPTED as amended:

i. Addition of an In Camera matter pertaining to an identifiable individual with respect to a confidential matter that is subject to legal advice and privilege

CARRIED.

Declaration of Conflict of Interest

The Chair called for declaration of conflict of interest with respect to the agenda. There were no conflict of interests declared.

Board Meeting Minutes of September 27, 2018

With regard to the Board Meeting Minutes of September 27, 2018 D. Peckham moved, seconded by M. Allen-Easton that the Board Meeting Minutes of September 27, 2018 BE APPROVED noting the minutes are to reflect the Board-only session took place before the meeting was called to order. CARRIED.

Delegations

Safe Consumption Facility Business Case Update by S. Patterson

With regard to the Safe Consumption Facility Business Case Update Presentation by S. Patterson, A. Hopkins moved, seconded by V. Blackmore that the Safe Consumption Facility Business Case Update Presentation by S. Patterson BE RECEIVED. CARRIED. S. Patterson exited at 5:50 p.m.

S. Quigley Board Chair M. Allen-Easton Vice Chair L. Ducharme Director A. Hopkins Director & City Councillor V. Blackmore Director & Mayor Southwest

Middlesex D. Peckham Director

J. Browne Chief Executive Officer A.Mackenzie Director, Tenant Services N. Turner Director, Asset

Management J.Cuylle Manager, Finance S.Campbell Interim Director, Community

Engagement L. Palmer Recording Secretary


Communications

KPMG’s Service Review of the City of London

With regard to KPMG's Service Review of the City of London, A. Hopkins moved, seconded by V. Blackmore that the City of London Service Review Presentation to Operational Leads as completed by KPMG BE RECEIVED. CARRIED

Confirmation from City of London regarding Board Member Resignation

With regard to the communication from the City of London Confirming a Board Member Resignation, M. Allen-Easton moved, seconded by A. Hopkins, that the communication BE RECEIVED. CARRIED.

Finance & Audit Committee Report for October 17, 2018

With regard to the Finance & Audit Committee Report for October 17, 2018 L. Ducharme moved, seconded by D. Peckham that the report BE RECEIVED noting LMHC’s 2019 approved operating funding will not be reduced by the cancellation of Cap-and-Trade as previously communicated by the City of London. CARRIED.

Staff Report 2018 -30: HSC Insurance Program

With regard to Staff Report 2018-30: HSC Insurance Program, A. Hopkins moved, seconded by V. Blackmore that LMHC’s 2019 Insurance Program BE APPROVED by confirming the CEO execution of the 2019 Insurance Programs documents as the 2018 program expires October 31, 2018 and the 2019 program takes effect November 1, 2018 noting:

i. The award is consistent with the Board’s decision not to receive a non-solicited quote from another insurance provider for the 2017-2018 renewal;

ii. The program meets the related requirements/expectation of the Shareholder Declaration/Service Agreement;

iii. The program is consistent with the expiring insurance, save an except a net number of market improvements; and

iv. The renewal program cost for insurance is $500,988 or $21,263 more than 2017/ 2018

CARRIED. With regard to Staff Report 2018-30: HSC Insurance Program, D. Peckham moved, seconded by A. Hopkins that the continuation of the agreement with the City of London for the management of risk management services associated with LMHC insurance program, including the requirement to contribute to a City-held reserve fund for self assurance,BE CONFIRMED noting the reserve fund is used to satisfy LMHC insurance policy deductible requirement and the annual contribution for 2019 is expected to be approximately $120,125. CARRIED.


Staff Report 2018-31: Adjusted June 2018 Capital Works

With regard to Staff Report 2018-31: Adjusted June 2018 Capital Works, M. Allen-Easton moved, seconded by V. Blackmore that the following actions BE TAKEN:

i. APPROVE amending the 2018 Capital budget to include two

additional projects, one for Tech Support Upgrades (software/

hardware) for $175,000, and Consulting Services for the Asset

Management Plan for $25,000, with funding of same coming from

the LMHC Capital Reserve Fund, held by the City of London.

ii. APPROVE requesting $595,743 in SHARP/SHIP Funding supporting

related capital expenditure for SHARP/SHIP projects, noting if the

funding is not receive the $595,743 will be funded from the LMHC

Capital Reserve Fund held by the City of London.

iii. APPROVE amending the 2018 Capital Budget to include funding

(budget) reference of $83,700 for active carry-forward projects from

prior years (regarding projects 2017-0038; 2017-0046; 2017-0037;

2017-0040; 2016-0011; and 2016-0003), noting the funding

reference was previously approved by the Board.

iv. APPROVE requesting $490,811 in SHARP funding for Boiler

Replacement (a SHARP approved project) previously funded from

the LMHC capital reserve fund, held by the City of London, noting if

received the $490,811 would be returned to the reserve fund.

v. APPROVE the June 2018 Capital Works Report as amended per (i)

through (v), noting the amended 2018 Capital Budget provides for

capital investment of $6,910,286 covering 49 projects.

CARRIED.

Tenant Engagement Strategy Presentation

With regard to the Tenant Engagement Strategy Presentation, M. Allen-

Easton moved, seconded by A. Hopkins that the Tenant Engagement

Strategy Presentation BE RECEIVED.

CARRIED.

In Camera Matters Consistent with the provisions of Section 239 of the Municipal Act, A. Hopkins moved, seconded by D. Peckham that the Board move In Camera to discuss:

i. In Camera Board Meeting Minutes of September 27, 2018

ii. A matter pertaining to personal matters about an identifiable

individual with respect to Board-related matters

iii. A matter pertaining to personal matters about an identifiable

individual with respect to employment-related matters

iv. A matter pertaining to an identifiable building that would be subject to

confidential matter that may be subject to legal advice and privilege.

CARRIED.


Report on In Camera Matters

At the In Camera Session the Board:

i. Approved the In Camera Board Meeting Minutes of September 27,

2018

ii. Reported progress on a matter pertaining to an identifiable building

that would be subject to confidential matter that may be subject to

legal advice and privilege

iii. Reported progress on a matter pertaining to personal matters about

an identifiable individual with respect to employment-related matters

Date of Next Board Meeting

The Board confirmed the date of the next meeting as November 22, 2018 or at the Call of the Chair if required earlier.

Adjournment M. Allen-Easton moved, seconded by A. Hopkins that the meeting be adjourned at 7:38 p.m. CARRIED.

S.Quigley Board Chair J. Browne, Chief Executive Officer

Emily Halldorson

Emily Halldorson Bio

Emily is from the North End of Winnipeg and is pursuing her Masters in City Planning

from the University of Manitoba. Her current work focuses on supportive housing for

criminalized Indigenous women, and explores new roles for planners in social justice and

reconciliation. Inspired by her work with the Elizabeth Fry Society of Manitoba and her

dedication to community-led change, Emily is interested in the use of community alternatives to

incarceration and addressing the over-representation of Indigenous peoples, especially women, in

prisons.

Emily’s background is in community development and community-based research. She

has been involved in many community development initiatives, including literacy programming

for Indigenous and newcomer populations in inner city Winnipeg. Her research work has focused

on refugee housing and resettlement, and on non-traditional adult education programs for

Indigenous peoples. She holds an Honours Degree in Political Science from the University of

Winnipeg.

City of London

Strategic Plan LaunchNov 12, 2018

Today’s Agenda

• Welcome, Introductions and Purpose of Today

• Strategic Plan 2015-2019

• Strategic Plan 2019-2023

• Timelines and Deliverables

• Tools and Resources

• Seeking your Input Today:

• PEST

• Priorities for the next 4 years

• STT Liaisons

• Next Steps and Future Meetings2

Strategic Plan 2015-2019

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Strategic Plan 2015 - 2019

• Within the first 100 days of taking office, Council approved the 2015-2019 Strategic

Plan.

• Identifies a shared vision, mission, and strategic areas of focus in order to guide the

work of Council and Administration over the Council term.

• The Strategic Plan also included a commitment to report regularly to Londoners on

progress towards implementation.

• This was the first time, Council integrated the 2015-2019 Strategic Plan with the 2016-

2019 Multi-Year Budget. This supported more strategic decision making for the term of

Council, where strategy drove financial and business decisions.

• Thank you for your commitment over the last 4 years providing updates on progress and

accomplishments as we reported semi-annually to Council.

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What we Learned

• Build on the current plan, don’t start from scratch

• Inclusive and broad community engagement is important

• Deliberate link to the budget is critical

• Current Plan is easy to read

• Timeline was quite aggressive – rushed

• Consider how to measure the plan in the beginning of the process

(outcomes and indicators)

• Be focused and comprehensive – get the level of detail right

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Strategic Plan 2019 - 2023

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Strategic Plan 2019-2023

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Our Goal:

• Unanimous Council approval of the 2019-2023 Strategic Plan by April 30,

2019

Our Objectives:

• Integrate the 2019-2023 Strategic Plan with the 2020-2023 Multi-Year

Budget

• Produce a document that can guide Council’s decisions and

Administration’s actions

• Support strategic decision making for the next term of Council, where

strategy drives financial and business decisions

• Comprehensive, yet focused

Timeline & Key Deliverables:

September to December 2018

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Timelines

2015-2019 Strategic Plan

Performance Report & Impact Assessment

Semi-Annual Progress Report

Report to the Community

Council Approval of 2019-23 Strategic

Plan

June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June

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18

20

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Setting Context: Develop Process, Timelines, Background Documents

Developing the Plan: Draft Strategies, Outcomes, Measures

Engaging the Community

Table 2019

Budget

MYB 2020 – 2023 Development *

2019-2023 Strategic Plan

2019 Budget Approved

* targets, priorities, pace

InauguralCouncil

Staff /Councillor-Elect

Engagement

Launch of the Strategic Plan

Set Context

Set Vision, Mission, Values

Set Strategies, Outcomes, Measures

Revisit Vision,

Endorse Plan

STRATEGIC PLAN 2019-2023 Timelines

• November 6 - 30: Councillor-Elect Engagement (what they

heard at the door)

• November 12: Strategic Plan 2019-2023 Kick Off Event

• November 15 – December 31: Strategy Development (new

strategies)

• December 3: Inaugural Council

• December 17: 2019 Budget tabled/ Introduction to Strategic

Plan 2019 - 2023

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• SPPC Meetings (January 2019):

• Council sets the vision, mission, values and strategic areas of focus

(priorities)

• Council receives draft outcomes and strategies and proposed community

engagement process to occur in February

• February 2019: Community Engagement Phase 1

• What is missing (strategies) and comments on the vision

*note: timelines to be confirmed with City Clerk

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• SPPC Meeting (March):

• Council receives results from community engagement process

• Council sets strategies

• Opportunity to discuss second community engagement process – what is

most important?

• Community Engagement Phase 2 (March):

• What is most important?

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• SPPC Meeting (March):

• Council receives results from second community engagement process

• Council finalizes strategies, outcomes, indicators, reporting and

monitoring timelines

• Council revisits and finalizes the vision

• SPPC Meetings (April):

• Council finalizes and endorses the Strategic Plan for the City of London

2019-2023

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Tools & Documents to Support the

Development of Strat Plan 2019-2023

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Tools & Resources

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Tools and resources are being put in place to support this process:

• SWOT and PEST

• Strategy clean up tool

• Strategy development checklist

• Training on strategy development, expected results, and metrics

• Engagement tool kits

• STT Liaison

• Strategic Plan Backbone Team

Seeking your Input

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Seeking your Input

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• PEST

• Priorities for the next 4 years

PEST Purpose

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• Develop an understanding of external factors that affect our

organization

• Provide items to consider during decision making and strategic

plan development

PEST Definitions

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• Political: includes government regulations and legislation

governing the City of London

• Economic: addresses the external economy including growth,

exchange, demand, inflation and interest rates, etc.

• Social: includes demographic and cultural factors such as

population, age, health, and employment trends of citizens

• Technological: factors related to technological advancements

including life cycle, automation, and impact on the City of

London

PEST Exercise

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• At your tables:

• Review the draft PEST document

• Is anything missing from your organization’s perspective?

• Using the post it notes, please add your additions to the wall

sheets

• When finished, feel free to wander the room and review what

has been added – last chance to add anything!

Priorities for the next 4 years

What do you think should be included in the next strategic

plan?

What are the top 2 to 3 priorities?

At your tables:

• Spend 5 minutes individually

• As a table share your thoughts

• Keep track

• Are there 2 to 3 key ideas?21

STT Liaison and Next Steps

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Service Area STT Members Organization

CMO Rosanna Wilcox LEDC

DCS Paul Yeoman

EES Scott Mathers

Jay Stanford

LTC, KCCA, LTVCA, UTRCA

F&CS Mark Johnson

Lori Kolodiazny

Covent Garden Market, London

Hydro, London Convention

Centre

HR&CS Gary Bridge London Police Services

HSSDH Kevin Dickins

Dave Purdy

Jill Tansley

London Middlesex Housing

Corporation, HDC

L&CS Michael Schultness

Cathy Saunders (back up)

NCFS Kristen Pawelec MLHU

London Public Library

P&R Scott Oldham Tourism London, Western Fair,

Eldon House, Museum London

Planning Gregg Barrett

Britt O’Hagan

Jerzy Smolarek (back up)

BIA’s

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Next Steps

• We will pull together and share back:

• PEST

• Themes from today

• Connection with your STT Liason

• Tools and Resources

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Questions?

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THANK YOU!

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Expanding Community Partnerships

Staff Presentation: Supervised Consumption Site

241 Simcoe Street, London

Presented by: Sylvia Patterson, Consultant

Date: November 22, 2018

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Current State

April 2018

• LMHC Board endorsed the development of a partnership with Middlesex London Health Unit(MLHU) and Regional HIV/AIDS Connection (RHAC) to establish a permanent Supervised Consumption Site at 241 Simcoe Street.

• City of London endorsed the proposal and has begun the process to ensure that municipal policy provides for the permitted use.

October 2018

• LMHC Board Received Progress Update on this project as well as an overview of the Business Case development for submission to the City of London as both Service Manager and Shareholder.

November 2018

• LMHC has secured Federal government approval for the Supervised Consumption Facility application. Project is pending municipal zoning approvals, and final approval of MOHLTC funding.

241 Simcoe Street

Supervised Consumption Site

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Future State:

Target – Supervised Consumption Site Open Fall 2019

Business Plan Supports:

• Collaborative partnership based on strong experienced partners to deliver services to both our residents and the community

• Agreement Framework to document roles and responsibilities of the partners

• Comprehensive Strategy for Tenant and Community Engagement

• Effective Risk Management both in implementation and ongoing management of the site.

241 Simcoe Street


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Opportunities & Considerations

Meeting a Critical Community Need Delivers on Strategic Plan Objectives

• Addressing a critical community need providing a catalyst for positive community engagement and the development of new partnerships that build toward meeting the needs of a both a complex social housing community, and the broader London community.

• Partnership with strong experienced community partners builds new organizational capacity to expand partnerships to create sustainability for both the organization and our residents.

Service Manager/Shareholder Considerations

• Creates an imperative for review of restrictive program policies around tenant services and mobility, while supporting the need for modernization of the Shareholder Direction.

241 Simcoe Street


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Recommendation:

• That the Business Case attached be submitted to the City of London in their role as Service Manager and Shareholder.

• That Staff be authorized to take all necessary steps to action the implementation of this plan as outlined in the Business Case to meet the shared goal of opening a Supervised Consumption Site at 241 Simcoe Street by the fall 0f 2019.

• That staff be directed to work with the Service Manager to move forward on the proposed policy/governance changes to support a new range of community partnerships and activities in accordance with the LMHC Strategic Plan.

241 Simcoe Street


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Critical Path 241 Simcoe Street


Action Completion Target Lead

Tenant and Community Engagement

Ongoing LMHC

MOHLTC Funding Approval Fall 2019 MLHU

Municipal Zoning Fall 2019 MLHU

Agreements Early 2019 MLHU/LMHC/RHAC

Amendments LHHC Corporate Framework

2019 City of London/LMHC

Tenant Relocation Spring 2019 LMHC

Building Permit/Construction

Spring 2019 LMHC/RHAC

Occupancy Fall 2019 LMHC/RHAC/MLHU

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Business Case |London Middlesex Housing Corporation Supervised Consumption Facility Partnership

1

Expanding Community Partnerships

Business Case Hosting a Supervised Consumption Site at

241 Simcoe Street, London

November 2018

For information, please contact:

London and Middlesex Housing Corporation 1299 Oxford Street

Unit 5C5 London, Ontario

N5Y 4W5

LMHC Supervised Consumption Facility Partnership| Business Case

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Contents

Introduction ......................................................................................... 4

A Unique Opportunity ..................................................................... 6

The Need ...................................................................................... 6

The Benefits .................................................................................. 6

Supporting City of London Strategic Objectives .................................. 8

Project Funded by MOHLTC ............................................................. 9

Working Together Creates Efficiencies .............................................. 9

Getting Ready .................................................................................... 10

The Partnership Arrangement ............................................................... 10

Agreements ................................................................................. 10

The Space ................................................................................... 11

Planning for Resident Relocation .................................................... 11

Tenant and Community Engagement ..................................................... 12

Supporting an Open and Transparent Dialogue ................................ 12

Active Tenant Advisory Committee ................................................. 12

Community Engagement ............................................................... 12

Operational Capacity to Manage Change ................................................ 13

Measuring Outcomes ........................................................................... 14

Risk Management ................................................................................ 14

Opening Fall 2019 - Activities ............................................................... 16

Conclusion ......................................................................................... 16

References ......................................................................................... 18

Appendix A - Letter of Understanding .................................................... 19

Appendix B - MOHLTC Funded Budget Summary ..................................... 21

Appendix C - Floor Plan ........................................................................ 22


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Appendix D – Tenant Relocation Plan Overview ....................................... 23

Appendix E - Tenant Engagement Plan in Progress .................................. 24

Appendix F - NHS Research and Planning Fund Application ....................... 30


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Introduction As the largest provider of affordable housing in London and Region, the London Middlesex Housing Corporation (LMHC) strives to serve its communities as both a social housing provider and a host for a variety of social services and supports. In May 2017, LMHC delivered a new Strategic Plan committing to redefine our role by broadening and renewing our commitment to the residents and community we serve as a more active leader and catalyst for expanded services in our communities, adopting a new framework to guide our actions - We CARE.

One of our first actions has been to strengthen our Tenant and Community Engagement work, ensuring that our plan is tenant focused and responsive to the most critical needs in the community. This early work has identified the opportunity and the need to consider how to transform policy and services to improve housing stability for vulnerable tenants and increase the sustainability of those services. This requires intentional shift toward providing additional supports within communities and tracking and evaluating the outcomes of those supports for both our residents and the broader community.

LMHC has identified 241 Simcoe Street in London as site with complex needs and has begun an expanded community engagement process to develop strategies and partnerships to expand support services in this community. It is hoped that 241 Simcoe can be serve as a pilot site for the implementation of a range of integrated program partnerships, and modernized program delivery models that support community stabilization and successful tenancies.

