MINUTES of the Meeting of the Board of Directors

# 05-2007-80 MINUTES of the Meeting of the Board of Directors of Canadian Blood Services held at Canadian Blood Services, 1800 Alta Vista Drive, Ottawa, Ontario, on Thursday and Friday, May 17 and 18, 2007, at 9:00 a.m. PRESENT: Verna Skanes Graham Sher John Dawson Kenneth Ezeard Bernadette Garvey Gary Glavin Leah Hollins Frank Jones James Kreppner Lynn Mason Michael Mehta Marilyn Robinson Gord Sanford Thomas Warner being a quorum of the directors of the Corporation, and Rod Brandvold Dana Devine Sophie de Villers Watson Gale Ian Mumford Pauline Port Gail Mingie Verna Skanes took the Chair and Watson Gale acted as Secretary to the meeting. A quorum of the Directors of the Corporation being present and notice of the meeting having been given to all Directors of the Corporation, the meeting was declared to be duly constituted for the transaction of business. The proposed Agenda for the meeting was reviewed and ON MOTION duly made, seconded and unanimously carried, IT WAS RESOLVED THAT the Agenda of May 17 and 18, 2007, be approved as amended with the addition of Canadian Blood Services Captive Insurance Company Limited Board configuration. 2 MINUTES OF PREVIOUS MEETING Verna Skanes referred to the minutes of the meeting held on March 27 and 28, 2007. After review and discussion, ON MOTION duly made, seconded and unanimously carried, IT WAS RESOLVED THAT the minutes of the meeting of the Board of Directors of the Corporation held on March 27 and 28, 2007, be approved as presented. MATTERS ARISING FROM PREVIOUS MINUTES None. REPORT OF THE CHAIR Verna Skanes said she had no new matters to report in terms of business since the last meeting, but updated the Board on a conference she attended regarding the stem cell network program. CEO REPORT – EMERGING ISSUES Graham Sher updated the Board on the Buffy Coat component production and reported that two new issues have been identified during the British Columbia & Yukon pilot: hemolysis (breakdown) of SAG-M Red Cells and excessive anticoagulant in blood bag tubing. It was reported that since the beginning of March 2007, 1,800 components have been discarded due to hemolysis and Ian Mumford and other members of the Executive Management Team provided a detailed update to the Board on efforts made to resolve this problem, as well as discussions held with the blood bag vendors. The Board was also provided with an update on discussions with the British Columbia Transfusion Medicine Advisory Group and the British Columbia Ministry of Health. The Executive Management Team is evaluating a number of options to address the issues in order to continue the Buffy Coat implementation and to complete the bacterial testing strategy. An update will be provided at the June Board meeting. Graham Sher updated the Board on the Apheresis Technology Equipment Replacement initiative and reported that the submission has gone into Health Canada. The Board was updated on the blood management system and ISBT 128 and it was reported that this was briefly discussed at the Finance & Audit Committee and will be brought back to the Board in September. Graham Sher advised that a lot of work is being done on pandemic planning in obtaining the vaccine for critical Canadian Blood Services staff and donors and the Board was advised that work is still ongoing with respect to staff relocation and inventory management. 3 Graham Sher advised that the Laboratory Information System was implemented at all donor testing sites by the end of March 2007 and that results are now released five to six hours earlier, permitting earlier end labelling of components. Graham Sher reported that notice has been given to Canadian Blood Services by the supplier of the donor skin disinfection kits of its intention to change the way its kit is made available. An update was provided on meetings held with the vendor who agreed to supply these kits to Canadian Blood Services to the end of March 2008. At that time a differently packaged unit will be supplied at a further cost of approximately $300,000. An update was provided on Chagas testing availability. It was reported that a licensed test will not be available for the Canadian marketplace until Q2 of 2008 at the earliest. A discussion took place on pathogen inactivation. The Board was advised of the recent case in Australia in which an organ donor was infected with a virus that killed three recipients of organs. This is a type of arenavirus and given the fact that this virus was readily transmitted via organ transplants means that it is also probable that it can be transmitted by blood. CORPORATE PLAN TO BUDGET – 2007-2008 Graham Sher reported that a detailed discussion was held on the 2007-2008 budget at the Finance & Audit Committee the previous day. He then provided key highlights to the Board on how this reconciled with the corporate plan. Graham Sher reported that there was a $17.5 million reduction from the Corporate Plan request, which was achieved through the negotiation process with the