Vision forParent/Subsidiary Relationship:

Stratis Healthand Minnesota Alliance for Patient Safety (MAPS) share a common vision for safe care everywhere and have a mutual interest in elevating the voice of patients in support of the vision for safer care. Through this alliance, the organizationswillstrive for seamless devotion and extended capacity to safe care everywhere through coordination and integration between MAPS and StratisHealth, maintaining and deepening community leadership, and coalescing operational and administrative activities.

Common Understandings:

  1. Actions Taken. At separate meetings,held in September 2016,the Stratis Health and MAPS boards of directors each affirmeda decision to move forward with developing a plan to implement a durable strategic alliance. The alliance will take the form of a Parent/Subsidiary structure, with Stratis Health as the parent and MAPS as the subsidiary. This structureis chosen because it allows simultaneously for integration of safety strategy and work while maintaining the MAPS brand and identity. Such an arrangement maintains MAPS’ 501c3 status.
  1. Office space. MAPS will relocate to Stratis Health space,located at 2901 MetroDrive, Suite 400,Bloomington, MN 55425-1525.
  1. Governance Principles.In the spirit of mutual collaboration and intent to support a partnership toadvance safe care everywhere, the Joint Committee members have developed a set of Governance Principles. The principles are intended to maintain the brand identity, as well as the strong leadership and community engagement, of MAPS,while emphasizing the essential coordination between the MAPS and Stratis Health required to make this arrangement successful:
  2. MAPS and Stratis Healthenter into this agreement guided by ashared commitment to pursue safe care everywhere. Both organizations will:
  3. Practice collaboration[1]through frequent and intentional communication about strategy, tactics and partnerships;
  4. Coordinate strategic planning to amplify impact on creating safe care everywhere.
  5. The organizations will remain as separate 501 c3 non-profit organizations, with Stratis Health as the Sole Member of MAPS.
  6. The Parent/Subsidiary relationship is not intended to result in either organizationhaving the power of decision-making overthe other. For example, although Stratis Health has the legal authority to approve the MAPS’ slate of directors, at no time will Stratis Health unilaterally determine who the slate of board nominees is, or refuse to approve the slate of directors without offering an explanation.
  7. The MAPS board will continue to emphasize leadership engagement in its strategic planning and implementation:
  8. MAPS will plan and implement its annual budget, and carry its own assets and liabilities, but will be part of a consolidated financial statement of Stratis Health.
  9. MAPS and Stratis Health together will articulate and pursue strategies that advance the safe care everywhere.
  10. The MAPS board will hire, supervise and evaluate the performance of its executive, in coordination with the Stratis Health CEO.
  11. MAPS board will propose its bylaws, governance policies, and procedures.
  1. Governance Agreement.In the Parent/Subsidiary structure, both organizations commit to reserving a certain number of spots on their board for the other organization,as described below. Each organization will retain its own board nominating process, but will develop policies and practices through which coordination shall occur so that the following considerations are reflected in the annual slate of directors and that recruitment of directors is coordinated.
  2. Two voting positions on the Stratis Health board will be held by members of the MAPS board at any given time, without increasing the number of Stratis Health board members. The MAPS Governance Committee will recommend which two board members to sit on the StratisHealth board at the appropriate time in the Stratis Health nomination cycle. It is the ultimate authority of Stratis Health whether or not the two recommended board members of MAPS are approved to serve on the Stratis board.
  3. One additional ex-officio non-voting position will be held on the board of Stratis Health for the Executive Director of MAPS.
  4. Three positions on the MAPS board will be voting members from Stratis Health, without increasing the number of MAPS board members. Two members will be from the board of Stratis Health, and the third voting position would be a standing board position on the MAPS board held by the President/CEO of Stratis Health. While Stratis Health has the ultimate legal authority to approve the slate of MAPS directors, in practice, Stratis Health’sNominating Committee will make a recommendation to the MAPS board for their approval of Stratis Health members to sit on the MAPS board.
  5. Board members of both boards will consider how to leverage the strengths of the two boards and breadth of expertise and influence present among board members, for example, through shared learning opportunities, through a Joint Subcommittee focused on the success of the affiliation, and/or through occasional adjacent or overlapping meeting scheduling.
  6. Please see “Actions to Take” below for Governance Actions recommended.
  1. Finances. One of the key financial assumptions is that MAPS’ membership contributions will continue to support MAPS operations during at least the first two years of the parent/subsidiary relationship. Each MAPS founding and strategic partner has been asked to extend their annual membership fee commitment to MAPS for the coming two years. Stratis Health, as a founding partner of MAPS,is committed to maintaining its current financial commitment of $20,000 per year to MAPS for fiscal year 2017 and 2018. Please see “Actions to Take” below for Finance Actions recommended.
  2. Staff. The MAPS Executive Director will continue to report to the MAPS board of directors in the new Parent/Subsidiary structure, while also having a “dotted line” reporting to the Stratis Health CEO. Importantly, the MAPS Executive Director and other staff would be integrated with the Stratis Health staff by physical proximity and formal and informal communication and meetings.See appendix for proposed staffing structure.
  1. Program Integration and Growth.
  2. The MAPS Executive Director and staff will be in coordination with Stratis Health CEO and staff, and that Stratis Health CEO and staff will proactively identify opportunities to work with MAPS to improve administration, operations, and programs.
  3. Stratis Health and MAPSwill pursue and grow future program opportunities to advance the vision of safe care everywhere; and to this end, MAPS and Stratis Health will work together to identify additional resources, both financial and human.
  1. Operations