This Business Case outlines a new partnership with the Middlesex London Health Unit (MLHU) and Regional HIV/AIDS Connection (RHAC) that begins to deliver on our vision through the establishment of a Supervised Consumption Facility (SCF) at 241 Simcoe Street. This is the first in a series of responses to community needs and supports the development of a more comprehensive plan for this community.

This Business Case also supports a request to the City of London as London Middlesex Housing Corporation’s(LMHC) Service Manager and Shareholder to make some adjustments to our governing documents to support the implementation of both this proposal and broader community initiatives as follows:

1. Consider amending the mandate assigned to 241 Simcoe Street under the terms of the Housing Services Act to formally recognize it as a “supportive housing” site, this will


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allow for greater flexibility to manage this very complex community, and may serve as a pilot for other LMHC community regeneration activities.

2. Support LMHC’s decision to take 5 to 7 units of housing out of service at the 241 Simcoe Street site to support this initiative and provide the flexibility to adjust services in the building going forward.

3. Consider establishing a more flexible approach to allow LMHC to move units in and out of service across the portfolio in order to respond to community need and to support community partnerships that address social and community regeneration, within an agreed upon range of units in service.

Continuing to focus on our core business of providing excellent property management services, while redefining our role, means entering into new partnerships and realigning our resources to bring new models of service delivery to an increasingly complex community. This business case supports LMHC’s overall Strategic Plan objectives, providing an example of new models of service delivery strengthening our partnership with our tenants, and our communities.


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Executive Summary A Unique Opportunity A unique opportunity exists for partnership and community stabilization through the establishment of an SCF at 241 Simcoe Street in London through the development of a deeper partnership between the Middlesex London Health Unit (MLHU), Regional HIV/AIDS Connection (RHAC) and the London Middlesex Housing Corporation (LMHC). Creating new partnerships that both serve our residents and the community around us is a focus of the LMHC Strategic Plan. This initiative will serve as a catalyst for positive community engagement while supporting the development of additional partnerships to broaden service delivery within a priority community while addressing a critical community and public health need.

Letter of Understanding amongst the partners is attached as Appendix A.

The Need Like many communities, London is searching for a permanent site to establish a Supervised Consumption Facility (SCF) in response to the acknowledged opioid crisis. The case for SCF’s is well documented in the referenced Middlesex London Health Unit (MLHU) Business Case for Supervised Consumption as well as in the Middlesex London Community Drug and Alcohol Strategy and the Community Mental Health and Addiction Strategy. The community has developed a successful model of service delivery through a temporary service site, and is now ready to expand services to meet a critical community need.

Placing the SCF within the 241 Simcoe Street site begins to address the ancillary needs of a social housing community which has been affected by both the Opioid crisis and the complexities that arise from vulnerable tenant populations. Over 80% of new residents at Simcoe come from a transient or homelessness situation. The complexity of the resident population brings with it the need for additional supports and services that are not available through social housing programs. LMHC has identified this building as a priority for new solutions to bring services to residents in new ways.

The Benefits The benefits of supporting an SCF in the community are well established and supported by research literature, the opportunity to site an SCF in an existing social housing community


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provides additional benefits and support to LMHC’s strategic vision. The opportunity to work with an experienced partner, RHAC who have successfully managed a similar facility within a residential community in the City of London creates a strong base from which to grow a successful partnership.

Benefits include:

• Supporting the public health system in responding to the opioid crisis, preventing overdose deaths both among our residents and in the community while improving services to building residents.

Research conducted both in Canada and Australia demonstrates multiple benefits that result from the implementation of supervised consumption facilities, including:

o Overdose deaths averted (Milloy, Kerr, Tyndall, Montaner and Wood, 2008) o Increased use of detox programs and addiction treatment (Tyndall et al., 2006;

Wood, Tyndall, Zhang, Montaner & Kerr 2007); o Reduction in syringe sharing and rushed injections (Stolz et al., 2007) o No negative changes in community drug use patterns, including injection drug

use (Kerr Small, Moore, & Wood, 2007; Kerr et al., 2006;Kerry, Tyndall, et al., 2007);

o Reduction in public disorder (Wood et al., 2004); o Increases in safer injection behaviours (Small, Wood, Lloyd-Smith, Tyndall, & Kerr,

2008; Stoltz et al., 2007: and o No increase in drug-related crime (Myer & Belisle, 2018).

Excerpt from Middlesex London Health Unit - The Business Case for Supervised Consumption in London, Ontario

• Creating an opportunity to demonstrate how a social housing building can better meet the needs of residents with complex needs, through resident empowerment, research initiatives and a direct opportunity to proactively move negative community traffic to support and intervention.

• Already existing partnerships are better served through this service offering at Simcoe, providing a base for more intentional planning and location of services such as ASH housing and additional Housing first initiatives.

• Expanding services on the site provides for more staffing on the site, and improved security supports that are not available through the social housing program. It is well documented that in any community these impacts will support positive community interaction and a reduction in negative activities.

• Incorporating supports and services into this community will support better outcomes for individual residents through the planned incorporation of tenant stabilization initiatives, strengthened eviction diversion strategies building toward the full implementation of the LMHC Strategic plan.


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Supporting City of London Strategic Objectives

The City of London Strategic Plan 2015-2019 (see References), outlined a bold vision for the community, and has built a number of strategies collaboratively with the community. This proposal is a compelling example of an opportunity to respond to the objectives within the pillar of Strengthening Our Community.

Vibrant, connected and engaged neighborhoods Diverse, inclusive and welcoming community Caring and compassionate services Healthy, safe and accessible city.

Service Manager Considerations In the City’s role as the Housing Service Manager, the City must consider its legislated responsibility for housing program delivery, compliance and reporting. This business case speaks to the full range of those matters, ensuring that the partners have acknowledged any potential issues, and have developed appropriate strategies to manage any considerations.

Specific to the establishment of an SCF within an existing social housing community, Service Manager considerations would include but not be limited to, the delivery of services, reduction of housing stock, risk mitigation, impact to clients and the neighbourhood as well as ensuring a policy framework to support system change (access to services), that may require some adjustments to mandate and current program rules.

Specifically as noted in the Introduction, LMHC would ask the City to consider adjusting the prescribed mandate of 241 Simcoe Street under the Housing Services Act to “supportive housing” in order to provide greater flexibility to meet the needs of residents, through amended access policy, site specific eviction prevention programming and the flexibility to create a new range of partnerships to respond to community need. Additionally LMHC would ask for support to remove 5 to 7 units of housing from stock to be repurposed as community agency or programming space as proposed in this business case, with some additional flexibility for future programming or partnership capacity. At the same time, it may be an opportunity to develop an agreement that would allow LMHC some new ability to maintain an agreed upon number of range of units as out of stock, for programming purposes across its portfolio to support regeneration initiatives and community needs.

More broadly, the City is also the Service Manager for other social services including homelessness prevention. In the shared goal of community renewal, this role is also important to LMHC as we seek to collaborate in new and different ways to bring services and supports to


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our tenants and the wider community. New or regenerated social housing can become a host for a new range of commercial or community activities, providing a foundation for more resilient communities with stronger and more diverse employment opportunities. LMHC is committed to strengthening ongoing collaboration with the Service Manager to expand and position services to achieve shared objectives.

Shareholder Considerations The City of London also has a key role as the sole shareholder of LMHC, to ensure that operations are consistent with the Shareholders direction and governance frameworks. The City has acknowledged that as LMHC modernizes its organization, there is a growing need for renewal of the Shareholders Direction to support that work and provide greater flexibility to LMHC to respond to community needs.

Project Funded by MOHLTC Annual operating costs are estimated at approximately $1.2 million. These are anticipated to be funded through the Ministry of Health and Long Term Care (MOHLTC), which is the largest beneficiary of cost savings associated with prevented illness achieved through the success of SCF’s. An application for permanent funding is currently under consideration by the province.

A copy of that budget request is attached as Appendix B.

Capital Funding for necessary leasehold improvements will be provided through MOHLTC as well. LMHC will be acting as project manager for leasehold improvements providing the opportunity to ensure that required renovations are consistent with LHMC standards, and serve to advance the long term functional requirements of the building.

Working Together Creates Efficiencies While, no direct financial impact to the housing budget is anticipated from the implementation of this project, it is clear that in executing on LMHC’s strategic vision, both realignment of funding and new objections will require new funding solutions in the long term. This project offers the opportunity to bring additional services to the site at no cost to the housing budget, providing the potential to create modest efficiencies in the provision of some services such as building security, building maintenance costs and potentially reduced unit turnover rates as tenants stabilize. LMHC is currently reviewing all of its funding requirements and opportunities which will inform the multiyear budget cycle and long term fiscal planning.


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Getting Ready Since spring 2018, a cross organizational working group has been meeting monthly to lay the groundwork for this initiative. Staff from the LMHC, RHAC and MLHU, have committed to working collaboratively to ensure that the SCF can be integrated into the 241 Simcoe Street community effectively, both within the building and in the community. Necessary organizational steps have been taken to put in place the required authorities and support to allow implementation to proceed.

On April 19, 2018, the LMHC Board of Directors formally endorsed establishing a permanent SCF at 241 Simcoe Street by passing the following resolution:

“With regard to the establishment of a permanent Supervised Consumption Site in partnership with Middlesex London Health Unit, S. Campbell moved, S. Quigley seconded that the Board ENDORSE the use of a 241 Simcoe Street for the purposes of establishing a permanent Supervised Consumption Site in partnership with the Middlesex London Health Unit (MLHU) and Regional HIV/AIDS Connection (RHAC).” MLHU has been leading the work to ensure that the site can meet any municipal zoning or bylaw requirements with the assistance of qualified planning consultants. At the April 30th, 2018 meeting of the Planning and Environment Committee (PEC), the City of London formally endorsed the provision of supervised consumption services at 241 Simcoe St. This was subject to the properties meeting the criteria for the location of supervised consumption facility in accordance with Council policy PEC also directed Civic Administration to consult with LMHC to work on any required changes to the Articles of Incorporation and Shareholder Declaration. The City is continuing to work toward final approval of council policy, and it is anticipated that completion of that work will provide the framework for this project to move ahead to meet a goal of opening in the fall of 2019.

The Partnership Arrangement Agreements Establishing an SCF at 241 Simcoe Street is part of a larger initiative led by the MLHU, to deliver services through their existing program delivery relationship with Regional HIV/AIDS Connection (RHAC). It is proposed that this arrangement will be documented through a Collaborative Memorandum of Understanding (MOU) between the three organizations, which


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sets out the roles and responsibilities of each party, a commitment to ongoing collaboration and a communications protocol. The MOU will acknowledge the requirement for program funding agreements as required by the funding bodies, as well as the need for a commercial lease between RHAC as the operator/occupier of the space and LMHC. The lease agreement will account for the shared costs of operational support to ensure the success of the project including security, building maintenance and exit protocols as required.

The Space RHAC will occupy approximately 2500 square feet of space on the ground floor of 241 Simcoe Street which is currently in use as five housing units. Plans include the provision of dedicated access to this space for clients, as well as upgraded security, appropriate spaces for clients and staff as required by the service provider to successfully deliver the program.

Floor plans for the new space are attached as Appendix C.

Planning for Resident Relocation Plans are in place to relocate any residents displaced by this initiative within the LMHC portfolio, ensuring that all necessary supports are in place. At this time, units are being held as they become vacant in order to ease transition, and it is anticipated that only one or two individuals will require relocation support. In the long term, LMHC is working toward permanently replacing the lost units as part of a developing regeneration strategy for its housing portfolio.

Through tenant consultations, the need to develop a transparent and clearly articulated transfer protocol for tenants who do not want to continue to live at 241 Simcoe based on the temptation or triggering impacts of the SCF has been identified as a key priority in implementing a full suite of supports for tenants through this service implementation. LMHC has begun drafting a Simcoe specific protocol for this purpose and will ensure appropriate mechanisms are in place well before the opening of the SCF. It is anticipated that migration may go both ways from other buildings into Simcoe for the additional supports, therefore assessments and strategies for that eventuality are also under development. Service Manager support for a policy change will be important to the success of this work.

Tenant Location Plan Overview is attached as Appendix D.


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Tenant and Community Engagement Supporting an Open and Transparent Dialogue LMHC has been working with MLHU and RHAC to support their application to Health Canada and Ministry of Health. In doing so, we have engaged both our tenants and the public in extensive community consultations. We fully recognize and do not in any way minimize the concerns brought forward about administrative fairness, inadequate notice/public consultation, land use planning, broader community impact, and proper identification of service areas, policy/legislative/regulatory non-compliance, and the rights of tenants. We recognize that it is important to work with our partners, experts in the field, the community, our staff and most importantly our tenants to develop a comprehensive business plan to ensure that we do this right.

Active Tenant Advisory Committee LMHC is committed to an open and transparent engagement process and will ensure our tenants and community members have a seat at the table, both in the design-build phase of the SCF and the overall operation and logistics.

An active Tenant Advisory Committee has been established and is working collaboratively to address concerns and build understanding. Tenants have begun to embrace the SCF as a catalyst to the introduction of new supports and programs in their community.

Tenant Engagement Plan in Progress Presentation is attached as Appendix E.

Community Engagement Community dialogue has been critical to this process, and the partners are committed to continued engagement. Careful consideration of community concerns has informed our approach and will inform ongoing review and adjustment of services as we go forward.

MLHU, RHAC and LMHC will be taking several steps to ensure that the proposal will not only save and improve lives, but also contribute positively to the neighbourhood, including:

• Hiring a professional security guard focused on the perimeter of the site (and walking around neighbouring businesses/residential buildings if desired).

• Ensuring that client access and egress is controlled in such a way as to avoid impacting neighbours (e.g. fencing).

• Conducting a “Crime Prevention through Environmental Design (CPTED) review in partnership with London Police Services combined with Community Safety Planning as is required within the approval process.


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• LMHC and its partners are building additional partnerships to enhance Wrap Around supports for our shared clients at 241 Simcoe Street to respond to needs such as Mental Health, Addictions and Supportive Housing.

• Ensuring ample lighting. • Investing in extensive renovations so that there is an ample waiting room, and

“aftercare room” where clients can stay after they have used drugs so that they are not immediately returned to the public environment.

• Adding security cameras. • Equipping staff with 2-way radios. • Conducting frequent needle sweeps of the neighbourhood. • Formally assessing whether there is any impact on crime in partnership with the London

Police Service. • Working closely with London Police Services Media Office, other partners, and

interested neighbours to ensure any issues that arise are quickly communicated and addressed.

• Requiring clients to sign an agreement to respect a code of conduct. • Meeting monthly in advance of the service being launched to look at neighbourhood

safety planning, and at regular intervals on an ongoing basis to ensure that any issues that arise are dealt with as quickly as possible.

• Meeting with Neighbourhood association as available /interested to serve entire community

• Meeting with local businesses/ social service agencies that are at the borders of 241 Simcoe to address concerns and co-create supportive interventions for any challenges that arise.

Operational Capacity to Manage Change This project is a significant initiative for LMHC as we move toward a new strategic vision, it is represents the next chapter of tenant and community services. Prioritizing regeneration by community development confirms that there will be no development of programs for tenants without their involvement in that planning. This project allows LMHC to action the strategic plan in the short term, while clearly putting people’s lives first and giving the appropriate time and development of tools to support expanded regeneration activities in due course.

Change management has been a key focus for the organization as we strive to operationalize a new way of doing business. That work has included a range of activities such as:

Redirecting resources to increase investment in community development, strengthening tenant and community engagement.

Pursuing shared learning both with our London partners and other communities.


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Internal Education to support our current staff team, while renewing our hiring processes to ensure that new staff can embrace and support the vision.

Building capacity to identify and access services to support vulnerable populations in social housing and creating new service pathways

Getting involved at the community level - sending a strong signal that we are a go to community partner

Measuring Outcomes As noted throughout this plan, it is anticipated that there a variety of benefits will emerge from the careful implementation of this initiative. When a community and its residents have the opportunity to receive the supports needed to successfully stabilize life circumstances, it is typical to that factors such as anti-social behaviour, unit turnover and vandalism stabilize as well, offering both a healthier environment for residents and reduced costs to landlords. LMHC will be carefully monitoring and reporting on these factors, as well as seeking baseline data on other indicators from our partners such as Paramedic call data, and Emergency room visits.

At the same time, LMHC continues to seek a range of new partners to inform and support research, and learning for ourselves and the community. Currently LMHC in partnership with Western University has made an application to the National Housing Strategy Research Funding and Planning Initiative to support an extensive project supporting housing stability for those in the greatest need looking at potential programs, interventions and outcomes specifically at 241 Simcoe Street.

Copy of Funding Application is attached as Appendix F.

Risk Management The partners have completed a careful risk assessment of this project considering a broad range of potential considerations and mitigation should issues arise. Additionally LMHC has initiated the process to complete an Enterprise Risk Assessment process, undergoing a third party review of all potential Risks across the organization and creating appropriate tracking and mitigation measures.


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Potential risks for this project are articulated in the chart below: Risk Profile

Consideration Potential for Risk Mitigation Approach

Change in Provincial Policy/Funding Direction

Strong agreement that a SCF and similar services are required in the community. Partners strongly committed to finding a pathway to success.

Province may reshape program expectations, partners are ready to respond as required to ensure that community needs are met.

Risk of Success Program need growing faster than program can absorb. Could lead to issues on the site, or in the community.

Close monitoring and commitment to ongoing dialogue between the partners. Program growth may require additional funding or other resources.

Tenant and Community Acceptance

Incidents could occur which may erode community support.

Close monitoring and commitment to ongoing review by the partners.

Clear expectations will be in place for behaviour on the site by both RHAC and LMHC. Those will be strictly enforced.

Inadequate support for tenants/ partnership Dissatisfaction

Many of the supports proposed through this project are indicated through partnerships. If service agreements or breakdown in relationship between service providers occur, this strategy for support could fray.

MOU’s, coordination of services through LMHC Community Development Team, on location commitment to communication plan and collaborative meetings as needed to address building needs.

Media/ Interest group dissemination of mis-information/ negative publicity

Some community members are fundamentally against the services proposed and will not be satisfied by evidence or outcomes. Media may also report mis-information attributing negative activities in the neighbourhood to the site location regardless of facts.

Clear communication strategy, collective messaging and commitment to directing questions, concerns to Core partners. Evidence and Facts will be monitored and shared to deliver transparent metrics on services and outcomes.