Provincial/Territorial Contacts, and he outlined how this reduction was achieved. He reported that, going forward, the format of Canadian Blood Services' financial statements will show more detail and will be easier to understand. Graham Sher reported that Canadian Blood Services was able to balance the 2007/2008 budget within the funding provided by the Provinces and Territories. John Dawson, Chair of the Finance & Audit Committee, provided an update from the meeting held the previous day and reported that there is a forecast of a $2 million surplus at year end, which amount includes use of the Transition Fund. He reported on the foreign exchange rate and stated that the Committee received Management's assurance that the reduction in the budget for this year will not affect the safety of the blood system. The Committee, however, discussed the impact reductions may have on the blood system in future years. John Dawson noted that one of the comments that came out of the Board survey was the need for Board members to have more discussion around financial matters and he suggested that this would be a good time to hold that discussion. 4 The comment was made that Canadian Blood Services is balancing the budget this year on funds that are not necessarily going to be replaced, such as the Transition Fund. Graham Sher said that the organization is committed to finding further efficiencies within the system. WHISTLEBLOWER PROGRAM: PRELIMINARY RECOMMENDATIONS Watson Gale referred to the material in the binder including the draft Open Disclosure Policy and Procedures Guide. With respect to employee communications, a proposed schedule is contemplated to be rolled out in the fall of 2007. Investigations under the policy will be conducted with impartiality and will be overseen by General Counsel's office or through Human Resources in the field. Decisions being asked of the Board today is to embrace the program in general and move forward with the Open Disclosure Policy and decide whether or not to engage a third party confidential service provider to receive calls from employees. A discussion followed and the general consensus of the Board is that a third party provider is needed. Watson Gale noted, however, that third party providers do not investigate complaints and he gave examples of the investigation processes. It was also felt that the nature and significance of the incidents should be taken into account. A discussion also took place regarding an appeals process and it was felt that an Ombudsman role could be an option to satisfactorily deal with this issue. The policy wording was reviewed and it was agreed that revised policy options and how it relates to other Human Resource policies would be brought back to the Board at a later date. FINANCE AND AUDIT COMMITTEE REPORT John Dawson, Chair of the Finance & Audit Committee, provided highlights from the Finance & Audit Committee meeting held on May 16, 2007. The Committee received an update from Michael Foster, Executive Director, Internal Audit, on internal audit activities. The 2006-2007 Internal Audit Plan Update was reviewed and it was noted that two projects were deferred to next fiscal year so that the 2006-2007 plan is now nearing completion. The Committee looked at the Status of Open Audit Issues and the summary schedule prepared by Michael Foster. John Dawson noted that there are projects with open audit items and these are currently being worked on. The Committee focussed on the refrigeration alarm audit and concern was expressed about the amount of time being taken to resolve these 5 issues. It was reported that SOP's are being developed and that these take time. It was also reported that interim solutions have been put into place. John Dawson reported that the Committee received one report on Disaster Recovery Planning and he updated the Board on the key conclusions coming from that report. A discussion took place at the Board meeting around third party off-site data storage. John Dawson reported that the annual review was done of Canadian Blood Services' insurance coverage, noting that premiums have been on a slight decline. There have been some coverage enhancements and this has been reviewed with care. John Dawson raised the issue of Directors & Officers ("D&O") insurance noting that the Committee had a discussion regarding the various layers of coverage and whether there was any need to carry the excess coverage. He stated that the conclusion was to leave the D&O coverage as is. John Dawson reported that the Committee then turned to Internal Controls Over Financial Reporting which was brought back to the Committee from the previous meeting. He stated that further information was provided on the Building Block approach which considers the level entity controls and uses the Canadian Blood Services Quality Management System developed by Christian Choquet's group to determine the maturity of processes. He reported that the Committee looked at the testing of the effectiveness of the controls and decided they would be under the review