ISSUES AND POLICY ADVISORY COMMITTEE - MINUTES
Oct 4/2007
Face-to-face in Toronto
Attendees:
Chair / Rob Dietrich / Vice Chair: / Peter DonovanMembers:
Bob Angel
Nigel Byars
Brian Gabel
Bill Hewitt
Nancy Lala
Barry Gorman
James Saretsky
Darla Sycamore
Timothy Wright
Guest: / Caroline Spivak (FH)
Staff: / Michael Conway / Ramona Dzinkowski / Lindsay Collins
MEETING MINUTES: Friday, Aug 24/07
Rob Dietrich welcomed the members to the meeting and took attendance.
Dietrich introduced the agenda for this meeting: To review the terms of reference, set agenda for committee for the coming year, to discuss whether or not the taskforce method is the right format for this committee and if so, are the current committees the right ones and are they properly staffed and appropriately chaired.
Lastly, to get updates from specific committees.
Minutes of the August 2007 meeting
Presented and accepted as written.
Overview of Agenda:
Caroline Spivak, a guest at this meeting and FEI Canada’s PR associate from Fleishman- Hillard was introduced by Michael Conway. Main purpose of hiring Caroline is to leverage all the great work IPAC and FEI Canada have done in the past and continue to do presently, and enhance the profile of FEI Canada and all of its committees.
First Item: Terms of Reference:
Rob Dietrich explained that this living document has not been updated in a year and has had a committee structure for the last many years. The mission, which has been accepted by the FEI board, has three objectives: to develop positions, to be viewed as being experts by our members and to be advocates for positions to the greater community.
Nigel Byars added that the text in the mission does not specifically state that we should be advocates and if that is what is meant, then that is what it should say.
Dietrich posed the question of whether we want to be advocates, or do we want to be advisors?
Byars says that we take instruction from the articles of incorporation of FEI Canada which state that we do not have the discretion to vary the terms of reference on our own. If we think they need to be changed there is a process that we need to go through to alter the mandate of the organization. The mission of the committees within FEI Canada should be aligned with the overall mission of the organization.
FEI should be primarily acting in the interest of its members, while keeping its eye on the greater public good.
Bob Angel said that FEI should be making public pronouncements and this committee should contribute to those.
Nigel Byars reiterated the notion that pronouncements offered by IPAC rather than from FEI Canada as a whole diminishes their credibility. There should not be a caveat involved when issuing any type of pronouncement, response, comment letter etc.
Bill Hewitt agreed that it is time to review the articles of incorporation.
Michael Conway reiterated that many committee members are not fans of the caveat. The board has requested that each committee review their terms of reference, suggest appropriate revisions and then send them to the governance committee to review all the terms of reference to ensure that they are all complete, have no gaps and that they make sense without any duplication. After this process they go to the board and are approved.
Rob Dietrich explained that he is going to report to the board what this committee’s opinion on the matter is and they will take the issue forward.
Michael Conway added that these terms of reference are from November 2006 and must be reviewed as per the new strategic direction of FEI Canada. Our new strategic direction is to obtain increased profile for FEI Canada to benefit the members. His view is that IPAC should advocate on selected issues where we can be seen as an authoritative leader because we are experts on the subject matter.
Bill Hewitt suggested that it’s the language “as advisers” that we should change and change it to “act on issues” thereby leaving it ambiguous as to what action we take.
Darla Sycamore made that point that CFERF is the charitable element of FEI Canada and that we get our charity status by not advocating on issues. As such, we can not be seen to be advocating on issues otherwise we shall lose our charitable status. So we must be really careful on that. CFERF can do research that will serve as background for the committees to take action on but it can’t and is not an advocacy group. Whether we say that we are advocates or not, we actually are because the CICA and other authorities are listening and taking our views on issues currently.
Dietrich summarized the consensus of taking Bill’s suggestion and putting in the words “act on issues” so that we can be advisors or advocates in a number of things. He suggested that the committee take this to board.
ACTION: Taskforce was created to make the suggested revisions and submit them to the board. The task force is: Bill Hewitt, Peter Donovan, Rob Dietrich, Michael Conway and Nigel Byars.
The intended timing is for revisions to go to the governance committee on October 31st, 2007.
Second Item: The form of the committee:
Issue: Should we maintain the current form of stated subcommittees grouped under broad categories with people who have interest in those areas? The current method allows interested members to develop the issues. The areas are generally standard and constant. They allow for engagement on a monthly basis on those particular issues and have room to invite additional members to participate on a subcommittee if there is a topic of interest to them that arises.
The subcommittees are limited to 6 to 8 members and are productive very productive due to their lean size.
Bill Hewitt added that the complexity of the topics we engage our intellectual content resources in are such that we need to have specialty subcommittees to opine with effectiveness.
Rob Dietrich concluded that he thinks it has worked well with the subcommittees followed by a small reporting meeting.
Rob Dietrich summarized: Consensus is to keep the committee structure.
ACTION: We should poll the members of IPAC to see what topics everyone is interested in pursuing – new ones and/or current ones.
Third Item: Reports from existing committees:
Internal Control Certification sub-committee has been inactive and should therefore be moved from ACTIVE to WATCH.
Corporate Governance sub-committee chair needs to be filled as Rob Dietrich is stepping down. Rob will poll the members of the taskforce to see if there are members willing to take on the task.