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Opening Fall 2019 - Activities A number of concurrent activities are supporting a goal of opening an SCF at 241 Simcoe Street in the Fall of 2019. While some of these dates may be adjusted as the project moves forward, the critical path is as follows:

Key Activities

Action Completion Goal Lead

MOHLTC Program Approval Early 2019 MOHLTC

MLHU/RHAC

Municipal Zoning Approvals Fall 2019 MLHU

Program Agreements Ongoing MLHU/RHAC

Amendments to LMHC Shareholder Direction/Corporate Framework

Early 2019 City of London

LMHC

Commercial Lease/Agreement for Leasehold Improvements

December 2018 RHAC/LMHC

Building Permit Spring 2019 LMHC

Tenant Relocation Spring 2019 LMHC

Construction Contract in Place

Spring 2019 LMHC/RHAC

Occupancy Fall 2019 LMHC/RHAC/MLHU

Conclusion This business case sets out the framework for a new form of community partnership, building on LMHC’s history of commitment to both excellence in its role of Landlord and in connecting our residents to services in a an effective way. Our work has been collaborative both with our public health colleagues, but also with an expanded range of community partners and most importantly with the residents we serve. It speaks clearly to the Agenda for Change laid out in


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the Community Mental Health and Addiction Strategy for London, working to “continuously enhance our local system through effective relationships and a focus on prevention, treatment, quality and integration” with a focus on capacity building, access and collaboration.

Our plan delivers on objectives set out in the City of London Strategic plan to Strengthen our Communities both in supporting a compassionate and evidence based response to the Opioid Crisis, and in supporting a community with complex needs to begin to develop new opportunities for social regeneration.

Increasingly community and resident needs are changing, and the LMHC Strategic Plan begins to lay out a pathway to both respond to those needs and take on new roles in the community. It is our hope that this will be the first in a series of initiatives that contribute to greater sustainability for our residents and for our core services, while contributing to the overall financial and community health of the municipalities that support us.


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References Middlesex-London Community Drug and Alcohol Strategy: A Foundation for Action (2018).

Middlesex-London Health Unit (2018). The Business Case for Supervised Consumption in London, Ontario

London & Middlesex Housing Corporation (2017). LMHC Strategic Plan 2017-2020

London For All: A Roadmap to End Poverty (2016). Report of the Mayor’s Advisory Panel on Poverty.

Community Mental Health and Addiction Strategy for London (2017). Report of the Community Mental Health and Addictions Advisory Council.

Strategic Plan for the City of London 2015-2019 (2015)


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Appendix A - Letter of Understanding Letter of Understanding

Facilitating the Locating of a Supervised Consumption Site at 241 Simcoe Street, London

Insert Date

Partners in this Agreement

Middlesex London Health Unit

Regional HIV/AIDS Connection

London Middlesex Housing Corporation

Introduction

The partners to this project as listed above have been engaged in a process to consider together the opportunity to locate a Supervised Consumption site within an existing Social Housing property located at 241 Simcoe Street in London. The property is owned and operated by the London Middlesex Housing Corporation and provides rent geared to income to vulnerable residents. The project is moving toward implementation and it is agreed that the following represents an outline of the proposed Business Arrangement and establishes guidance for the preparation of formal agreements to facilitate the planned opening of the project in fall of 2019.

Business Arrangement

Each of the partners has a key role to play both independently and in collaboration with the partners. It is proposed that action be taken to formalize those roles in the following way:

All Partners - Collaborative Memorandum of Understanding

All of the partners agree to the development of a detailed MOU to guide the relationship going forward. The MOU will articulate the roles and responsibilities of the Steering Committee including

• A Shared commitment to collaboration managed through an ongoing cross organizational Steering Committee

• A shared communications protocol • A framework for regular evaluation and review of operational issues, needs and

outcomes on the site. • An ongoing intentional process of engagement with the residents who reside at 241

Simcoe Street as well as within the neighboring community.


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Middlesex London Health Unit - Funding, Provincial and Federal Approvals

• Lead process to secure program funding and approvals as required from Provincial and Federal ministries and agencies

• Lead process to ensure that appropriate site zoning and municipal approvals are in place, with support from LMHC as required

• Establish program agreement with delivery partner, (RHAC), and ensure appropriate program evaluation

Regional HIV/AIDS Connection - Program Delivery Agreement, Lead Operator

• As delivery partner, RHAC is the active operator providing services on the site • Responsible for managing staff and client interactions, service provision and meeting

the requirements of their funders

London Middlesex Housing Corporation - Landlord, Commercial Lease, Common Services

• Owner, landlord of the property responsible for all aspects of property management • Provides the space to RHAC under the terms of a lease, which will include common services such

as cleaning, site security etc. • Lease is anticipated to include terms for the completion of Leasehold improvements to prepare

the property as required. Leasehold improvements to be carried out under the approval of LMHC who may project manage or complete some or all of the work as agreed among the parties.

Insert Signature Blocks


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Appendix B - MOHLTC Funded Budget Summary

Ministry of Health and Long-Term CarePopulation and Public Health DivisionSupervised Injection Services Provincial Funding ProgramOperational Expense Request FormApplicant Information

Lead Organization(s): Regional HIV/AIDS Connection and Middlesesx-London Health Unit 241 Simcoe Street

Organization Head(s):n Lester and Dr. Christopher Mackie

Funding Request Details:

SIS Operating Hours Monday: Tuesday: Wednesday: Thursday: Friday: Saturday: Sunday:

9am-9pm 9am-9pm 9am-9pm 9am-9pm 9am-9pm 9am-9pm 9am-9pm

Total # of Open Hours (weekly) 84

Fiscal Year 2018

Total All Funding Requested 1,510,588.00$

Total Capital Funding Requested 317,986.00$ This includes one-time costs

Total Operational Funding Requested: 1,192,602.00$

Total Number of FTEs (all positions): 11.8

Average Number of FTE per Shift: 4.916666667

Position # of FTES Salary Benefits TotalRegistered Nurse 3.6 75000 14625 322,650$ 322,650$ 3.6 FTEs

Peers 1 41000 7995 48,995$ 48,995$ 2.4 FTEs

Harm Reduction Worker 4.8 48000 9360 275,328$ 275,328$ 4.8 FTEs

Supervisor 1 79625 15527 95,152$ 95,152$ 1 FTE

Suppoert Services1.4

41000 7995 68,593$ 68,593$

shifted some funds from peers for

support staff

Other Nurse Relief 75,000 14625 44,813$ 44,813$ 0.5 Relief @ RN salary

Other Harm Reduction Worker Relief 48000 9360 59,654$ 59,654$ 1.04 Relief @ HR Worker salary

Sub-total 11.8 Sub-total 915,185$ 915,185$ 11.8 FTEs + Relief

Please indicate: (ongoing and/or start-up funding) (permanent and/or interim)

Annualized Operating BudgetSalaries and Benefits

MOHLTC Comments


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Appendix C - Floor Plan


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Appendix D – Tenant Relocation Plan Overview

Site Development Units

•Decant through attrition•Re-locate within building stock•Absorb any costs for tenants effected •Currently only 2 units to manage as the others are empty now.

Support Program co-location

•moving ASH to Simcoe St.•Potential of opening managed alcohol program in building•Committment to provide program space through SCF or other community space at Simcoe for support uses

Re-Location protocol

•Current tenants who are triggered by SCF proximety will be encouraged to apply for re-location•Protocol will include supports and community service recomendations for re-location•If tenant qualifies under this protocol LMCH will absorb costs associated with move and will provide options within the LMCH housing portfolio


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Appendix E - Tenant Engagement Plan in Progress


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27


28


29


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Appendix F - NHS Research and Planning Fund Application

Governance Committee Meeting Page 1 of 2 Monday, November 5, 2018

GOVERNANCE COMMITTEE REPORT Monday, November 5, 2018


Election of Committee Chair

ACCEPTED the nomination and election of L. Ducharme as Acting Governance Committee Chair


There were no conflict of interests declared.

Governance Committee Meeting Minutes of September 6, 2018

APPROVED and AMENDED the Governance Committee Meeting Minutes of September 6, 2018 as follows:

i. Titles of Board Members be amended, noting A. Evans is a Board Member.

ii. Amend motion relating to Staff Report 2018-14: Conflict of Interest Policy noting that the Report was referred to the Board of Directors for approval as amended.

iii. The Committee reported progress on a Board matter pertaining to an identifiable individual that is subject to legal advice and privilege.

Staff Report 2018-28: Code of Conduct Policy

RECEIVED Staff Report 2018-28: Code of Conduct Policy for information, referring the report to the Administration for further development of the policy and related policy program.

Staff Report 2018-34: Board Assessment (report attached)

RECEIVED Staff Report 2018-34: Board Assessment, holding the recommendation in abeyance until the fourth (4th) quarter of 2019; and APPROVED not completing the Board evaluation for 2018, notwithstanding the Shareholder Declaration and Board Evaluation Policy given the current status of the Board, subject to Board approval; APPROVED holding a Board-only retreat in the first (1st) quarter of 2019 once all board positions are occupied.

L. Ducharme Acting Committee Chair A.Evans Director S. Quigley Board Chair A.Hopkins Director, City Councillor

J. Browne Chief Executive Officer L. Palmer Recording Secretary

Governance Committee Meeting Page 2 of 2 Monday, November 5, 2018

Staff Report 2018-38: Board Succession Plan (report attached)

DIRECTED the Administration to develop a framework/ guideline, for the seeking, assessment, selection and appointment of individuals to the Board of LMHC, noting the developed framework/ guidelines are subject to Board approval and the consideration of the Shareholder; and DIRECTED the Administration to consult with other Boards and Commissions with the intent to establish best practices

Governance Committee Work Plan (2018)

RECEIVED the Governance Committee Work Plan (2018) for information.

Report on In Camera Items

CONCLUDED a Board matter pertaining to personal matters about

an identifiable individual or group that is subject to legal advice and

privilege. L. Ducharme , Acting Committee Chair

LMHC Governance Committee Page 1 of 4 November 5, 2018

STAFF REPORT 2018 – 34 TO: Members of the Governance Committee for the Meeting of November 5,

2018 FROM: Josh Browne, Chief Executive Officer SUBJECT: BOARD ASSESSMENT

RECOMMENDATION: That, on the recommendation of the Chief Executive Officer, the following actions be taken with

respect to the single source acquisition of contracted services for assessing the Board of

Directors under section 3.4.2 of the Purchasing Policies and Guidelines:

a) the price submitted by Dr. Richard Leblanc to assess the Board of Directors, at a cost of

$10,000 (excluding HST) and technology fee of $3,000 (excluding HST) BE

ACCEPTED;

b) the approvals given herein BE CONDITIONAL upon the Corporation entering into a

formal contract for the work to be done relating to this project; and

c) the Chief Execution Officer BE AUTHORIZED to execute any contract or other

documents, if required, to give effect to these recommendations.

PURPOSE OF REPORT: At the September 6, 2018 Governance Committee meeting, the Committee passed the following

resolution:

With regard to the Board Assessment discussion, L. Ducharme moved, seconded by S. Quigley that the discussion BE RECEIVED, and the Administration BE DIRECTED to prepare a follow up report for presentation at a future meeting of the Governance Committee outlining the various options, approaches and cost etc. associated with completing the assessment of Board performance.

This report serves to inform the Governance Committee of the same including a

recommendation on completing the annual board assessment for 2018.

BACKGROUND: Under the current Board Evaluation Policy (see appendix 1), the Board is required to

undertake an annual evaluation of its performance and the performance of its standing

committees. In addition, Housing Division Notice (HDN) 2013-189 recommends that social

housing providers regularly undertake an evaluation process to gain input on the effectiveness

of their board meetings.


For LMHC to ensure its board of directors has the capacity and skills to provide strategic

guidance, regular board evaluation is essential. An effective board evaluation can also help the

Board meet all of its professional expectations, including maintaining a relationship with the

Shareholder and ensuring successful board compliance.

Board Evaluation

Regular board evaluations help to maintain board standards and that LMHC is capable of

ensuring long-term viability and credibility. Board evaluations can assess the Board’s collective

knowledge base, ability, and commitment to fulfilling their responsibilities. This includes a solid

understanding of Board responsibilities under all relevant legislation, the expectations of the

Shareholder/Service Manager and the environment in which LMHC functions.

Members of the Board may also be assessed on the fulfilment of their responsibilities for the

stewardship of the corporation. A thorough board evaluation will determine board effectiveness

and whether its members are acting in the best interests of the corporation and promoting the

highest standards of corporate governance.

The Assessment process

The nature of the assessment process for board of directors varies widely – LMHC should

choose the methodology that best suits their operation. Best practices for board committees

suggest that the board assessment process should have five (5) elements.

1. The participation of all individual directors to ensure a shared understanding and

acceptance of the benefits of the board evaluation.

2. Each board member should share the commitment to evaluation themselves and their

peers.

3. A well thought-out, systematic process to establish an effective board evaluation

timeline.

4. Carefully selected board evaluation instruments to ensure that resulting information is

valid, efficient and accurate.

5. A thorough follow-up to confirm that areas of concern have been addressed, and board

evaluation information has reached the right people.

For any organization, incorporating a mix of different assessment processes into board

evaluations is likely to provide a more detailed and accurate view of how well a board is

functioning.

OPTIONS: The following provides a high-level overview of three options in assessing the board.

1. Management or Outside Law Firm - Many boards default to Management or the

company’s outside law firm to administer the evaluation. These groups should be

uninvolved with the evaluation. The conflict of interest in a manager facilitating the

evaluation of his or her colleagues, including the CEO, is obvious. Management has a

vested interest in a soft or biased evaluation. The outside company law firm is also

conflicted. They work for management, not the board. The governance assurance

provider, which could be a lawyer retained directly by the board who has never done

work for management, must be free to provide advice that is adverse to that of


Management or any Director. They should have a channel of accountability directly to

the Board.

2. Board Self Evaluation - Even a self-evaluation by a board of directors, is an inherent

conflict of interest, as the board is assessing its own work. It is far less likely for an

evaluation to be anonymous and for directors and participating management in the

evaluation to have confidence that confidentiality will be maintained when management

and/or the board administer the evaluation. Without anonymity, including during

interviews, the answers are not candid (valid) and the evaluation becomes flawed.

3. Independent Governance Evaluator - Regulators are moving towards independent

governance evaluators, like auditors, to administer and advise on the evaluation. But

even an external evaluator, like an auditor, can be captured by clever management.

The client of the board evaluator is not Management, but the Chair of the Governance

Committee (or its equivalent). Management should play no part in short-listing

evaluators, negotiating conditions, or remuneration of the evaluator. Nor should a Board

Chair (or Lead Director) be administering a board evaluation. If the Board is weak, then

the problem is with the Chair. The Board Chair should be involved in debriefing of

results, but the client of the governance assurance provider is the Chair of the

Governance Committee.

RECOMMENDED OPTION: Given the inherent lack of independence and anonymity with the current process, as made evident by the previous years’ board evaluation, it is recommended that Dr. Richard Leblanc be contracted as an independent governance evaluator to review of the effectiveness of the Board of Directors. The board assessment should take place once a full board is in place and new board members have gained an understanding of the necessary knowledge, skills, and behaviors in order to become effective board members. Dr. Leblanc has previously completed two governance training sessions with the Board and as a leading expert on board governance provides a confidential, leading-edge, online board assessment tool entitled the BEAM (Board Effectiveness Assessment Methodology). The assessment includes self and peer review across fifteen (15) director competencies: knowledge of the business, judgment, resources, conscientiousness, capacity to challenge, willingness to act, conceptual thinking skills, financial acumen, decision-making skills, communication skills, teamwork skills, influence skills, integrity, independence and fiduciary duty. The assessment also includes confidential interviews, gap analysis and a written report with actionable results. FINANCIAL IMPACT: The contracted services costs of $13,000 will be accommodated in the 2019 operating budget.


CONCLUSION: Today’s boards are faced with many challenges and expectations which highlights the need for a competent, diligent and informed board. A well-conducted board appraisal will assist in benchmarking the board’s performance against established best practice. The board evaluation allows for some reflection on the role of the board, what its objectives are, and how it has fulfilled those objectives. It allows for in-depth consideration of what resources the board might need in order to achieve its goals, while providing a forum through which directors can consider the ways in which the board contributes to the overall goals and strategy of the organization. Good boards and directors are those who continually strive for improvement, and an annual board appraisal, facilitated by an independent third party, is a highly effective means to achieving this. It is of great importance that trust is established in the credibility and confidentiality of the process of board evaluations, regardless of whether it is managed by the board itself or by a third party. Trust is the best incentive to encourage candid input and feedback from board members and other stakeholders, and makes it more likely that the evaluation results will be taken seriously by the board. Dr. Leblanc’s extensive experience in the design and implementation of 3rd party board self-assessments will help LMHC improve board performance, achieve governance excellence and set the standard for future evaluations.

PREPARED and SUBMITTED BY:

JOSH BROWNE CHIEF EXECUTIVE OFFICER

Attachments:

Appendix 1 – LMHC Board Evaluation Policy (including Board Evaluation Form)

BOARD ASSESSMENT

Staff Presentation: Governance Committee

Presented by: Josh Browne, Chief Executive Officer


Current State

• Governing Documents - Board Evaluation Policy and Form; Housing Division Notice (HDN) 2013-189

• Lack of independence and anonymity

• Check box approach

• Individual Directors are not assessed

Board Assessment

Current State

• Competencies and attributes are not evaluated

• The evaluation is not holistic or 360 degrees• The evaluation does not produce actionable

results• The evaluation is not properly debriefed or

consequential• Evaluation results are not disclosed to the

shareholder

Board Assessment

Future State

1. Highest standards of corporate governance

2. Ensure long-term viability and credibility

3. More detailed and accurate view of how well a board is functioning

4. Continually strive for improvement

5. Trust is established in the credibility and confidentiality of the process of board evaluations

6. Highly qualified and engaged directors that press for transparency, accountability and leadership

Board Assessment


Different Methods:

1. Management or Outside Law Firm

2. Board Self Evaluation

3. Independent Governance Evaluator

Board Assessment


1. The participation of all individual directors to ensure a shared understanding and acceptance of the benefits of the board evaluation.

2. Each board member should share the commitment to evaluation themselves and their peers.

3. A well thought-out, systematic process to establish an effective board evaluation timeline.

4. Carefully selected board evaluation instruments to ensure that resulting information is valid, efficient and accurate.

5. A thorough follow-up to confirm that areas of concern have been addressed, and board evaluation information has reached the right people.

Board Assessment

Recommendation

• An independent governance evaluator be contracted to review of the effectiveness of the Board of Directors.

• The board assessment should take place once a full board is in place and new board members have gained an understanding of the necessary knowledge, skills, and behaviors in order to become effective board members.

Board Assessment

Questions & Discussion Board Assessment

London & Middlesex Housing Corporation BOARD EVALUATION POLICY Board Handbook

Page 1 of 4

PURPOSE This policy outlines the expectations and timelines for the evaluation of the work of the London and Middlesex Housing Corporation (LMHC) Board of Directors. OBJECTIVES The objectives of board evaluation are to allow the LMHC Board of Directors to:

• Track its own progress, results and successes in its annual governance of the organization.