of Michael Foster. He stated that the other part of this process is the disclosure controls and said that this is the system by which assurance is given that information has been properly reported in the financial statements. The approach for this will come back to the Committee in June. John Dawson also reported that there was discussion on the financial section of the Annual Report. It was decided that the financial section will be improved by adding more information and consideration will be given to adding productivity indicators. Finally, the Committee had a discussion around the Board Balanced Scorecard and this is to be worked on further and brought back to the Committee in June. HUMAN RESOURCES COMMITTEE REPORT Gary Glavin provided highlights from the Human Resources Committee meeting held on May 16, 2007. Gary Glavin reported that the Task Tracking Calendar was reviewed and the various items rated. He stated that collective bargaining will become a standing item at all Human Resources Committee meetings. Laurie Richer, Executive Director, Employee Relations & HR Operations provided an overview of the new human rights in the workplace policies: Discrimination and Harassment Policy and Respect in the Workplace Policy. 6 The Committee also reviewed the Board Balanced Scorecard and this will be worked on further and brought back to the June Human Resources Committee meeting. Gary Glavin reported that the Committee then held an in-camera session to discuss the CEO evaluation. A discussion took place at the Board meeting on the human rights policies and whether it is necessary that they come before the Board. It was requested that a summary of Board policies be included in the June Board binder. SAFETY, SCIENCE & ETHICS COMMITTEE REPORT Ken Ezeard provided highlights from the Safety, Science & Ethics Committee ("SSEC") meeting held on May 16, 2007. Ken Ezeard reported that the Committee discussed the Hamilton withdrawal and advised that Dana Devine would report at the next SSEC meeting on the meeting held on May 10, 2007, of the group conducting the Hamilton study. Ken Ezeard reported that there has been a change in directorship of the Biologics and Genetic Therapies Directorate and Elwyn Griffith is now the new Acting Director until a permanent replacement is found. Ken Ezeard advised that the Task Tracking Calendar now includes details of educational opportunities and conferences. The Committee had a detailed three-part presentation on present, potential and emerging risks, these being Transfusion Related Acute Lung Injury, Arenavirus, and Pathogen Inactivation, and Ken Ezeard provided an outline of what was covered in this presentation. As a result of Christian Choquet's absence the Committee did not receive a report from Quality, however, Dana Devine did provide information on an E&A that involved a misplaced B19 log, resulting in the loss of 179 units of recovered plasma. The Committee also received a report on the development of clinical guidelines for appropriate use of IVIG. These guidelines have been published in the journal Transfusion Medicine Reviews and are in the process of being circulated to hospitals. The final matter dealt with by the Committee was the Board Balanced Scorecard and specifically objectives which applied to the Safety, Science & Ethics Committee. 7 CANADIAN BLOOD SERVICES 2008-2011 CORPORATE PLAN Graham Sher provided to the Board an overview of the approach for the preparation of the Canadian Blood Services 2008-2011 corporate plan and to provide context and an outline of the process used for determining proposed corporate initiatives. Graham Sher outlined some of the key activities pursued and advised that a scoring model was developed to help prioritize initiatives. He explained that the goal of the scoring model is to reward highly focused, benefit driven and reasonably sized initiatives. He also provided an overview of proposed corporate initiatives by portfolio (Safety, Operational Excellence, and Prepare for Tomorrow). Graham Sher explained that a nine-cell grid was used to help analyse each portfolio and he explained how this is used. He also reviewed the high-level schedule for proposed initiatives. Under the strategic program, Canadian Blood Services will be requesting approval from the Provincial / Territorial Contacts for funding for a National Cord Blood Bank and Facilities redevelopment. Graham Sher provided an overview of Canadian Blood Services' 2008-2011 corporate plan funding request. He noted that, under blood operations, production targets are established on hospital shipments. The estimate of 2008-2009 incremental funding request over the 2007-2008 budget was also reviewed. Graham Sher reported that the Executive Management Team launched a challenge to senior managers to find efficiencies for the 2008-2009 year. He reviewed the collections per full time equivalents (FTE's) and Canadian Blood Services' performance compared to international benchmarks. Graham Sher then reviewed the other business lines of Canadian Blood Services, including UBMDR, Plasma Protein Products and Patient Services. A general discussion took place and confirmation requested of the amount in the Contingency Fund. A question was raised and answered as to what financial buffers are in place should a crisis occur within the blood system. PLANNING & PRIORITIES COMMITTEE REPORT Lynn Mason provided highlights from the Planning and Priorities Committee meeting held on May 16, 2007. The Committee reviewed the Canadian Blood Services 2008-2011 Corporate Plan and Sophie de Villers outlined the results of the Board Survey. 