Private Company Issues sub-committee needs a chair. Ramona Dzinkowski stated that Jim Saretsky accepted the role of Chair of the Private Company Issues sub-committee.
She also mentioned that the CCR wanted to join with the IPAC on Private Company Issues so they can respond jointly to some exposure drafts.
Michael Conway and Rob Dietrich volunteered to take on the task of recruitment to the IPAC.
Corporate Finance sub-committee:
Rob Dietrich reported that the committee has not met for a few months but the topic that has interested them is that of ‘Creating an Effective Finance Function in the Company’ – which falls into the category of education of the membership.
They have currently identified 6-7 broad categories of capabilities in the finance area. The completed some research and the chair was supposed to write it up but was unable to. It will be done but this committee needs leadership to move forward because there is interest.
ACTION: This topic spawned off of the research conducted on the Role of the CFO thus, perhaps we can review the research from 2005 with Robert Half and update the study.
Darla Sycamore stated that this might be a CFERF topic but also perhaps for some kind of FEI Canada sponsored event.
Capital Markets sub-committee:
Bill Hewitt reported on the order of priority on this subcommittee’s agenda. They are:
(1) Carbon Credits (2) Income Trusts in Canada, Private Equity Buyouts (3) Changing Landscape in Private Equity. Articles are currently on-going and in draft form. Content of these is summarily described in the minutes of the previous meeting.
The rating agencies are under scrutiny. A study by the Ontario Securities commission and supported by the capital markets institute to review whether or not credit rating agencies add value, has lead to significant reforms in the rating process. They have made it more independent as a business. The asset backed commercial paper and the mortgage debacle has brought a great deal of attention to these agencies.
Pimco’s Bond manager said the housing crisis will fixate the Federal Reserve in the U.S. for years. It is far worse than people believe it to be. And it will be a key determinant of monetary policy for many years to come.
Michael Conway asked Bill if it is worse in Canada or in the States. Bill responded that this issue is a question for discussion. In Canada we do not have an investigative press to turn over the little stones and find every little detail. You can read a great deal into the liquidity crisis and asset backed commercial paper and read a lot about the national bank and the consortium that Justice Purdy Crawford is heading, they’re having difficulty garnering consensus. Their report is due in the next few days. In Canada, watch the Purdy committee report because that’s Canada’s negotiated settlement. Proportionately it could be more serious in Canada than the U.S.A.
For more information read the Deutche Bank report and the UBS Report. Both are taking big hits on the derivative side of this equation. Bank of America and City Corp are taking big hits on the asset side, on the books portfolios plus some derivatives.
Bill Hewitt asked the committee if we think that the liquidity crisis is a matter for comment? The main issues are financial discipline and internal control.
ACTION: Bill suggested that if the rest of IPAC thinks this issue is of substance that the Capital Markets sub-committee could work with the Corporate Governance sub-committee.
Also we will need to make a quick comment on the Purdy Crawford Report.
Michael Conway suggested that we do this in two steps: (1) inform members with an informational piece and (2) advocate a selected stance – financial discipline and internal controls are good.
ACTION: Bill Hewitt said he could create a few paragraphs on this for the newsletter.
Pension sub-committee:
Peter Donovan reported that the Pension committee is going to meet after this meeting and discuss the consultation paper from the Ontario government. He consulted Ian Markham, one of the advisors to the commissioner, about the current situation. They’re going to try to get Markham on the phone this afternoon to see what’s going on.
Nancy Lala asked for an update on the Pension survey and Ramona Dzinkowski reported the following: The Aon Pension survey has been completed and we are currently waiting for the results to be tallied. We should have something in a couple of weeks. Ramona does not believe that they will be able to extrapolate the findings to a larger population; this is just a case-by-case basis. There is no projection.
Tax Policies and Competitiveness sub-committee:
Barry Gorman reported on three items: (1) the tax committee had a meeting in September and made a start on their pre-budget submissions, gathering some general ideas and the format that they’re going to follow. The budget submission is an advocacy item not an advisory document. (2) Barry is preparing a short memo for the next FEI Express. Finance has concluded a protocol with the Americans, they are going to be eliminating withholding tax on cross border interest…(3) They are losing one of the most important people on the Committee –this committee is going to have to be rejuvenated.
Internal Control Certification sub-committee:
No one on the call. WATCH
Public Sector Accountability sub-committee:
No one on the call.
Private company Issues sub-committee:
Still has yet to get off the ground. Now has a new leader, Jim Saretsky.
Future Meeting dates:
To be updated and have them planned out through June 2008.
Other Business:
Ramona Dzinkowski reported on CFERF in coordination with IPAC. There are four surveys that have been scheduled for the next few months. They are: (1) RFP, a funded research program through CFERF. This survey is on Internal Control Certification and is coming out this fall. The survey is in the design stage so if we want some input Ramona can distribute it to the IPAC for comments and recommendations. (2) Microsoft – topic TBD. They have committed through the strategic partnership program to do a survey with them this year.
(3) IBM – will be on issues surrounding outsourcing.
(4) The Readiness of Canadian companies to adopt IFRS. This is joint sponsored research with Robert Half and Ernst & Young.
Ramona said that at the beginning of the year FEI does an economic forecast, CFO forecast, and she would like to do something on that as well as it gets a lot of press. She would also like to line up a couple of other research projects to in-line with the breakfast seminars to inform that content. That is the plan to connect the surveys with the seminars.
Bob Angel volunteered to look into getting student volunteers for CFERF research.