• Improve its governance results and successes, year over year. • Self-correct as a board, or course-correct if the board’s work is deviating from stated

purposes, responsibilities, or objectives. • Address the performance of board standing committees, as appropriate. • Address gaps in the knowledge and understanding of the roles and responsibilities of

the board, and the governance of the organization. • Address gaps in the knowledge and understanding of the roles and responsibilities of

the Executive Director (ED) and his or her delegates (the operations team). • Address gaps in the knowledge of the management of social housing in general, and of

public housing in particular, as it pertains to the governance expectations of the Sole Shareholder.

• Give board members the opportunity to grow and develop as an effective governance body.

BACKGROUND This policy was originally created as a response to a Housing Division Notice (HDN) from the Service Manager (the City of London), which recommended that social housing providers regularly undertake an evaluation process to gain input on the effectiveness of their board meetings.1 DEFINITIONS

• “Board” means the LMHC Board of Directors. • “Board Chair” means the chairperson of the LMHC Board of Directors. • “Board meeting” means a regular or special meeting of the LMHC Board of Directors. • “Chair” means the chairperson of the LMHC Board of Directors or the chairperson of a

board standing committee. • “Committee” means a standing committee of the LMHC Board of Directors. • “Director” means a member of the LMHC Board of Directors. • “Evaluation” means a board evaluation. • “Evaluation form” means the Board Evaluation Form. • “Executive Director” means the operations delegate of the LMHC Board of Directors;

the head of the operations team.

1 HDN 2013-189, Appendix 1, Page 5

BOARD EVALUATION POLICY

Page 2 of 4

• “Form” means the Board Evaluation Form. • “Member” means a member of the LMHC Board of Directors. • “Secretary” means the Secretary of the LMHC Board of Directors (typically the Executive

Director). • “Service Manager” means the regional administrator of social housing for London and

Middlesex, as designated under the Housing Services Act, 2011. • “Sole Shareholder” means the sole shareholder of LMHC, the City of London. • “Staff” means the operational staff of LMHC. • “Standing committee” means a standing committee of the LMHC Board of Directors.

POLICY STATEMENT The LMHC Board of Directors will undertake an annual evaluation of its performance, and the performance of its standing committees. These evaluations will take place before November 30 each year, in order that the current board Chair and standing committees may receive feedback about their performance, and/or make resolutions about future board actions based on performance feedback, before the incumbents are elected in December. In years when there is a turnover of board members, a November 30 deadline for board evaluation will allow the retiring board members to receive feedback about the board’s performance, and/or make resolutions about future board actions based on performance feedback, before the incumbents join the board in December. PROCESS The process for undertaking annual board evaluation is as follows:

1. At the beginning of September each year, the Board Evaluation Form will be distributed to all board members, to be completed and returned to LMHC staff (the Secretary or his or her delegate) by the 30th of that month. The evaluation form will be distributed as an electronic document in Microsoft Word format, so that the board members may complete the evaluation form electronically, or print it out and complete it manually, as they prefer. Evaluation forms can also be distributed in other formats, upon request. Completed evaluation forms may be returned in electronic format (either as Word documents or PDFs), or paper format. The return of completed evaluation forms can be accommodated in additional formats, upon request.

2. The Secretary and his or her delegate will keep the completed evaluation forms confidential at all times, with the understanding that the forms will have the same level of confidentiality (and corresponding staff or public access) as any in camera board documents.

3. The completed and returned evaluation forms will be compiled by the Secretary or his or her delegate, so that they may be reviewed and discussed by the LMHC Board of Directors at the regular October board meeting.


Page 3 of 4

The compilation of the completed evaluation forms will be in a format that combines the responses from all individual board members into one document. The board may direct staff to either identify individual respondents, or keep responses anonymous, as it wishes. Unless directed otherwise, staff will keep responses anonymous.

4. All documents, reports and discussions about board evaluation will be received and take place in camera, out of respect and consideration for any performance issues that the board may review or take action on. If the board wishes to make a statement about the results of the board evaluation process in the public portion of a board meeting, it may do so only upon passing a board resolution releasing any confidential information during a prior in camera session where board evaluation is discussed.

5. The board will have a discussion of the completed board evaluation forms as follows:

A. The board will review the results of the most recent past evaluation and annual governance plan, if either exists, in order to be reminded of past results, action items, recommendations, resolutions or governance plans pertaining to the previous board evaluation.

B. The board will have a thorough discussion of the compiled evaluation form responses, noting areas of success, improvement over previous results, and areas where there is opportunity for improvement.

C. If the board wishes to take action on any areas covered by the evaluation, it will

note action items in the minutes, or pass resolutions about expected actions.

D. Keeping in mind that, from time to time, the board evaluation process may involve the discussion of performance gaps of the board as a whole or committees as a whole, the board will always endeavor to undertake the process of evaluation with the highest standards of respect and dignity for others, as per the Board Code of Conduct [pending].

E. At the completion of the discussion of the board evaluation, the board Chair will

ask for a resolution to direct the Human Resources and Governance Committee to prepare a governance plan for the following year. This plan will be returned to the board for discussion and approval before the end of the calendar/fiscal year, and will guide the work of the board for the following year. It may include recommendations for board or committee development, policy development, strategic planning activities, board education, or any other governance activities that will demonstrate due diligence and best practices in effective corporate governance and evaluation.

F. The board may also direct the Human Resources and Governance Committee to

review and revise the Board Evaluation Policy, the Board Evaluation Form, and/or the Board Code of Conduct [pending], based on outcomes of the board


Page 4 of 4

evaluation. This work will take place early in the following year, as part of the Human Resources and Governance Committee’s annual work plan.

G. The board may also direct any of the standing committees to review and revise

their terms of reference, based on outcomes of the board evaluation.

6. The board governance plan will guide the work of the directors and board Chair for the following year, and will serve as the target(s) for the following year’s governance performance results.

INQUIRIES For inquiries about this policy, please see the Chair of the LMHC Board of Directors. RELATED LEGISLATION

• HDN 2013-189 – Local Standard – Board Meetings • Declaration of the Sole Shareholder, 2012

RELATED DOCUMENTS

• Board Code of Conduct [pending] • Board Evaluation Form • Standing Committee terms of reference

DOCUMENT CONTROL Drafted: April 2014 Approved: July 24, 2014 Revised:

London & Middlesex Housing Corporation Assessing the Board of Director’s Governance

Board Evaluation Form

1

Please score the following statements out of 5 and provide any comments where you wish to add more detail.

Board evaluation Strongly disagree

1

Disagree

2

Neutral

3

Agree

4

Strongly agree

5

N/A

Additional comments

I understand my roles and responsibilities as an LMHC Board member.

The role of the Board and the Executive Director (ED) is defined and respected. The ED is responsible for operations and the Board is focused on policy and planning.

The Board effectively fulfils its role in annually evaluating and supporting the ED.

The Board successfully acts as governing trustees on behalf of contributors and the community while carrying out LMHC’s mission and goals.

The Board is actively engaged in strategic planning and setting the vision for the organization.

The Board actively monitors the outcomes and impact of LMHC’s programs and initiatives.

The Board reviews the organization’s bylaws and policies on a regular basis.

The Board effectively oversees LMHC’s financial resources by playing an appropriate role in financial matters.

Board members act as ambassadors for LMHC in the community.



2

Board evaluation

Strongly disagree

1

Disagree

2

Neutral

3

Agree

4

Strongly agree

5

N/A

Additional comments

The Board’s recruitment process ensures the Board is appropriately diverse and has the skills, expertise and experience to successfully govern the organization.

Board members receive information about their responsibilities as well as ongoing training to enhance their governance role.

New Board members are oriented to the organization’s mission, bylaws, policies, finances and programs, as well as their roles and responsibilities.

The Board manual is complete, useful and relevant.

The Board receives reading materials, financial reports and required documents with enough time for review before meetings.

I am satisfied with the various methods of communication used by the LMHC Board.

Board members come to meetings prepared to discuss agenda items.

Board agendas are well constructed and result in the Board achieving its meeting goals.

Board meetings are run effectively.

Board members are encouraged to speak up.

The Board actively explores different ideas and opinions among Board members.

I feel that the Board works effectively as a team.



3

Board evaluation

Strongly disagree

1

Disagree

2

Neutral

3

Agree

4

Strongly agree

5

N/A

Additional comments

Time the Board spends for decision-making is appropriate.

The Board responds proactively versus responding reactively to issues arising at LMHC.

The Board has a process for handling urgent matters between meetings.

There is a high level of trust between Board and staff.

The Board’s ongoing method of self-evaluation is useful and helps to enhance Board functioning and governance.



4

Please provide your comments to these questions

1. Briefly describe your overall satisfaction with ABC’s Board functioning and effectiveness. What steps could be taken to enhance the Board’s work, the way it works and its impact on the organization?

2. Do you feel that you are making an important contribution to ABC? If appropriate, describe how the Board and organization could support you to enhance your contribution.

3. What challenges have you experienced as an ABC Board member? Describe them and outline any steps you have undertaken to deal with them. Is there anything the Board or organization can do to address these challenges?

4. If you could change one thing on the Board, what would it be?

5. As we move forward with our new strategic plan, what do you think we should be looking for in a new chairperson of the Board of Directors? And in new directors?


STAFF REPORT 2018 – 38 TO: Members of the Governance Committee for the Meeting of November 5,

2018 FROM: Josh Browne, Chief Executive Officer SUBJECT: BOARD SUCCESSION

RECOMMENDATION: That, on the recommendation of the Chief Executive Officer, Administration BE DIRECTED to

work with other interested local boards & commissions of the City of London to develop a policy

framework for the recruitment, selection, appointment and evaluation of board members for

Shareholder consideration.

PURPOSE OF REPORT: This report serves to inform the Governance Committee on the issue of board succession,

including the legislative requirement, current framework, challenges and opportunities. The

report also provides a recommendation as a way forward to improve on the current system

recognizing and supporting the City of London as shareholder.

STRATEGIC ALIGNMENT: This report is consistent with LMHC’s new Strategic Plan with particular links to our strategic goal to “Organizational Effectiveness” by creating a governance model to best support LMHC Operations. BACKGROUND: Legislative Requirement Under section 27(2) of the Housing Services Act, 2011 and Housing Division Notice 2011-168, Housing Providers are required to have board succession plan for the purposes of subsection 69(5) of the Act. Current Framework The current framework (succession plan) is controlled by the City of London as shareholder in accordance with their internal policies and LMHC’s Shareholder Declaration.


LMHC is required to notify the City of London of any board vacancy. Vacant board positions are posted on the City of London’s website and persons interested in being considered for appointment are asked to obtain, complete and return an application form that is available on the City’s website at www.london.ca/committeeapplication or from the City Clerk’s Office, 3rd Floor, City Hall, 300 Dufferin Avenue. The City’s Strategic Priorities and Policy Committee (SPPC) address the matter of citizen appointments to represent the Municipal Council on various civic bodies and may choose to conduct interviews as part of the appointment process. This is not consistently done for every civic body or for every board vacancy. City Council does encourage applications for appointments to Civic bodies from persons from all of the communities of diverse cultural interests and backgrounds that constitute the whole of London with the aim of obtaining the broadest possible representation of multicultural interests and perspectives on such bodies. LMHC Shareholder Declaration, (Section 6.0 Shareholder Matters) 6.2 Shareholder to Appoint Directors. The Shareholder shall appoint the Board in accordance with the following: a) Eligibility for Board Membership. To be eligible as a Director, an individual must not be

statutorily disqualified from being a director under the OBCA or otherwise, and shall be a Resident Canadian, residing in or paying property taxes to the City or the County of Middlesex. In addition, members of Council and County Council who act as Directors: i. Shall have been elected to such office by qualified electors pursuant to the provisions of

the Municipal Elections Act, 1996, as amended or shall have been appointed as a member of Council pursuant to section 263 (Filling Vacancies) of the Municipal Act, 2001, as amended.

ii. Shall be approved as candidates for the Board by resolution of Council or County Council, as applicable.

iii. Qualifications of Directors. In appointing Directors to the Board, the Shareholder shall give due regard to the qualifications of Citizens with the aim of ensuring that the Board collectively represents a range of relevant expertise including with respect to:

1) Social housing; 2) Community development; 3) Business and financial management; 4) Corporate governance responsibilities; 5) Organizational development; 6) Labour relations; 7) Legal and/or legal aid experience; 8) Landlord and tenant and social services matters.

b) Composition of the Board. The Board shall be composed of seven (7) Directors appointed

by the Shareholder in accordance with the following: i. Two (2) shall be members of London City Council. ii. One (1) shall be a member of Middlesex County Council. iii. Four (4) shall be citizens-at-large.

c) Appointment Process.

i. Council Member Appointments. Council members shall be appointed to the Board through a process approved from time to time by Council for such appointments.

ii. Other Appointments. Other members of the Board who are not appointed to the Board through the appointment processes outlined in paragraph 6.2(d)(i) shall be appointed to the Board through a process approved by Council from time to time.

http://www.london.ca/committeeapplication


d) Vacancies. Subject to section 124 of the OBCA (Directors and Officers: Vacancies), if a member of the Board ceases to be a Director for any reason, the Shareholder shall fill the vacancy created thereby as soon as reasonably possible from persons eligible for appointment as a Director pursuant to subsection 6.2(a).

e) Term. The term of appointment for all Board members shall be for a term of three (3) years provided that Directors may be appointed for an additional one (1) year term in order that their tenure on the Board shall be concurrent with the term of Council. Directors, if qualified may be re-appointed to the Board

Subsequently, at the Strategic Priorities and Policy Meeting of the City of London (July 2016) resolved that: a) The composition of the Board of Directors of the Corporation be set at nine (9) members

comprised of eight (8) citizen-at-large members, one (1) of which is to be recommended by the Council of the Corporation of the County of Middlesex, and one (1) member of Municipal Council of the Corporation of the City of London; and

b) The Board be structured in four (4) classes allowing for staggered three (3) plus one (1) year terms and consisting of:

Class 1: Two (2) citizen-at-large members; Class 2: Two (2) citizen-at-large members; Class 3: Three (3) citizen-at-large members); and Class 4: One (1) Municipal Council member and one (1) County Council

The intent of the staggered terms is to ensure the stability and continuity of business and governance over LMHC. In addition, the Shareholder may make appointments or reappointments to the Board. Regarding Board Competencies On May 5, 2014 SPPC received a report from the City Manager recommending the LMHC Board composition be amended to nine members and of May 20, 2015 Council approved a recommendation that included the following:

“provide for the LMHC to advise the Municipal Council of desired competencies when seeking applicants for vacancies on the Board (Section 6.2(b)), and to have the ability to put forward the names of applicants they would like to have considered for those vacancies;”

Challenges Although the changes made in the Shareholder Declaration regarding board appointments have provided greater influence over the appointment process by communicating the skills and experience needed in a given year to meet future challenges and strengthen the LMHC Board, it does not go far enough. This only provides the board with the ability to “advise” on the qualifications and competencies of citizens in filling any vacant board positon rather than to ensure that appropriate governance processes enable having an ongoing continuously effective governing level in place. This includes providing for the successful succession of the Board. Succession planning is an ongoing process of identifying, assessing and developing people to ensure the continuity of the Board.


Succession planning for the Board includes succession and renewal for the Board as a whole and the Board’s leadership positions (i.e. Board Chair, Vice-Chair, Committee Chairs). Objectives of Board succession and renewal are:

New Board members are able to effectively succeed the Board’s departing members and can contribute to governing the organization as quickly as possible

Collectively the members of the Board have the knowledge and skills necessary to perform the governance role effectively

Effectively prepare Board members for leadership positions on the Board and prevent the risk of people dependencies at the governing level.

These objectives cannot be fully achieved within the current board appointment process. Opportunities Succession of the Board involves interdependent governing practices. The five key governance practices that have a bearing on Board renewal and succession include:

1. Competencies and Attributes 2. Nominations and Election 3. Director Orientation and Ongoing Director Development 4. Developing Board leaders 5. Board Assessment and Director Assessment

Element 1, Competencies and Attributes Competencies and Attributes involves identifying the competencies and attributes (including diversity of mindset) that the Board as a whole needs in order to provide effective service to the organization. This requires a review of the mission, vision and strategic objectives of the organization, as well as the key issues and risks that the organization will need to face over the next few years. Based on this review, the required competencies and experiences needed on the Board can be articulated. This element also includes identifying the competencies, experience and attributes that each nominee needs to bring to the boardroom. At this stage, the current Board composition is assessed against the desired Board composition and gaps identified. This assessment needs to take into consideration the skills and experiences that may be leaving the Board due to Directors who are stepping down. Element 2, Nominations and Election Nominations and Election involves calling for or recruiting nominees that meet the needed competencies, experiences and attributes. At this stage, the information and outcomes of the assessment in element 1 can be communicated to the organization’s shareholder. Organizations are taking different approaches and expressing different philosophies with respect to the means of populating the Board. Some organizations follow a process whereby any individual who is nominated as a candidate for Directorship is allowed to stand equally for election based on their personally expressed merits while other organizations follow a process whereby the Nominating Committee provides its perspective on the merits of candidates by providing its endorsements for select candidates or providing a ‘slate’. The endorsement process provides a perceived elevation of certain candidates. Some criticism has been levelled at the endorsement process for not being transparent and not conducted with integrity with respect to diversity of competencies and mindset.


It is important that any individual who is going to stand for election has the commitment and capacity to serve the organization and ability to serve in the best interests of the organization and not individuals or groups of self-interest. The results of the election and resulting composition of the Board may impact the training requirements in Element 3. Element 3, Director Orientation and Ongoing Director Development Director Orientation and Ongoing Director Development recognizes that new Directors need to be oriented to the organization in terms of its business, its strategic plan, the governance duties, governance protocols and the expectations of a Director. All Directors require ongoing education on the sector in which the organization operates, the specific priorities of the organization, stakeholder needs, and governance evolution. It is important to assemble a curriculum of learning for individual Directors as well as team learning for the Board as a whole. Using the information from element 1, some training may be specifically needed to bridge the gap of actual composition of competencies and experience from that of the ideal composition. Element 4, Developing Board Leaders Developing Board leaders is important. The Board needs to be clear on the responsibilities of the Board Chair, Vice Chair, and Committee Chairs and consider the competencies and attributes necessary in the individuals who hold these roles. The Committee Chair roles can be used as a training ground for future Board Chairs. Assigning a Director to a Committee Chair role permits them an opportunity to demonstrate their chairmanship abilities as well as their leadership style and ability to work with executive of the organization. The process of identifying persons to assume the leadership roles needs to be clearly identified with the goal of achieving specific outcomes:

Provide opportunity for the organization to benefit from experience of different Directors as leaders

Provide opportunity for Directors to experience different roles on the Board for personal development

Provide succession planning for the Board leadership role and provide opportunity for fellow Directors to observe Directors in Committee leadership roles prior to being considered for the Board leadership role.