8 The Committee also reviewed the Board Balanced Scorecard as it relates to the Planning & Priorities Committee and Lynn Mason referred to the handout on strategic oversight. He suggested that other Committees provide him with their recommendations and that Sophie de Villers and the various Vice Presidents co-ordinate the other committee's scorecards and these will be brought back in June 2007. With respect to R10 – Promote Canadian Blood Services' Strategy with the Members – it was felt that this is an activity in which Board members should be involved. NATIONAL LIAISON COMMITTEE REPORT Gord Sanford provided an update on the second day of meetings held on the MSM Consultation process on April 20, 2007, and noted that NLC members felt that their views were seriously accepted. There was a regular meeting of the NLC on April 21, 2007, and the following items were discussed on the agenda: malaria deferral, genotyping research, cord blood banking, Buffy Coat, and World Blood Donor Day. The Committee also discussed Martin Gorham's presentation which had been given to the Board at the previous meeting. Graham Sher updated the Board on activities taking place for World Blood Donor Day on June 14. Sophie de Villers reported that a consultation meeting on cord blood banking will take place June 1-3, 2007 in Ottawa, which consultation will use the syntegrity methodology. CANADIAN BLOOD SERVICES CAPTIVE INSURANCE COMPANY Watson Gale referred to Canadian Blood Services Captive Insurance Company Limited and CBS Insurance Company Limited and reminded the Board of the decision to have mirror Boards of Directors. He reminded the Board of the conflict of interest as a result of John Dawson serving as a commissioner of FICOM and reported that John Dawson's appointment with FICOM has expired and no conflict of interest now exists. The Board then adopted the following: WHEREAS: (i) the Board of Directors of Canadian Blood Services, as a matter of process, endorses the directors for the board of the wholly owned subsidiary, Canadian Blood Services Captive Insurance Company Limited ("CBSE"), and authorizes the CEO of Canadian Blood Services to vote as the shareholder in respect thereof; (ii) Mr. John Dawson was elected to the Board of CBS Insurance Company Limited but, due to a conflict of interest circumstance with his role as a Commissioner of FICOM, the financial services regulator in British Columbia, he was not elected as a director of CBSE, an entity regulated under the umbrella of FICOM; and 9 (iii) As of April 20, 2007, John Dawson's appointment with FICOM expired and, as a result, the conflict situation no longer exists. NOW THEREFORE BE IT RESOLVED THAT: Mr. John Dawson shall become a director of CBSE and Dr. Graham Sher, or his designate, be and is hereby authorized to act as the corporation's proxy to elect Mr. Dawson accordingly. OTHER BUSINESS Appointment of Officers There have been a number of changes to both positions and individuals appointed as officers with a need to further update the records of the corporation to bring the officer appointments in line with the current management structure. ON MOTION, duly made, seconded and unanimously carried, IT WAS RESOLVED THAT, in addition to the Chair of the Board, the Vice Chair of the Board, the CEO and the Corporate Secretary, the following positions be approved as “offices” of the Corporation, the individuals named next to such offices be appointed as the officers filling such positions and in the event of a change of individual in any such position, the individual filling such role shall be deemed to be an officer of the Corporation: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) Chief Operations Officer – Ian Mumford Vice-President – Quality and Regulatory Affairs – Christian Choquet Vice-President – Medical, Scientific and Research Affairs – Dana Devine Vice-President – Corporate Services –Pauline Port Chief Financial Officer – Pauline Port Vice-President – Strategy Management – Sophie de Villers Vice-President – Talent Management – Rod Brandvold Vice-President & General Counsel – Watson Gale Corporate Secretary – Watson Gale The Board of Directors met in-camera to discuss the recommendations of the Human Resources Committee regarding the annual performance evaluation and compensation review of the Chief Executive Officer. There being no further business, the meeting terminated at 12:25 p.m. __________________________ Chair ___________________________ Secretary