a. Stratis Health intends to create an environment for MAPS in which the administrative activities needed to support MAPS programmatic success are seamless and integrated, with the costs of such administrative support allocated or charged minimally but in such a way to be compliant with Generally Accepted Accounting Principles and Stratis Health’s accounting system. The intended outcome is that the MAPS staff can focus their time and attention on patient safety initiatives and programs to achieve safe care everywhere.

Next Steps:

The boards of Stratis Health and MAPS agree to take the following steps in furtherance of their shared vision for legalParent/Subsidiary relationship:

  1. Actions to take:
  2. This agreement should be negotiated by the Joint Committees of both parties and ultimately brought forward to each board and their respective legal counsel for review and approval. Target date for approval:
  3. MAPS: January 2017 board meeting
  4. Stratis Health: January 2017 board meeting
  5. Governance:
  6. MAPS will amend their Articles of Incorporation to make Stratis Health the sole member of the organization within three months of both boards’ approval.
  7. The Governance Committee of MAPS and the Nominating Committee of Stratis Health will consider the impact of the proposed slate of director changes and each party’s board terms and coordinate with each other to develop a plan for board elections within three months of both boards’ approval.
  8. Finances:

MAPS will continue to be a membership organization into the foreseeable future, funded by sponsors and partners, which is important for community and leadership engagement. In addition, Stratis Health will support MAPS to broaden its revenue base to include grants and contracts, the result being a balanced source of revenue between membership support and grant/contract support, anticipated after approximately a two-year transition time,

  1. In the event that MAPS membership contributions wane in calendar year 2017 or 2018, the MAPSboard will draw upon its organizational reservessufficient to subsidize MAPS operating expenses in MAPS fiscal years 2017 and 2018 in the event of an operating loss.
  2. In supporting MAPS’ ongoing success as a part of Stratis Health, the Stratis Health board shall be open to utilizing its reserves in support of MAPS, in keeping with its Reserves Policy. For example, part of Stratis Health’s Reserves Policy allows for an Opportunity Fund which provides resources for targeted growth and development; and MAPS will be part of the annual Opportunity Fund planning cycle.

Agreed by Board Resolution

STRATIS HEALTH

Dated: January 27, 2017______

Chair, Board of Directors Agreed by Board Resolution

MAPS

Dated: January XX, 2017______

Chair, Board of Directors

APPENDIX

pg. 1

[1]Collaboration is practiced through the creation and maintenance of comprehensive planning and communication channels between Stratis Health and MAPS leadership. The parent: subsidiary structure will endeavor to balance the accountability and risk each partner contributes to the mutual objective: safe care everywhere. This structure is intended to support the sharing of resources, results and impact that furthers the mission of each organization.