An important component of this element is to provide for a balance of continuity and rotation of people in the leadership roles, e.g. limit the time that any director holds a leadership position to no more than three consecutive years. This allows the organization to benefit from the stability of leadership while having a pool of trained leaders and not creating people dependencies. Element 5, Board Assessment and Director Assessment The Board assessment process enables the Board to identify where its practices need improvement to achieve overall governance effectiveness. This might identify the need to modify the desired Board composition established in element 1. The individual Director assessment assists in the succession planning process. The individual Director assessment process needs to provide feedback to Directors on how effective they are in contributing to the governance of the organization. This process can identify those Directors who should be encouraged to stand for re-election and those Directors who are not contributing at the level needed. The follow up to a non-contributing Director can be an agreed action plan for the Director to improve his/her performance or to depart from the Board to allow room to bring in someone who has the ability and capacity to serve.


The following chart summarizes the key components of each of the elements.

FINANCIAL IMPACT: There is no finance impact associated with this report or the recommendation contain within. CONCLUSION: Effective succession planning for a Board requires the combined effort of five key processes. LMHC will benefit from a boardroom environment that acknowledges the need to constantly consider the requirement for change. This includes regularly reviewing the type of Board required in the particular circumstances, and evolving the desired Board composition. The information on desired competencies and attributes will better equip the governance committee and then the Shareholder in appointing the people to serve on the Board. The Directors themselves can use this information to assess their ongoing capability for the organization’s benefit. Change will also be demonstrated through the ongoing training for Directors given the evolving nature of our environment, the shareholder needs and the Director’s knowledge. Developing a pool of Board leaders for leadership succession is important. Rotating Directors through Committee Chair positions provides an opportunity to observe the ability of various Directors to assume the critically important role of Board Chair while also preventing dependency on any one individual. Board and Director assessments are an effective tool in Board and Director continuous development. This helps identify changes needed in the Board composition and knowledge base which will provide input to elements 1 and 3. Success in this area will only be achieved if the Board can have more autonomy in the recruitment and selection process for future directors.



BOARD SUCCESSION

Staff Presentation: Governance Committee

Presented by: Josh Browne, Chief Executive Officer


Current State

• Legislated by Housing Services Act and Housing Division Notice 2011-168

• Governed by Shareholder Declaration and controlled by the City of London Lack of independence and anonymity

• Online application process • Not consistent (Interview)• LMHC can only “advise”

Board Succession

Future StateSuccession of the Board involves interdependent governing practices.

The five key governance practices that have a bearing on Board renewal and succession include:

1. Competencies and Attributes

2. Nominations and Election

3. Director Orientation and Ongoing Director Development

4. Developing Board leaders

5. Board Assessment and Director Assessment

Board Succession


1. Work with other Civic Bodies to create a shared framework that provides more autonomy

Board Assessment

Recommendation

That, on the recommendation of the Chief Executive Officer, Administration BE DIRECTED to work with other interested local boards & commissions of the City of London to develop a policy framework for the recruitment, selection, appointment and evaluation of board members for Shareholder consideration

Board Succession

Questions & Discussion Board Assessment

Finance & Audit Committee Meeting Page 1 of 5 Tuesday, November 6, 2018

FINANCE COMMITTEE REPORT Tuesday, November 6, 2018



There were no conflict of interests declared.

Finance Committee Meeting Minutes of October 17, 2018

APPROVED the Finance Committee Meeting Minutes of October 17, 2018.

KPI Development Presentation, Benchmarking Framework for LMHC-

RECEIVED the KPI Development Presentation, Benchmarking Framework for LMHC- Development Update by T. Leung

Staff Report 2018-35: September 2018 Financial Summary (Operating & Capital)t (see presentation attached)

RECEIVED for information purposes the September 2018 Financial Performance Results (Operating and Capital) Summary Report including related full year projections, particulars attached, noting the current operating forecast shows a deficit of $325,581 to be covered by the City of London and capital project expenditure exceeding approved budgets by $680, 513 which will be funded from the capital program reserve and Provincial funding under the SHIP and SHAPE programs; and FORWARDED the report to the Board for consideration and review. .

Staff Report 2018-36: Provisional 2019 Capital and Operating Budget Programs(see presentation attached)

APPROVED the 2019 Provisional Operating Revenue and Expenditure Budget of $22,173,000, including $10,698,000 in City of London funding noting the provisional operating budget is subject to re-costing of revenue and expenditures, within the total approved budget based upon 2018 operating trends and approval by the Board:

FORWARDED 2019 Provisional Operating Budget to the Board of Directors for consideration and approval;

APPROVED the 2019 Provisional Capital Budget providing for 18 new capital projects totalling $2,705,000, as summarized below, with funding being provided by

L. Ducharme Committee Chair V. Blackmore Director S. Quigley Director

J. Browne Chief Executive Officer A.Mackenzie Director, Tenant Services N.Turner Director, Asset

Management J.Cuylle Manager, Finance M. Byl Manager, Capital Projects

and Construction L. Palmer Recording Secretary


the City of London (LMHC capital program reserve fund) noting the provisional capital budget will be subject to final costing and approval to reflect pre 2019 approved capital projects that are still active post December 31, 2018; and

2019 Provisional Capital Budget

SITE PROJECT BUDGET

Southdale Rd Door Replacements $425,000

39 Tecumseh Ave Fire Alarm Replacement $125,000

McNay St., Walnut St., Baseline Rd.

Generator Replacements $240,000

Various Sites Lobby Upgrades $80,000

High Rise Sites Corridor Painting $80,000

136 Albert St. Boiler Replacement $110,000

872 William St. Boiler Replacement $110,000

Various High Rise Sites

Elevator Operations $100,000

County Properties Windows and Doors $30,000

High Rise Sites Balcony Study $30,000

Various Sites Asphalt (Parking Lots and Pathways)

$50,000

872 William St. Major Elevator Upgrade $200,000

Various Sites Universal Access Upgrades $75,000

Various Sites Physical Security Upgrades $75,000

Various Sites Bathroom Rebuilds $50,000

Various Sites Unit Flooring $275,000

Various Sites Technology Contingency, $150,000

All Sites Exterior Lighting Upgrades $500,000

FORWARDED the 2019 Provisional Capital Budget to the Board of Directors for consideration and approval.

Staff Report 2018-37: SHAIP Update (see presentation attached)

APPROVED the SHAIP Funding Request for $5,469,135 applying to 29

projects as summarized below , noting the projects and funding are subject

to Provincial approval; and


SHAIP PROJECTS FOR SUBMISSION

SITE PROJECT BUDGET

580 Dundas St. Cladding $1,000,000

580 Dundas St. Solar Wall $64,844

580 Dundas St. Lighting Upgrades $50,000

580 Dundas St. MUA Replacement $125,000

30 Baseline Rd. W. MUA Air Mod- add VFD $40,000

30 Baseline Rd. W. Lounge AC Replacement $20,000

30 Baseline Rd. W. Solar Wall $203,874

30 Baseline Rd. W. Lighting Upgrades $54,000

170 Kent St. Lighting Upgrades $68,000

170 Kent St. Cladding $1,250,000

170 Kent St. Solar Wall $89,228

170 Kent St. MUA Replacement $150,000

170 Kent St. Common Area Windows $100,000

241 Simcoe St. MUA Replacement $140,000

241 Simcoe St. Lighting Upgrades $45,000

241 Simcoe St. Solar Wall $201,531

241 Simcoe St. Common Area Windows $100,000

202 McNay St. Lighting Upgrades $60,600

202 McNay St. MUA Replacement $140,000

202 McNay St. Solar Wall $140,095

202 McNay St. Common Area Windows $125,000

85 Walnut St. Lighting Upgrades $54,000

85 Walnut St. Solar Wall $107,963

85 Walnut St. Makeup Air $140,000

85 Walnut St. Common Area Windows $100,000

Walnut/ McNay/

Simcoe/ Kent

Energy Audit- Post Project $10,000


All Sites Project Management $250,000

All Sites Contingency $540,000

All Sites Architecture and design $100,000

FORWARDED the SHAIP Funding Request for $5,469,135 applying to 20

projects to the Board of Directors for consideration and approval.

Report on Tenders & Bids Awarded for Non-Prescribed Purchases Requiring Board Approval

DEFERRED the Report on Tenders & Bids Awarded for Non-Prescribed

Purchases Requiring Board Approval to the next meeting of the

Committee.

Staff Report 2018-33: 2019 Finance & Audit Committee Work Plan

RECEIVED and DEFERRED Staff Report 2018-33: 2019 Finance & Audit

Committee Work Plan to the next meeting of the Committee.

Verbal Progress Report: Development of LMHC Financial Plan

DEFERRED the verbal progress report on the Development of the LMHC

Financial Plan to the next meeting of the Committee.

Finance & Audit Committee Work Plan (2018)

RECEIVED the 2018 Finance & Audit Committee Work Plan.

Staff Report 2018-39: Southdale & Boullee Windows and Doors (see attached)

APPROVED the following contract awards, noting tenders for the projects where called and processed consistent with LMHC Purchasing Policy Guidelines with the projects being funded from the City of London –LMHC capital program reserve for:

i. Exterior window replacements at Southdale Road to Jaas Construction at a cost of $554,240.00 exclusive of HST as the low fully qualified compliant bid;

ii. Exterior door replacements at Southdale Road to Rusco Manufacturing at a cost of $392,408.50 exclusive of HST as the second low bid noting the bid provided greater value in terms of warranty coverage than the lowest bid ;

iii. Exterior window replacements at Boullee St. to Crystal Windows and Doors at a cost of $554,000.00 exclusive of HST as the low compliant bid; and

iv. Exterior door replacements at Boullee St. to Rusco Manufacturing at a cost of $320,941.00 exclusive of HST as the low compliant bid.


L. Ducharme , Committee Chair

Overview of Sept. 2018 Financial Results & Forecast

Staff Report: Sept Operating & Capital ReportPresented by: Jody Cuylle, Manager of Finance and Matt Byl, Manager

of Capital Projects & ConstructionNov 22, 2018

(000's)Total Revenue 16,131 16,015 115

ExpensesSalaries, Wages & Benefits 3,918 3,831 (87) Total Maintenace, Materials and Services

3,606 3,507 (100)

Utilities 2,982 2,901 (81) Property 4,521 4,589 68 Administration 894 938 44

Total Expenditures 15,922 15,766 (156) Extraordinary Loss 69 24 (45) Total Surplus (Deficit) 140 225 (85)

Sept 2018 YTD ResultsSept 2018 Financial ResultsNov 22, 2018

$(85)k Variance mainly due to:• Maintenance, Materials & Service – Snow

Plowing, Building General, Heating/Vent & Waste Removal offset by Community Development & Pest Control

• Salaries, Wages & Benefits – one time HR costs offset by delayed hiring

• Utilities – mainly due to water heater rentals

• Offset by Property and Admin savings –property tax & insurance refund, smart spending admin costs and cellular savings

2018 Full Year ForecastSept 2018 Financial ResultsNov 22, 2018

(000's)Total Revenue 21,507 21,441 66 21,493 14

ExpensesSalaries, Wages & Benefits 5,165 5,108 (56) 5,313 148 Maintenance, Materials and Services 5,164 4,974 (190) 5,147 (18)

Utilities 4,226 3,957 (269) 3,949 (277)Property 6,033 6,119 86 6,119 86 Administration 1,212 1,251 39 1,215 3

Total Expenditures 21,800 21,408 (392) 21,742 (58)Extraordinary Loss 33 33 0 33 0 Total Surplus (Deficit) (326) 0 (326) (281) (44)

2018 Full Year ForecastSept 2018 Financial ResultsNov 22, 2018

The $(326)k deficit is due to the following:

• Materials, Maintenance & Service – $(190)k - Snow Removal, Heating/Vent., Building General and Waste Removal offset by Pest Control, Comm. Development and Plumbing

• Utilities - $(269)k – Water Heater Rentals and increased utilities costs due to hot Sept and cold fall.• Salaries, Wages and Benefits - $(56)k – One time HR risk almost completely mitigated by hiring delays

Offset by:• Property - $86k – property tax savings and small insurance refund• Revenue - $66k – higher rental revenue• Admin - $39k – non-essential spending free and cellular savings

September YTDCapital - Summary

Sept 2018 Financial ResultsNov 22, 2018

Budget Forecast Better (Worse)City of London 4,033,502 4,013,306 20,196

Special Projects 2,885,784 3,586,492 (700,708)

Total $ 6,919,286 $ 7,599,798 $ (680,512)

Overall the City of London funded capital projects are expected to be on budget, with slight savings on the Bella Surveillance and fire panel projects partially offset by a budget overage on the LEAC Shield project and unit flooring

September YTDCapital - Summary


Budget Forecast Better (Worse)City of London 4,033,502 4,013,306 20,196

Special Projects 2,885,784 3,586,492 (700,708)

Total $ 6,919,286 $ 7,599,798 $ (680,512)

The completed SHARP project overage of $(197)k has been submitted for reimbursement through SHARP funding. The SHIP project remains open and will be finalized by Feb 2019 and the overage will be submitted for reimbursement through SHIP funding.

September YTDCapital – Reserve Balance


Budget $ 4,033,502

Spent 778,162

Remaining Spend 3,235,144 (26% committed)

Total Forecast $ 4,013,306

Remaining Reserve 4,227,715 (includes SHARP reallocation of $490k)

Remaining Spend 3,235,144

Unallocated Reserve $ 992,571

• The unallocated reserve balance will be confirmed at the completion of the SHARP and SHIP projects prior to being allocated to future projects. If the unbudgeted SHARP/SHIP project costs are not approved by the ministry the unallocated reserve will cover those costs resulting in a small reserve balance deficit of $(1.7)k

SHARP/SHIP - UpdateSept 2018 Financial ResultsNov 22, 2018

Special Project Status Update

SHARP Completed

-Projects reviewed and submitted to the Ministry by the Service Manager. Awaiting confirmation for funding reallocations

SHIP Open-Project to be finalized with Service Manager by February 2019

2019 Preliminary BudgetStaff Report: 2019 Preliminary Budget – Operating & Capital

Presented by: Jody Cuylle, Manager of Finance and Matt Byl, Manager of Capital Projects & Construction

Nov 22, 2018

2019 Preliminary Operating Budget -Overview

2019 Preliminary Budget – Operating & Capital

Nov 22, 2018

Total 2019 Operating Budget: $22,173,000Includes: City of London Subsidy: $10,698,018

City of London Subsidy:• Annual Subsidy: $10,608,940 – 4.8% increase from

2018• Cap & Trade Allocation: $89,078 – replaced by

Federal “Carbon Tax”

2019 Preliminary Operating Budget -Detail


Nov 22, 2018

(000's)2019 Budget 2018 Forecast Better (Worse)

Total Revenue 22,173 21,507 666 $171k Net Rental Revenue (1.8%) & $496k Subsidy increase

Expenses

Salaries, Wages & Benefits 4,995 5,165 170 $250k one time expense in 2018 offset by COL 1.25% and step increases

Maintenance, Materials 5,120 4,970 (150)Increase in Building General and Pest Control offset by savings in Snow Plowing

Security 48 47 (1)

Social & recreational programs 146 49 (97) Increased focus on community development

Sundry materials & services 101 99 (2)

Total Maintenance, Materials and Services

5,415 5,164 (250)

Utilities 4,329 4,226 (104) Standard rate increases

Property 6,164 6,033 (130) Standard rate increasesAdministration 1,237 1,212 (25) Increased focus on staff development and education

Total Expenditures 22,140 21,800 (340)

Extraordinary Loss 33 33 (1)Total Surplus (Deficit) (0) (326) 326

2019 Preliminary Capital Budget – Summary


Nov 22, 2018

LMHC listened to the concerns of the people living within our communities which helped drive some of the capital projects in 2019.

2019 Budget is focused on:• Risk mitigation (generators/fire panels)• Reducing backlog of capital repairs• Maximizing energy savings• Physical security updates• Significant elevator improvements• High-rise lobby updates

The goal of the 2019 plan is to create safer and well maintained sites that people in our communities are proud to call home

2019 Preliminary Capital Budget – Summary


Nov 22, 2018

LMHC SHAIP Project Submission

Presented by: Matt Byl, Manager of Capital Projects & ConstructionNov 22, 2018

Proposed SHAIP ProjectsLMHC SHAIP Project SubmissionNov 22, 2018

Project # of Sites Budget

GHG Reduction (tons/year)

Utility Savings ($/year)

Cladding 2 2,250,000 87 31,096 Solar Wall 6 807,535 477 73,332 MUA Replacement 4 555,000 203 47,363 Contingency 1 540,000 ‐ ‐Common Area Windows 4 425,000 ‐ ‐Lighting Upgrades 6 331,600 66 31,499 Project Management 1 250,000 ‐ ‐Makeup Air 1 140,000 107 18,641 Architecture and design 1 100,000 ‐ ‐Makeup Air Mod ‐ add VFD 1 40,000 ‐ ‐Lounge Air Conditioner Replacement 1 20,000 ‐ ‐Energy Audit ‐ Post Project 1 10,000 ‐ ‐Total 29 5,469,135 940 201,931

SHAIP Contingency ProjectsLMHC SHAIP Project SubmissionNov 22, 2018

Site Project BudgetWalnut Cladding 1,250,000 Simcoe Cladding (lower 6 floors) 400,000 All Sites Demtroys 300,000 Dundas Elevator drive upgrade 250,000 Simcoe Elevator drive upgrade 200,000 Walnut Storm Door Replacements 140,000 All Sites Re‐caulking windows/doors 60,000 All Sites LEAC Shield 54,000 TOTAL 2,654,000

Approval requested for backup project that can be actioned quickly if any of the proposed projects are under budget or if additional funding is obtained.

Southdale & BoulleeWindow & Door Tender ResultsPresented by: Matt Byl, Manager of Capital Projects & Construction

Nov 22, 2018

Tender ResultsSouthdale and Boullee – Window and Door Tender Results

Nov 22, 2018

• Exterior window replacements at Southdale Road to Jass Construction at a cost of $554,240.00 exclusive of HST as the low fully qualified compliant bid;

• Exterior door replacements at Southdale Road to Rusco Manufacturing at a cost of $392,408.50 exclusive of HST as the second low bid noting greater value in the warranty coverage;

• Exterior window replacements at Boullee St. to Crystal Windows and Doors at a cost of $554,000.00 exclusive of HST as the low compliant bid; and

• Exterior door replacements at Boullee St. to Rusco Manufacturing at a cost of $320,941.00 exclusive of HST as the low compliant bid.

ENTERPRISE RISK MANAGEMENT FRAMEWORK

Staff Presentation: Board of DirectorsPresented by: Josh Browne, Chief Executive Officer


Current State

• Risks are identified but not strategically or systemically managed

• No Risk Policy, Risk Profile, Risk Appetite Statement or alignment with new Strategic Plan

• Lack Risk Management Plans (RMPs) and assurance

• No IT system to manage, control or monitor RMPs

Risk Management

Future State1. Improve LMHC’s capacity to manage risk and maximize

opportunities2. ERM process phased into strategic and business planning

activities 3. Creation of a more risk focused culture for the organization4. Standardized risk reporting5. Improved focus and perspective on risk6. Efficient use of resources7. Effective coordination of regulatory and compliance matters8. Better cost management and risk visibility related to

operational issues

ERM Framework

Presenter

Presentation Notes

Five Benefits of Enterprise Risk Management Jim Kreiser 8/29/2013 As business risks continue to increase, organizations are finding it necessary to implement some sort of formal risk management system. An effective enterprise risk management (ERM) program can help organizations manage their risks and maximize opportunities. Organizations in all types of industries, public and private, have observed a variety of benefits from enhancing their risk management programs. What is ERM? A committee of five organizations dedicated to thought leadership around risk management provided a definition of ERM in 2004. The Committee of Sponsoring Organizations (COSO) defined it as: "… a process, effected by the entity’s board of directors, management, and other personnel, applied in strategy-setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within the risk appetite, to provide reasonable assurance regarding the achievement of objectives."In simple terms, ERM is a way to effectively manage risk across the organization through the use of a common risk management framework. This framework can vary widely among organizations but typically involves people, rules, and tools. This means individuals with defined responsibilities use established, repeatable processes (rules), and the appropriate level of technology (tools) to mitigate risk. Many organizations struggle with implementing ERM and identifying how, and at what level, to integrate it into their organization. Managers often say they are already aware of the risks for their respective areas of the business. In these situations, what value does ERM provide, and how does it enable better perspectives and management of risks and risk data? Organizations often find that ERM programs provide a combination of both qualitative and quantitative benefits. While there are many benefits to ERM, let's focus on five of them. Benefit one: creation of a more risk focused culture for the organization Organizations that have implemented ERM note that increasing the focus on risk at the senior levels results in more discussion of risk at all levels. The resulting cultural shift allows risk to be considered more openly and breaks down silos with respect to how risk is managed. Subscribe to our communications to get business tips delivered straight to your Inbox. As risk discussions develop into a standard part of the overall strategic business processes, operational units often find that addressing risk in a more formal way helps manage their part of the organization as well. Communication and discussion of risk is recognized as not only a process to provide information to senior management, but a way to share risk information within and across operations of the company, and allow better insights and decision making concerning risk at all levels. Benefit two: standardized risk reporting ERM supports better structure, reporting, and analysis of risks. Standardized reports that track enterprise risks can improve the focus of directors and executives by providing data that enables better risk mitigation decisions. The variety of data (status of key risk indicators, mitigation strategies, new and emerging risks, etc.) helps leadership understand the most important risk areas. These reports can also help leaders develop a better understanding of risk appetite, risk thresholds, and risk tolerances. One of the major values of ERM risk reporting is improved, timeliness, conciseness, and flexibility of the risk data. This provides the data needed for improved decision making capabilities within the executive and director levels, and in other layers of management. ERM helps management recognize and unlock synergies by aggregating and sharing all corporate risk data and factors, and evaluating them in a consolidated format. Benefit three: improved focus and perspective on risk ERM develops leading indicators to help detect a potential risk event and provide an early warning. Key metrics and measurements of risk further improve the value of reporting and analysis and provide the ability to track potential changes in risk vulnerabilities or likelihood, potentially alerting organizations to changes in their risk profile. ERM also permits a more complete viewpoint on risk. Traditional risk practices focus on mitigation, acceptance, or avoidance. However, effective ERM processes gives management a framework to evaluate risk as an opportunity to increase competitive positions and exploit certain market and operational conditions. Benefit four: efficient use of resources In organizations without ERM, many individuals may be involved with managing and reporting risk across operational units. While developing an ERM program does not replace the need for day to day risk management, it can improve the framework and tools used to perform the critical risk management functions in a consistent manner. Eliminating redundant processes improves efficiency by allocating the right amount of resources to mitigating the risk. Benefit five: effective coordination of regulatory and compliance matters Bond rating agencies, financial statement auditors, and regulatory examiners, have begun to inquire about, test, and use monitoring and reporting data from ERM programs. Since ERM data involves identifying and monitoring controls and mitigation efforts across the organization, this information can help reduce the effort and cost of such audits and reviews. Through all of the benefits noted above, ERM can enable better cost management and risk visibility related to operational activities. It also enables better management of market, competitive, and economic conditions, and increases leverage and consolidation of disparate risk management functions


Process for Establishing an ERM Framework:1. Common language around risk2. Risk management steering committee3. Roles and responsibilities4. ERM methodology5. Risk appetite statements6. Risk identification7. Risk prioritization8. Risk mitigation plans (RMPs)9. Risk monitoring and reporting

ERM Framework

Presenter

Presentation Notes

Common language around risk The risk management function (or equivalent) must establish and educate the organization on common terminology regarding risk. A common definition of risk is – the potential for loss, or the diminished opportunity for gain, which can obstruct the achievement of the firm’s business objectives. Common terminology will facilitate communication across business units. 2. Risk management steering committee It is important to establish a senior management level committee to provide oversight of the implementation of the ERM Framework. In addition the committee will help delineate the roles and responsibilities within the Framework. 3. Roles and responsibilities Roles and responsibilities must be clearly defined and understood throughout the organization. Board of directors & CEO - have ultimate accountability for all risks. Risk management practices must be discussed periodically and risk management related policies must be reviewed and approved. Senior management - design, implement, and maintain an effective Framework. Develop policies and procedures, establish and monitor the risk appetite, and report regularly to the board of directors. Promote a risk-aware culture. Business units - identify, assess, measure, monitor, control, and report risks to senior management. Manage relevant risks within the framework established by senior management. Ensure compliance with policies and procedures. Support functions (i.e. Legal, HR, IT, etc) - provide support to business units in developing and enforcing policies and procedures. Internal Audit & Compliance - monitor and provide independent assurance of the effectiveness of the Framework. Risk management - coordinate the establishment of the Framework and provide risk management expertise. 4. ERM methodology Develop a methodology for the ERM Framework. This should include definitions of key risk terms, descriptions of roles and responsibilities, and clear procedures for risk identification, assessment, measurement, mitigating, monitoring, and reporting. 5. Risk appetite statements A formally written document that comprises all of the key business areas. The document should take into account the firm’s strategic direction and objectives. It should clearly outline the firm’s capacity to take risk and its tolerance for potential loss. In addition, a risk appetite must be regularly reviewed and approved by senior management and board of directors. 6. Risk identification This can be completed via risk control self-assessment (RCSA) approach; coordinated by risk management and conducted with subject-matter-experts. This method uses a risk taxonomy to identify applicable risks, inherent risk levels, quality of internal controls, and residual risk levels. The process consists of the following steps: Identify applicable risks and describe the business activity that exposes the business unit to the risk. This includes credit, market, liquidity, operational, event, and strategic risk. Establish the inherent risk level (H, M, L) and typical annual damage. Inherent risk is anything that prevents the achievement of business objectives without consideration of internal controls. Typical annual damage, if applicable, can be estimated based on subjective judgment of the business unit with consideration to both past (actual losses) and potential future occurrences. Assess and rank the quality of internal controls (H, M, L) and reason for the assessment. Internal controls mitigate the inherent risk and involve the implementation of policies, procedures and standards. Calculate the residual risk level (H, M, L) which remains after taking into account relevant internal controls. For example, a Medium inherent risk and Low quality of internal controls will result in a High residual risk level. Note: High, Medium, Low are popular scales in the financial services industry; however, other ranking scales may be used. Another method of identifying risks is to evaluate all processes within the firm and create a list of potential risk sources (known as Business Process Mapping). This step should be completed by the risk management department in conjunction with knowledgeable and well-seasoned employees of various departments within the firm. This method allows for open communication/ discussion and can reveal individual risks, risk interdependencies, and areas of control or risk management weakness. Other techniques include, actuarial models, scenario analysis, external data collection, and comparative analysis. 7. Risk prioritization Using the results of the RCSA for each business unit, prioritize key risks based on the residual risk levels. Discuss all High residual risks with the risk management steering committee and set risk mitigation plans. 8. Risk mitigation plans (RMPs) RMPs must be established by taking a risk-based approach to address the areas with the greatest control weaknesses and largest potential for loss. Firms will generally run out of resources before they run out of risk therefore the High risk items must be given priority. Target completion dates and responsible owners must be selected to facilitate the risk mitigation process. 9. Risk monitoring and reporting Key risks that were identified must be monitored and periodically reported to senior management and board of directors. ERM BenefitsEstablishment of an ERM Framework is not a one-time exercise that only involves a few participants. It is an intensive, dynamic and continuous process that requires firm-wide participation. When implemented successfully ERM will produce many benefits to the organization. An effective ERM Framework will: Allow an organization to gain a clear picture of its overall exposure to risk Improve firm-wide understanding of risks and controls Reduce operational losses Improve the deployment of capital Align risk appetite and strategy (business objectives) Facilitate board and senior management oversight Breakdown silos between various departments and across all risks (promote transparency) Result in a more efficient use of resources Improve regulator, rating agency, and shareholder perception Enhance internal control Promote a culture of risk awareness After considering the benefits of implementing an ERM Framework, it is surprising to see that only 36% of institutions participating in Deloitte’s Sixth Global Risk Management Survey had an ERM program in place. Although 72% reported that the benefits of ERM outweigh the costs.


ERM Challenges: • Defining a common risk language• Demonstrating the benefits/value of ERM (e.g. cultural issues)• Establishing ownership for particular risks and responses• Identifying risks and quantifying potential damage• Prioritizing risks across the organization• Developing RMPs to ensure the risks are appropriately managed• Risk reporting- deciding what information should be shared and how• Ensuring RMPs are carried out• Formulating the risk appetite statements• Lack of reliable data & insufficiency of technology (MIS)

ERM Framework

Presenter

Presentation Notes

Enterprise risk management implementation is not considered an easy task. It requires organizational agreement/cooperation and a strong senior management team. Although there are clear benefits to ERM, challenges also exist. By examining some of these challenges, organizations will be better prepared to establish their own enterprise risk management programs. Challenges that an organization might run into include: Defining a common risk language Demonstrating the benefits/value of ERM (e.g. cultural issues) Establishing ownership for particular risks and responses Identifying risks and quantifying potential damage Prioritizing risks across the organization Developing RMPs to ensure the risks are appropriately managed Risk reporting- deciding what information should be shared and how Ensuring RMPs are carried out Formulating the risk appetite statements Lack of reliable data & insufficiency of technology (MIS)


Request for Proposal (RFP):

ERM Framework

Consultant Location Contact Price Evaluation Score

Blended Rate

Project Hours

Sebastien de la Lande

London Sebastien de la Lande $18,000 48.00 $150/hr($1,200 daily)

120 hrs(15 days)

BDO Canada LLP

Toronto Sam Khoury, Partner Advisory Services

$39,025 68.84 $175($1,400 daily)

223 hrs(28 days)

Marsh Toronto Cristina Scenna, Senior Vice President

$75,000Full scope

49.20 $250/hrPer phase

($2,000 daily)

338 hrsFour phases

(42 days)

CAMMS Vancouver Jarred Thomas Manager – North America

$48,450 42.15 $125/hr($999 daily)

388 hrs(48.5 day)

MNP Toronto Cliffe Trollope, Parner Enterprise Risk Services

$38,880 73.89 $270/hr($2,160 daily)

144 hrs(18 days)

PWC Toronto Christopher O'Connor, Partner

$60,000 63.00 N/A N/A

• Proposal concise in the deliverables, cost and timelines

• Better value for money• Price negotiable and inclusive • Supported by COL Risk

Management

Recommendation

1. BDO Canada LLP BE AWARDED the contract for professional consulting services for the development of an Enterprise Risk Management (ERM) Framework in the amount of $39,025, HST excluded, in accordance with the Corporation’s Purchasing Policy;

2. Management BE AUTHORIZED to undertake all the administrative acts that are necessary in connection with this project; and

3. The approvals given herein BE CONDITIONAL upon the Corporation entering into a formal contract relating to the subject matter of this approval with project work to commence no later than Q3 2019 recognizing the current corporate priorities and work load.

ERM Framework

Questions & Discussion ERM Framework

STAFF REPORT 2018 – 40 TO: Board of Directors of the London & Middlesex Housing Corporation

(LMHC) for the Board Meeting of November 22, 2018

FROM: Josh Browne, Chief Executive Officer

SUBJECT: Enterprise Risk Management (ERM) Framework

RECOMMENDATION: That, on the recommendation of the Chief Executive Officer, the following actions BE TAKEN with respect to the development of an Enterprise Risk Management (ERM) Framework for the London & Middlesex Housing Corporation (LMHC), noting proposals for the project where called and processed consistent with LMHC Purchasing Policy Guidelines with the project being funded from the 2019 Operating Budget:

i. BDO Canada LLP BE APPOINTED Consultants for the development of an Enterprise Risk Management Framework, $39,025, HST excluded, in accordance with the Corporation’s Purchasing Policy and ;

ii. Management BE AUTHORIZED to undertake all the administrative acts that are necessary in connection with this project;

iii. the approvals given herein BE CONDITIONAL upon the Corporation entering into a formal contract relating to the subject matter of this approval with project work to commence no later than Q3 2019 recognizing the current corporate priorities and work load.

STRATEGIC ALIGNMENT: This report is consistent with LMHC’s new Strategic Plan with particular linkage to our strategic goal of “Long Term Financial Growth and Stability” and “Organizational Effectiveness”. PURPOSE: The purpose of this report is select a consultant to support LMHC in developing an Enterprise Risk Management (ERM) program, to provide the Board with an overview of Enterprise Risk Management (ERM) and our approach for implementing ERM at London & Middlesex Housing Corporation (LMHC).

______________________________________________________________________________ Board of Directors Meeting Page 2 of 5 November 22, 2018

BACKGROUND: The Board has requested that LMHC develop an Enterprise Risk Management framework to improve the organization’s capacity to manage risk. Management of LMHC in cooperation with the City of London’s Risk Management Department, will be supporting the development and implementation of this framework through the purchase of professional services as the corporation does not have the required internal expertise. The Board will play an important role in the oversight of ERM and accordingly, this report is an effort to introduce ERM, explain the ERM process and methodology and to show alignment of the proposed framework with best practices. To ensure success, the ERM process will be slowly phased into strategic and business planning activities and will adhere to a best practice ERM methodology using COSO (Committee of Sponsoring Organization) framework. Given that, this is a multi-phased project requiring specific expertise, an external consultant has been selected to oversee the development, implementation, including how the ERM program will be monitored and introduced to the organization. Enterprise Risk Management Overview Risk may be defined as “anything that may prevent LMHC from achieving our objectives at the strategic, operational and project/program level.” Enterprise risk management is the process undertaken to identify, assess, respond, monitor and review the full spectrum of LMHC’s risks. The ERM process can help LMHC assess the effect of risk against our objectives at the strategic, operational or project/program level. LMHC will work with the consultant to develop an Enterprise Risk Management program, and to embed risk management in decision making at all levels across the corporation. The benefits of an ERM Program include:

• Providing the Board with reasonable assurance that LMHC is managing our risks;

• Developing a common language for discussing risk at all levels of the corporation and with the Board; and

• Assisting with enterprise-wide planning and decision making. The ERM framework is defined as the “set of components that provides the foundations for designing, implementing, monitoring, reviewing and continually improving risk management throughout the corporation.” ERM Framework & ERM Policy The consultant will guide the implementation of our ERM Program, through the development of a draft ERM Framework and ERM Policy. These documents will provide an overview of all key activities required for a successful ERM Program and associated timelines and responsibilities. It will be reviewed with our Senior Leadership Team and will then be presented to the Finance & Audit Committee as the ERM Committee. The role of the ERM Committee will be to provide oversight and input into the development and ongoing implementation of our corporate wide ERM program. This Committee will need to include Director-level representatives from all divisions in order to make use of all expertise within LMHC and facilitate discussions on how risk is inter-related across LMHC.


Risk Identification One on one interviews will be conducted with all members of the ERM Committee, and specific subject matter experts, to identify risks at a strategic level. A documentation review of LMHC’s policies, procedures and Board reports will be conducted. This will inform the development of a comprehensive list of strategic risks affecting all areas of the corporation, including the root causes and impacts of each risk. An inventory of controls will also be compiled that included processes, policies, practices and key employee positions currently in place to mitigate the risk. This information will be analyzed and compiled into LMHC’s Strategic Risk Register and presented to the ERM Committee for input. Risk Assessment A Risk Assessment workshop will be held wherein committee members are asked to rate each risk identified by two factors:

• Impact – What will happen if the risk occurs?

• Likelihood – How likely is the risk to occur? Also discussed will be the speed of onset, or how much warning LMHC is likely to have before the occurrence of the identified risks. The workshop will focus on residual risk, which is the measure of each risk remaining after controls have been put in place to mitigate the inherent risk. This work will be used to refresh the results of the initial Risk Assessment, which will then be updated on an annual basis to ensure that it is in line with best practices and that this information can be considered when completing divisional planning. Risk Response Risk responses are additional measures that should be undertaken to further mitigate risks. Generally, an organization will focus on risk response measures for its highest risks. The focus of the work will be to gain consensus on the top risks with the ERM Committee and Senior Leadership Team so that an appropriate risk response measures can be developed. Risk Monitoring & Reporting Once they are identified and assessed, risks (and risk responses) must be monitored and reported on a continuous basis. This will provide the Senior Leadership Team and the Board with updates on risks in their portfolio and across LMHC. As the ERM Program matures, these reports will provide greater assurance that key risks are being systematically identified, analyzed and managed across the corporation. It is best practice to report changes in strategic risks to the Board on an annual basis. It is important to do this in a way that makes sense for LMHC and that reports are provided based on a timeline that ensures that we can incorporate mitigation efforts into our existing planning, budgeting and performance management process. To achieve this, a primary focus in the work will be to ensure greater alignment with strategic planning. LMHC will work with ERM Committee to provide them with information on key strategic risks that should be considered in the divisional planning process and during any future development of a LMHC strategic plan.


Risk Appetite Risk appetite is the amount of risk the corporation is willing to accept in pursuit of value. As a best practice, risk appetite statements are developed with input from the Board. Risk appetite will allow us to understand the amount of risk LMHC is willing to take on in relation to each strategic priority and aids in shaping policy and strategy. The consultant will undertake this activity with the Board as part of the ERM Process. REQUEST FOR PROPOSAL: A Request for Proposal (RFP) for the development of an ERM framework based on the legislative requirement to provide rent-geared-to-income (RGI) housing to tenants in the City of London and the County of Middlesex was issued on October 1, 2018. Notice was also place on the Corporation’s website. A copy of the RFP has been attached to this report as Appendix 1. On or before the deadline of October 22, 2018 the following six (6) firms submitted detailed proposals. Table 1 – RFP Proposal Summary

Consultant Location Contact Price Evaluation Score

Blended Rate

Project Hours

Sebastien de la Lande

London Sebastien de la Lande

$18,000 48.00 $150/hr ($1,200 daily)

120 hrs (15 days)

BDO Canada LLP

Toronto Sam Khoury, Partner Advisory Services

$39,025 68.84 $175 ($1,400 daily)

223 hrs (28 days)

Marsh Toronto Cristina Scenna, Senior Vice President

$75,000 Full

scope

49.20 $250/hr Per phase

($2,000 daily)

338 hrs Four

phases (42 days)

CAMMS Vancouver Jarred Thomas Manager – North America

$48,450 42.15 $125/hr ($999 daily)

388 hrs (48.5 day)

MNP Toronto Cliffe Trollope, Parner Enterprise Risk Services

$38,880 73.89 $270/hr ($2,160 daily)

144 hrs (18 days)

PWC Toronto Christopher O'Connor, Partner

$60,000 63.00 N/A N/A

Note: In calculating the blended rate and project hours a 8 hour working day was assumed.

The Review Committee, received a copy of each proposal on October 25, 2018 and met on November 15, 2018 to evaluate and review the proposals and determined that an interviews of the top three proposals was not required to make a selection and recommendation to the Board. ANALYSIS: The Review Committee conducted a detailed review of each proposal using a predetermine evaluation tool that considered price, quality of service, response to the request, experience, general reputation and quality of references provided.


The Committee also reviewed the proposals with the City of London Risk Management Manager to ensure the review was complete and thorough. Based on the advice from the City and input from each member, the Review Committee selected the proposal from BDO Canada LLP (Attachment #2) as the best in terms of meeting the requirements and conditions of the RFP, including value for money. This included the expertise, guidance and leadership that LMHC and the Board was requesting as part of the RFP process. Their proposal was succinct, comprehensive and represented the highest price/value despite not receiving the highest evaluation score. BDO Canada LLP was the only consultant that provided a “Promise” in the form of a Client Service Charter. BDO made a number of commitments in working with LMHC including important and specific commitments related to their people, resources, fees, and approach. The commitments get right to the core of what makes their approach distinctively different. BDO are committed to completing this project on time and on budget as outlined in their proposal. In addition, BDO are open to negotiating changes to their proposed pricing, timeline, activities and milestones. It is also important to note that the total cost for this project will be $39,025, including all project related travel expenses and out-of-pocket expenses. FINANCIAL IMPACT: The selected proposal from BDO Canada will be accommodated within LMHC’s 2019 operating budget.

CONCLUSION: The purpose of ERM is to develop a framework to proactively identify, assess, respond to and monitor risks across the corporation. Rather than managing risks in silos, ERM involves all divisions across the corporation and promotes an understanding of how risk is inter-related across all divisions and the impact this has on the corporation as a whole. The development and implementation of an ERM framework will assist LMHC in further strengthening our corporate governance practices. The ERM framework will provide a common language for discussing risk at all levels of the corporation and with the Board. It will also provide clear guidelines and predefined timeframes for reporting key risks to the Board, particularly those that may impact our ability to successfully deliver on our strategic priorities and corporate goals. This will provide the Board with assurance that LMCH is managing risks in an effective and efficient manner.



Attachments:

Appendix 1 - Enterprise Risk Management Framework RFP

Appendix 2 - BDO Canada LLP Proposal

Request for Proposal

Enterprise Risk Management Framework

Proposals will be received until October 22, 2018

Copies of this proposal can be found at: www.lmhc.ca

http://www.lmhc.ca/

2

REQUEST FOR PROPOSAL I. General Information

Project Objective: To develop an Enterprise Risk Management (ERM) program that can

deliver substantial value while respecting the reality of budget

constraints.

Issuing organization: London & Middlesex Housing Corporation

1299 Oxford Street East, Unit 5C5

London, ON N5Y 4W5

RFP Issued: October 1, 2018

Questions must be received by: 4:30 p.m. October 8, 2018

Responses to Questions: 4:30 p.m. October 15, 2018

Date for Proposals: 4:30 p.m. October 22, 2018

The intent of this RFP is to solicit proposals with an honest intention to award a

contract. However, LMHC reserves the right to reject any or all proposals.

Contact for Further Information: Josh Browne, CEO

519-434-2765 ext. 272

[email protected]

II. Summary

The London and Middlesex Housing Corporation (LMHC) is seeking consultant services

for the development of an effective Enterprise Risk Management (ERM) program to help

shape business objectives, drive growth and to ensure long-term success. The

successful program will integrate risk management principles and business strategy to

execute risk-based decisions and solutions.

III. Background

London & Middlesex Housing Corporation (LMHC) is the largest social housing landlord

in the City of London and County of Middlesex. LMHC provides safe, modest and

affordable community housing in a respectful and fair manner to low income households

of London and Middlesex County on a rent-geared-to-income (RGI) basis.

Operating as an independent local housing corporation under the Housing Services Act, 2011 and governed by a board of directors, LMHC provides 3,282 homes to about

5,000 seniors, parents, children, singles and persons with special needs. LMHC’s

3

properties are owned by the City of London as its Sole Shareholder and include high

rise apartments, low rise apartment buildings, town homes, row housing, and detached

homes throughout the City of London and County of Middlesex. Made up of 56 full time

staff and 42 resident contacts, staff work within the framework of our guiding values and

beliefs to provide affordable, sustainable homes to members of London & Middlesex

County. LMHC’s is governed by a board of directors comprised of local business and

community leaders who set LMHC’s strategic direction and oversee operations.

A copy of our new strategic plan can be obtained at www.lmhc.ca

IV. Scope of Work and Deliverables

LMHC’s Board of Directors is seeking a consultant interested in designing and

facilitating an Enterprise Risk Management framework and program consistent with and

building upon the COSO framework in order to integrate risk management with strategy.

Working with the Board and LMHC staff, the selected consultant will be expected to (in

no order of importance or sequence):

• Assess the existing risk management practices in the organization;

• Draft an ERM policy document for adoption by the Board;

• Develop an ERM Handbook to guide the ongoing operation of ERM processes,

including the assignment of roles and responsibilities;

• Develop an Excel-based Risk Register, consistent with the processes in the ERM

Handbook;

• Interview all members of the management team and several members of the

Board to develop an understanding of our business and the potential risk

categories, risk capacity, risk tolerance and risk appetite;

• Conduct facilitated risk identification and assessment sessions with staff across

the organization;

• Document all risks identified in the facilitated sessions in the Risk Register,

including the assessment of likelihood and impact;

• For risks designated a priority, document our existing risk mitigation strategies,

assessed the adequacy of those strategies and adjusted the risk mitigation

strategies as appropriate;

• Identify key performance indicators for each “moderate” and “high” risks;

• Develop a Risk Dashboard for periodic reporting of risk status to the Board;

• Obtain Board approval for the ERM program through a report and oral

presentation.

http://www.lmhc.ca/

4

V. Timetable

October 8, 2018 Questions from consultant’s due

October 15, 2018 Responses to be posted on LMHC’s website

October 22, 2018 Proposals Due

October 29, 2018 RFP Decision

November 2018 – January 2019 Planning Activities

March 2019 ERP program final report and presentation completed

VI. Selection Process

LMHC’s Staff will review all proposals and make recommendation for approval to the

Board. Price will not be the sole factor in evaluating the submitted proposals. LMHC

may consider any factors it deems necessary and proper including but not limited to:

price, quality of service, response to the request, experience and general reputation.

VII. Information Required of Respondents

In responding to this RFP please use the following format. Response to RFP should be

no more than 5 pages in length, plus attachments and must be provided in an electronic

format:

Section 1. Summary of the Proposal

Provide a brief summary of Sections 2 through 5 of the proposal.

Section 2. General Description of the Planning Activities Recommended

Provide a brief statement of your understanding of the requested effort including the

conclusions.

Section 3. Work Plan

Provide information about proposed activities that would involve key stakeholders such

as LMHC Board members and staff.

Section 4. Budget

For each task in Section 3, please identify the expected hours and the billing rate for

each activity. Please also identify the total overall project costs.

Section 5. References

Please supply the names and contact information of three references for which you

have worked on similar projects.

5

VIII. Proposal Submission

Proposals can be submitted via email to : [email protected]

And mailed to:

London & Middlesex Housing Corporation

Attention: Laura Palmer

1299 Oxford Street East, Unit 5C5

London, ON N5Y 4W5


October 22, 2018

LONDON & MIDDLESEX HOUSING CORPORATION

PROPOSAL FOR ENTERPRISE RISK MANAGEMENT SERVICES

TO: JOSH BROWNE Chief Executive Officer London & Middlesex Housing Corporation 1299 Oxford St. W., Unit 5C5 London, ON N5Y 4W5

FROM: SAM KHOURY, CPA, CITP, CRISC Partner, Advisory Services BDO Canada LLP 20 Wellington St. E., Suite 500

Toronto, ON M5E 1C5

BDO CANADA LLP | RISK ADVISORY SERVICES

Tel: 416 865 0111 www.bdo.ca

BDO Canada LLP TD Bank Tower 20 Wellington St. E., Suite 500 Toronto, ON M5E 1C5 Canada

BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

October 22, 2018 Josh Browne Chief Executive Officer London & Middlesex Housing Corporation 1299 Oxford St. W., Unit 5C5 London, ON N5Y 4W5 Subject: Enterprise Risk Management Services Dear Josh,

We would like to thank you for the opportunity to provide a proposal to offer enterprise risk management (“ERM”) services to the London & Middlesex Housing Corporation (“LMHC” or the “Client”). The following summary proposal document will demonstrate why BDO is the firm that is best able to meet your requirements. We believe that BDO is the right choice to be your ERM service provider for the following reasons:

1) LONDON & MIDDLESEX WILL BE A TIER 1 CLIENT FOR BDO - You will receive priority client service which includes superior responsiveness, flexibility, and access to our best practices and technologies as part of our relationship.

2) TAILORED AND PRACTICAL SERVICE DELIVERY – One of our specialties is the development and implementation of practical service solutions for our distinct clients. This ensures that our approach to your ERM program will be pragmatic and appropriate. You will receive our contemporary ERM practices, technology, and methodologies with a full understanding of an identified approach, specifically tailored for LMHC.

3) WE KNOW THE INDUSTRY AND ITS REQUIREMENTS - We have a thorough understanding of municipal not-for-profit organizations and our service team has assisted numerous organizations with ERM mandates. You will have a unique team that will be familiar with your operational environment and will ensure that the ERM assistance you receive from BDO will be practical and appropriate.

4) BDO & THE SERVICE TEAM DELIVER THE “BEST OF BOTH WORLDS” – BDO has the capabilities, network, and strength of a large-scale, global player with flexibility, specialist expertise, and personal service. We have a dedicated advisory group to deliver ERM services and can bring in accounting, tax, and other advisory services, as required.

5) COST EFFECTIVE FEES - BDO’s approach to fees is to tailor our methodology, with the input of management, to achieve results. BDO utilizes professional staff to help ensure that you receive competitive fees and strong emphasis on project management that includes regular monitoring and reporting to ensure the project runs on time and achieves the agreed upon outcomes.

We are enthusiastic about the opportunity to serve LMHC and further develop our strategic partnership.

Yours Truly,

Sam Khoury, CPA, CITP, CRISC Partner, Advisory Services BDO Canada LLP 416 369 6030

LONDON & MIDDLESEX HOUSING CORPORATION | ERM SERVICES | BDO RISK ADVISORY SERVICES – 3 -

TABLE OF CONTENTS

SECTION I – SUMMARY OF the PROPOSAL ........................................................................................ 4

SECTION II – GENERAL DESCRIPTION OF THE PLANNING ACTIVITIES RECOMMENDED ..................................... 4

SECTION III – WORK PLAN .......................................................................................................... 5

Ongoing ERM Training ............................................................................................................ 6

Communication ................................................................................................................... 6

Quality Control .................................................................................................................... 6

Proposed Project Timeline ...................................................................................................... 6

SECTION IV - BUDGET ............................................................................................................... 7

Professional Rates ................................................................................................................ 7

Proposed Effort and Related Professional Fees ............................................................................. 7

SECTION V – REFERENCES .......................................................................................................... 8

APPENDIX A – SERVICE TEAM RESUMES ........................................................................................... 9

APPENDIX B – ERM Experience & Credentials ................................................................................. 13

Summary of BDO’s ERM Experience & Credentials ........................................................................ 13

APPENDIX C – Enterprise Risk Management Methodology & Tools ...................................................... 14

Our Promise ........................................................................................................................ 16


SECTION I – SUMMARY OF THE PROPOSAL

We understand the importance of ERM to LMHC, especially given your plan to integrate it into your strategic planning process and all subsequent major decisions. This is an inspiring plan that we would be grateful to be a part of putting into motion and execution. In Section II we detail the investment we would make into ensuring that the subsequent phases move forward smoothly due to a solid commitment of time by our staff in learning about the LMHC environment. The planning activities (Pare to take place from November 2018 to January 2019.

In Section III we detail the phases that we would execute in order to achieve the tasks outlined in your RFP document:

Phase I: Project Planning, Phase II: Development of an ERM Policy & Framework, Phase III: Risk Identification and Assessment, Phase IV: Risk Mitigation Strategies, Phase V: Risk Reporting and Presentation, Phase VI: ERM Workshop.

This robust plan of effort and the hours required to complete each Phase and the staff breakdown for each phase are outlined in Section IV. We are excited to commence Phase II in January 2019.

In Section V we provide some insight into our team’s experience. Our references are listed and are excited to share their experiences with you.

In Appendix A we have provided biographies of our team that would be involved on the engagement. This is a highly qualified team of ERM experts. This team has experience working in the London area and have a commitment and passion for the community.

In Appendix B we detail our ERM Experience and Credentials for your reference.

In Appendix C we provide some insight into our ERM Methodology.

SECTION II – GENERAL DESCRIPTION OF THE PLANNING ACTIVITIES RECOMMENDED

We understand that LMHC has undertaken a redefining strategic planning process as outlined in the 2017-2020

strategic plan. We admire the work that has been done. It is an excellent approach to integrate ERM with

strategic planning to ensure that strategic efforts are evaluated on a risk-based approach. As well, it is

essential to evaluate the sufficiency of the risk being taken to achieve strategic objectives. We would begin

the engagement with an investment of our time in executing a detailed and comprehensive planning effort to

ensure that we are able to provide excellent value to LMHC some of the highlights of the process are outlined

below:

Comprehensive review of existing ERM and Strategic planning documentation; Comprehensive review of key documents, contracts and agreements; gaining an understanding of the knowledge level of the LMHC staff in ERM; Tour of LMHC assets/properties to gain an appreciation of the services provided; and Kick-off meetings with key staff at LMHC to gain an appreciation of the tasks that they perform, what

keeps them up at night and opportunities that they envision for the organization.

This investment of time would require very little involvement from LMHC. The only requirements would be the provision of key documentation on a secured SharePoint site (provided by BDO). We would schedule weekly calls to update on our progress and to clarify any questions on wither end. These calls would be roughly an hour in length.


SECTION III – WORK PLAN

The following table provides a detailed breakdown of the steps and deliverables of our five phase approach to this engagement. We have carefully considered the steps listed in your RFP and added in details of how we would approach those tasks. We have incorporated the steps listed in your RFP in bold below.

ER

M T

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ININ

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CO

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UN

ICA

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QU

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ON

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KEY STEPS & APPROACH DELIVERABLES

PHASE 1 - PROJECT PLANNING

Initial kick-off meeting to gain an understanding of LMHC’s strategic goals and objectives, business areas / operations, risks, and mitigating strategies.

Assess the existing risk management practices in the organization. Outline and clarify the basic links between risk appetite(s), risk tolerances, risk identification, risk

assessment, risk response, risk reporting, and other activities which contribute to the ERM program. Coordinate and develop a project plan for all key deliverables expected to be conducted for the

mandate, with due dates assigned to each.

Kick-off meeting Project plan Existing program

assessment

PHASE 2 – DEVELOPMENT OF AN ERM POLICY & FRAMEWORK

Articulate LMHC’s strategic goals and objectives into risk appetite statement(s). Set preliminary risk tolerances with management and define risk assessment / measurement criteria

(i.e. likelihood and impact scales). Develop a fundamental ERM framework to establish clear ERM program expectations, roles and

responsibilities, lines of communication, frequency of reporting, etc. Draft an ERM policy document for adoption by the Board. Discuss, adjust, and confirm the ERM framework, policy, risk appetite statement(s), and risk

tolerances with feedback from management. Develop an ERM Handbook to guide the ongoing operation of ERM processes, including the assignment

of roles and responsibilities.

Risk appetite statement(s)

Preliminary risk tolerances

Risk assessment / rating scales

ERM policy ERM Handbook

PHASE 3 – RISK IDENTIFICATION & ASSESSMENT

Conduct comprehensive ERM risk interviews and workshops (approximately 8-10 preliminary and secondary interviews; with voting) to:

Identify risks; and Validate the appropriateness of risks identified and the supporting ratings using the defined risk

measurement criteria. Assumption of two sessions one for inherent ratings and one for residual rating BDO will facilitate these workshops by providing training on key risk identification and assessment

principles, promoting and guiding risk discussions, documenting identified risks, and formulating risk assessment results.

Develop an Excel-based Risk Register, consistent with the processes in the ERM Handbook that include the assessment of likelihood and impact;

Communicate the results of the risk assessment to management.

Risk interviews Risk registry

PHASE 4 – RISK MITIGATION STRATEGIES

For risks designated a priority, document LMHC’s current risk mitigation strategies, assess the adequacy of those strategies and adjust the risk mitigation strategies as appropriate.

Risk mitigation assessment

Risk Mitigation Strategies

PHASE 5 – RISK REPORTING AND PRESENTATION

Identify key performance indicators for each “moderate” and “high” risks. Work with management to understand the Board’s ERM reporting expectations. Develop a robust ERM reporting package with a focus on improving clarity, ease of understanding,

and risk management decision making appropriate for Board level reporting. Reports developed will be tailored and include ERM dashboards to highlight key risks, effectiveness

of risk mitigation efforts, changes in external and internal risk landscapes, and the overall risk assessment(s) conducted.

Obtain Board approval for the ERM program through a report and oral presentation.

Risk reporting – KPIs, management and board reporting packages

Board presentation on ERM program.

PHASE 6 – ERM WORKSHOP

Facilitate live-session ERM risk workshop with the Board / Finance & Audit Committee to communicate risk assessment methodology and purpose, present key risks, and discuss new and emerging risks facing LMHC.

Update ERM program based on the results from the ERM risk workshop.

ERM workshop, including report / handout


ONGOING ERM TRAINING

Throughout the course of the engagement, BDO will perform ERM training to ensure all key players have a consistent understanding of what ERM is, why ERM is being established, how the program works, who is involved, and when the various program elements are to be executed. BDO facilitates this training through the use of interviews, presentations, workshops, and supporting documentation specifically tailored to your organization.

COMMUNICATION

BDO believes that a strong relationship with management is critical to the success of every engagement. Therefore, we will be responsible for communicating with management and the Finance & Audit Committee on the key results / deliverables of the ERM mandate. We will also be looking for feedback and input from management and the Finance & Audit

Committee during the execution of the engagement.

QUALITY CONTROL

At the planning stage, the project manager will obtain a clear understanding of the mandate and ensure BDO has the appropriate team in place with the expertise and experience needed to perform the engagement at BDO’s required level of quality.

Key aspects of our quality control / assurance process include:

On-going supervision and project management;

On-going discussion internally and with management;

Detailed review of all client deliverables, including risk registries, reports, etc.;

Utilizing qualified staff; and

Participation in regular practice inspections.

PROPOSED PROJECT TIMELINE

Outlined below is our proposed timeline for the execution of the engagement. The timeline is broken-out by each of the key phases. This timeline is flexible based on specific requirements indicated by the management and the Board.

TIMELINE OF EXECUTION

PROJECT PHASE NOVEMBER DECEMBER JANUARY FEBRUARY MARCH

PHASE 1 - PROJECT PLANNING

PHASE 2 – DEVELOPMENT OF AN ERM POLICY &

FRAMEWORK

PHASE 3 – RISK IDENTIFICATION & ASSESSMENT

PHASE 4 – RISK MITIGATION STRATEGIES

PHASE 5 – RISK REPORTING

PHASE 6 – ERM WORKSHOP

ONGOING ERM TRAINING, COMMUNICATION & QUALITY

CONTROL


SECTION IV - BUDGET

Our goal is to deliver value that exceeds our fees, and we always strive to meet that goal. We believe that professional fees should reflect both parties’ commitment to a mutually beneficial partnership. We achieve our goals only when we have met or surpasses your expectations. We expect that your selection of service provider will be based on an evaluation of the approach, experience, qualification of personnel, and reputation. Our fees are intended to be highly competitive without compromising quality. Should our fee estimates conflict with your expectations we would value the opportunity to discuss with you prior to your final decision.

PROFESSIONAL RATES

It is important to note that we are offering a discounted blended rate given our desire to develop a great working relationship with LMHC.

PRICING SCHEDULE

ASSIGNED RESOURCE HOURLY RATE ESTIMATED % ON PROJECT

PARTNER $450 10%

MANAGER $250 35%

SENIOR CONSULTANT $175 35%

CONSULTANT $150 20%

TOTAL BLENDED RATE $220

TOTAL DISCOUNTED BLENDED RATE $175

Notes & Assumptions:

1. The scope of the project remains as described within this proposal document. 2. The fees are based on the assumption that the project will not be delayed excessively. 3. The blended rate is inclusive of out-of-pocket expenses. Our travel costs will be absorbed.

PROPOSED EFFORT AND RELATED PROFESSIONAL FEES

The table below highlights our expected hours of effort and the related fees, by phase. We have prepared our fee proposal based on our absorption of any learning and transition time. We will ensure we spend more effort upfront to understand your organization and to gain a strong understanding of your specific risk areas.

PROJECT PHASE EXPECTED

HOURS EXPECTED FEES

PHASE 1 – PROJECT PLANNING * 24 $4,200

PHASE 2 - DEVELOPMENT OF AN ERM POLICY & FRAMEWORK 55 $9,625

PHASE 3 – RISK IDENTIFICATION & ASSESSMENT 80 $14,000

PHASE 4 – RISK MITIGATION STRATEGIES 24 $4,200

PHASE 5 – RISK REPORTING 24 $4,200

PHASE 6 – ERM WORKSHOP 16 $2,800

TOTAL ~223 HOURS $39,025

*Planning time allocated is in excess of our time to review the existing ERM and Strategic planning materials and to gain an initial understanding of the environment at LMHC


SECTION V – REFERENCES

ORGANIZATION NAME: FOOD BANKS CANADA

KEY CONTACT CHRIS HATCH, CEO

KEY CONTACT PHONE NUMBER AND EMAIL 647-504-7045 | [email protected]

DATE / PERIOD OF WORK PERFORMED May, 2018 to present

NATURE OF WORK PERFORMED

BDO is assisting Food Banks Canada in the re-design of the ERM framework. As part of this

engagement, BDO has assisted management in:

The development of likelihood, impact and severity scales;

The identification, assessment and evaluation of risks, including risk categorization,

through completing risk workshops at the inherent and residual levels;

Development of a comprehensive risk registry, including mitigating measures;

Development of ERM reporting templates;

Providing reports to management and presenting reports to the Board on the updated status

of ERM;

Defining the organization’s risk appetite statements; and

Assisting management in the development of action plans to address risks that remain

outside of the risk appetite.

ORGANIZATION NAME: GEORGE BROWN COLLEGE

KEY CONTACT MARK NESBITT, VP CORPORATE SERVICES

KEY CONTACT PHONE NUMBER AND EMAIL [email protected]

DATE / PERIOD OF WORK PERFORMED February, 2016 to July 2016


BDO was engaged to perform a strategic risk assessment of George Brown College. As part of this

engagement BDO conducted the following key tasks:

Conducted risk interviews with members of senior leadership team and stakeholders

throughout the institution

Identified risks into strategic risk clusters for management’s assessment and remediation

Aligned identified risks to George Brown College’s Strategic Priorities

Performed a Benchmarking Analysis of George Brown’s Risk Profile to other Ontario

Colleges & Universities

Conducted a live risk workshops with the senior leadership team to present findings, risk

profile & derive action to further manage risks in the pursuit of their strategic objectives.

ORGANIZATION NAME: SPROTT INC.

KEY CONTACT AHSAN AHMED, CHIEF COMPLIANCE OFFICER

KEY CONTACT PHONE NUMBER AND EMAIL 416.943.6388 | [email protected]

DATE / PERIOD OF WORK PERFORMED October, 2017 to Present


BDO is supporting and assisting Sprott in the implementation of their Enterprise Risk

Management (“ERM”) program. BDO has been engagement to perform the following tasks:

Conducted risk interviews to validate risk registries, including relevant risks and controls

and the appropriateness of risk ratings;

Perform periodic testing of ERM controls;

Assist in the development of ERM reporting dashboards and presenting ERM testing reports

to senior management and the Board; and

Facilitate ERM training sessions with Sprott employees and Board Committees including the

communication of risk assessment methodology and ERM concepts.



APPENDIX A – SERVICE TEAM RESUMES

SAM KHOURY

Qualifications & Experience:

Sam has over 20 years of experience providing assurance and Risk Advisory Services to clients across numerous industries. Sam provides specialized services, such as enterprise risk management, internal audit, third party assurance, implementation of compliance management systems, internal controls, and IT governance. His areas of focus include implementing change management projects, including Enterprise Wide Risk Management and other corporate governance initiatives.

Prior to joining BDO, Sam led and managed the implementation of various risk management initiatives at TD Bank. His demonstrated areas of expertise are internal controls compliance and implementations, risk and control self-assessments, COSO and COBIT, business process re-engineering, enterprise risk management, and corporate governance.

Functional Expertise:

Managed the creation and redevelopment of a multitude of ERM frameworks across a number of industry sectors

Establish an initial risk universe/registry

Establish an ERM policy, framework, and manual

Establish ERM reporting for Senior Management and the Board

Develop and deploy ERM training for Senior Management and the Board

Facilitate risk identification, and/or assessment workshops

Execute an assessment of ERM program elements versus best practices or standards

Areas of Specialization:

Not-for-Profit

Healthcare

Financial Services

Professional Designations:

Chartered Professional Accountant (CPA)

Certified Information Technology Professional in the US (CITP)

Certified Risk and Information Security Control (CRISC)

Education:

Bachelor of Commerce, Finance – Concordia University, Montreal, Québec

Sam Khoury, CPA, CITP, CRISC Partner, Risk Advisory 416 369 6078 [email protected]


MONICA BELLISARIO


As a Manager providing risk advisory services for over four years, Monica has assisted numerous clients in the development and execution of tailored enterprise risk management programs. Monica has worked with Senior Management and Boards in the development, implementation, and execution of enterprise risk management initiatives. She has been involved in projects from the planning through to the reporting phase and has a robust understanding of the requirements for each stage.


Developing tailored and comprehensive ERM programs

Establishing an initial risk universe/registry, as well as ERM policies, frameworks, and manuals

Facilitating risk identification and/or assessment workshops

Development and deployment of ERM training for Management, Audit Committees and Boards


Not-for-Profit

Education

Education & Professional Designations:


Chartered Accountant (CA)

Bachelor of Commerce, Accounting - Ryerson University, Toronto, Ontario

KAYLEIGH PHYPERS


Kayleigh has assisted clients in the development and execution of tailored enterprise risk management programs. As a Senior Consultant with over four years of experience, Kayleigh has provided workshop training on the identification and assessment of risks and has assisted in the development of risk assessment methodology. Kayleigh has also assisted in the development of risk registers, completed workshops to identify risk significance and tolerance within various organizations, and linked risks to organizational priorities and objectives.


Facilitated risk identification and/or assessment workshops

Development of frameworks, risk assessment methodology and training on risk identification, assessment and managing risks


Certified Internal Auditor (CIA)

Education:

Honours Bachelor of Commerce, - DeGroote School of Business, McMaster University, Hamilton, Ontario

Bachelor of Commerce (Exchange) - University of Western Australia, Western Australia


Not-for-Profit & Healthcare

Monica Bellisario, CPA, CA

Manager, Risk Advisory

416 865 0200 Ext. 3235

[email protected]

Kayleigh Phypers, CIA Senior Consultant, Risk Advisory 416 865 0200 Ext. 3423

[email protected]


PAUL KENSIT


Located in BDO’s London office, Paul has 20 years of experience providing auditing, accounting and advisory services to both not-for-profit and privately-held companies. Paul’s strengths include his ability to work closely with management to ensure compliance with regulatory requirements while maintaining his focus on the integrity and accuracy of the financial information. Paul has extensive experience in:

Auditing a significant number of local clients in the not-for-profit, construction, manufacturing and consumer business sectors.

Providing operational, management, financial reporting systems and financing advice to organizations.

Education:

Masters of Accounting - University of Waterloo, Waterloo, Ontario

Honours Bachelor of Arts, Finance, and Accounting - University of Waterloo, Waterloo, Ontario

Professional Designations and Affiliations:



Chair of the Finance Committee for Big Brothers Big Sisters of London and Area

ERICA TEKLITS


Erica is a Partner with BDO’s Greater Toronto Area (GTA) group. She has over 25 years of experience providing auditing, accounting and advisory services to public and privately-held companies.

Erica assists clients with developing strategy and the overall planning and execution of audit, review and compilation engagements. She is focused on developing strong relations with senior client management, identifying and resolving issues early, and thoroughly understanding clients’ businesses, ensuring they receive exceptional client service. Experienced with Canadian GAAP, IFRS and ASNPO accounting standards, she offers advice and ideas on accounting and reporting issues, and internal controls and operating efficiencies.




Professional Affiliations:

Community Foundation of Mississauga

Board Member and Vice Chair, Etobicoke Services for Seniors

Paul Kensit, CPA, CA, MAcc Partner, Audit and Assurance BDO London 519 432 5534 [email protected]

Erica Teklits, CPA, CA National Leader, Not-for-Profit Partner, Audit and Assurance 905 272 7809 [email protected]


JOE FILIPPELLI


Joe is a Senior Manager in the Risk Advisory Services practice. He has provided professional accounting services for over 10 years, specializing in internal audit, risk management, compliance and financial process transformation. Joe has a portfolio of many not-for-profit organizations. He specializes in risk advisory services including enterprise risk management and internal audits.

Joe was the head of Internal Audit at Porter Airlines where he implemented and managed an internal audit department for three years. Joe articled in the audit assurance practice at PricewaterhouseCoopers LLP where he lead a variety of SOX- 404 and financial statement audits.


Not-for-Profit

Financial Services

Natural Resources and Agriculture

Public Sector

Manufacturing

Education:

Honours Bachelor of Business Administration, Accounting – Schulich School of Business, York University, Toronto, Ontario




Joe Filippelli, CPA, CA Senior Manager, Risk Advisory 416 369 3128

[email protected]


ACTIVE / RECENT ERM CLIENTS

George Brown College

Franco-Nevada Corporation

Confederation College

Services Canada

Lakehead University

Greater Toronto Airport Authority

Sprott Inc.

Americas Silver and Gold

Equity Financial Trust

EcoSynthetix

Natural Resources Canada

Progressive Group of Credit Unions

Tandia Credit Union

Traine Construction

APPENDIX B – ERM EXPERIENCE & CREDENTIALS

SUMMARY OF BDO’S ERM EXPERIENCE & CREDENTIALS

The proposed service team has in-depth experience with clients within the not-for-profit sector, as well as has conducted numerous ERM engagements. Our ERM practice is central to our success as a group and makes up more than 25% of our client base. The following is a summary of our ERM initiatives:

Practical & Tailored Approach to ERM

Our specialty is assessing, developing and implementing

practical ERM strategies and frameworks for our distinct

clients. This ensures that our recommendations are

pragmatic and appropriate for each of our clients. You

will receive our contemporary ERM methodologies and

practices, specifically tailored for an organization such

as yourself.

Frameworks & Methodologies

Our approach to ERM is based on COSO ERM and 31000’s

ERM Governing Framework, whereby critical principles

are used to derive an organization specific ERM program

that is tailored to the size, complexity and current

business requirements.

ERM Tools & Reporting

We utilize robust ERM reporting tools to capture risk

identification, measurement, assessment, mitigation,

reporting, and risk action plans. This allows our clients to

automate the ERM process, capture historical ERM

information and present live up-to-date ERM reporting

data for senior management and Finance and Audit

Committee members, as required.

Execute ERM Training Program

Initiatives

Execute ERM Risk

Identification and

Assessment Workshops

Benchmark Current ERM Program to Governing Framework

Assess ERM Program

Effectiveness

Establish an ERM Program

(Policy, Framework, and Manual)

Due Diligence and Risk

Assessment to Assist

Management in M&A

Evaluate, Select, and Implement

ERM Software Solutions

Develop ERM Reporting

Dashboard for Management and Board

Facilitate ERM Reporting

Outsourced ERM Program Management


APPENDIX C – ENTERPRISE RISK MANAGEMENT METHODOLOGY & TOOLS

Maturity Model Assessment

BDO’s ERM Maturity Model illustrated below captures the different stages an organization may be labeled as it transitions through its ERM journey. It is important to note that an “Optimized” stage is what is considered a “Leader” or “Best Practice” within the industry. Should one be at the “Intuitive” stage, striving for an Optimized stage may be at times too ambitious and can require substantial time. It is best to think of the ERM journey as something that develops over time and in doing so will be seen as a great value add for your organization. It is important to also decide early on, a plan and goal to envision what stage LMHC would like to achieve in the short, medium, and long term.

AD-HOC INTUITIVE STANDARDIZED MANAGED OPTIMIZED

• Assessing vulnerability to risks is not a critical priority

• Risk assessment and identification is ad-hoc or non-existent

• No risk or ERM policy exists

• No risk or ERM reporting amongst senior management and / or to the audit committee / board

• Responsibilities for risks are not well understood

• Risk assessment and identification is not a formal process

• No formal ERM policy exists but managing key risks is identified in other policies

• Some key risks are discussed amongst senior management or the audit committee / board

• Lack of focus on linkage between risks

• Monitoring and reporting functions are not consistent

• Developed set of risks (Risk Universe) is documented

• Risk framework and methodology is established

• Consistent risk assessment / approach defined and implemented

• Enterprise-wide risk assessment conducted

• ERM reporting amongst senior management and the audit committee / board

• Uniform application of risk management policies

• Key ERM issues are escalated up to top levels of management

• Standardized tools and templates are developed and utilized

• Robust processes exist for risk identification, measurement, reporting and monitoring

• Identify opportunity risks and exploit risks

• ERM is integrated with the organization

• Dynamic risk assessment process

• Linkage to performance measures and incentives

• Risk management is fully imbedded with strategic planning

• Continuous improvement programs are established

• Independent review of the ERM program is conducted periodically

ERM 4 Quadrant Approach

Our approach emphasizes the identification and assessment of risks into four quadrants as outlined in the graph below. This graph summaries best practices and specifies that management should focus on high and medium risks. Note that the risk response can span from accept, control, share, or mitigate/control. As we execute your risk assessments the appropriate response will be developed.

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ERM Framework

We have developed a standard ERM Approach & Methodology for implementing ERM programs. Our typical approach and deliverables are outlined in the graphic above. It is important to note that we have tools and templates to assist in rolling out of an ERM program at an organization but it is equally important to flag that implementation of a practical and effective program should result in significant deviation from the templates. Our philosophy on such projects is to ensure and demonstrate compliance with the underlying principles of ERM. In addition, our BDO ERM Framework has been developed to align to COSO ERM and ISO 31000. Most importantly, it allows flexibility in not requiring a “one size fits all” approach.

We also believe that ERM implementation should be integrated with strategy-setting. ERM redefines the value proposition of risk management by elevating its focus from tactical to strategic. ERM is about designing and implementing capabilities for managing the risks that matter. The greater the gaps in the current state and the desired future state of the organizations risk management capabilities, the greater the need for ERM infrastructure to facilitate the advancement of risk management capabilities over time.

ERM Program

The following diagram highlights BDO’s ERM Program. As shown, this is the framework in which an organization may achieve optimal value-added from its program. All levels within an organization are highlighted and contribute to the program (i.e., through board level to operations and support functions). Monitoring and reporting takes place throughout the program, and improvements can be made at all levels. This program is customizable to fit the needs of LMHC.

OUR PROMISE

Think of this as a client service charter. We have made a number of commitments in this document and as we work with you, we will define more exact scope for each. Important and specific commitments related to our people, resources, fees, and approach, but the promises here get right to the core of what makes our approach distinctively different.

WE WANTED TO MAKE IT EASY FOR YOU TO COMPARE OUR PERFORMANCE TO OUR PROMISES, SO WE’VE SET OUT FIVE CLEAR COMMITMENTS RIGHT UP FRONT.

We have carefully selected the team for the London Middlesex Housing Corporation. The team outlined in this document is the team that will be responsible for delivering exceptional services. We are responsible to ensure that any turnover in staff is addressed by adding an equally or more qualified team member.

We will commit whatever resources are necessary to achieve agreed deadlines. We will be consistent, yet flexible. We will ensure effective and robust project management disciplines and reporting are implemented to ensure consistent service delivery.

We are an ideas organization. We will make a contribution every time we meet. We will extend our advice to real support.

We see endless opportunity through innovation. We will continually look for ways to create a more relevant and useful service to LMHC. Our first attempt to demonstrate to you our innovative techniques is to showcase our proposed service delivery option and pricing.

We will deliver exceptional value. BDO continually looks for ways to deliver more than what our clients expect, providing you with value for money and a high attention to detail.

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