A report on GOVERNANCE MODEL AND STRUCTURE

For the Beaver Hills Initiative

May, 2017 INTRODUCTION Starting in November 2016, Otago Consulting looked at developing a new governance model for the Beaver Hills Initiative (BHI) given the designation earlier in 2016 by UNESCO to an official Biosphere Reserve and BHI’s intent to formalize into an incorporated stand-alone organization. Through meetings, workshops and interviews with current members, other Biospheres and local non- governmental organizations and legal consultation, we have arrived at several recommendations for the BHI Board. This report provides details of those recommendations and some of the background required for the next step of incorporating Beaver Hills Biosphere Reserve with a new structure of membership, funding and governance.

PROJECT SCOPE Otago Consulting was commissioned to develop a governance model and recommendations to determine a corporate or other structure for the Beaver Hills Initiative. The project outline included two main goals: Goal 1: Development of a governance model to meet the needs of the BHI partners and compliant with UNESCO: . Review of current governance policy and procedures of the BHI. . Research governance models based on the existing BHI partnership collaboration and the recent designation of the Beaver Hills Biosphere. . Review other Biosphere Reserves governance models. . Facilitate a working session with the Executive Committee and the Board to discuss: o Principles of Governance and Boards of NGO’s o Board structure, roles and procedures o Board leadership, duties and responsibilities o Sequencing and timeframe for implementation of Governance model o Recommend the appropriate governance structure (non-profit corporation, society, other incorporated or unincorporated delivery vehicles) for the Beaver Hills Initiative . Consultation with legal experts

Goal 2: Develop and submit draft documents required for delivery of the recommended governance model . Research models of other Biospheres to determine the best model for the Beaver Hills Biosphere . Develop bylaws and policies in compliance with recommended structure and delivery vehicle and UNESCO . Apply for and receive legal status for the BHI . Develop a transition plan for the BHI and its partners to fulfill requirements under the Act

2 | P a g e PROJECT TEAM Gary Redmond – lead consultant Brenda Barber – research, interview and bylaw support Zack Lindop – legal support Edwin Radke – financial/audit support

PROJECT PROCESS AND TIMELINES 1. Document Review The project started in early November, 2016 with a review of documents provided by BHI and other sources: . Policies and Procedures . Canadian Biosphere Reserve structures . Indigenous inclusion workplan . Board minutes . Augustana Campus and the Beaver Hills Biosphere (Glen Hvenegaard, Augustana Campus) . Governance Matters! Part 3 (George Francis, U of Saskatchewan) . Learning From Each Other: Proven Good Practices In Canadian Biosphere Reserves (U of Saskatchewan) . Bylaws of several Canadian Biosphere Reserves . MOU between and the BHI

2. Board and Member Engagement

On November 9, 2016, the BHI Board was briefed on the project scope and planned activities which would engage members through individual interviews and two working sessions.

Between mid-November and mid-December, 25 BHI participants (members) provided information through either a telephone interview, face to face meeting or by email. The interviews were done in confidence and questions around understanding of current governance structure, issues resulting from current governance structure and preferred future governance structures or preferred elements or characteristics of a future governance structures were asked.

On January 20, 2017, a workshop was conducted with the BHI Board. The workshop agenda included: - Project scope - History of the BHI - Current Governance status – what we heard - Biospheres in Canada - Profile of 6 local NGOs and their governance structure - Participants were split into 3 groups – Elected officials, municipal employees, everyone else and answered a series of questions related to preferred state of: o Membership and funding o Organizational Structure and Funding o Incorporation (type of organization)

3 | P a g e On March 8, 2017, a workshop was conducted with the BHI Board to test the validity of draft recommendations for: - Legal Status - Membership and funding - Board governance - Organizational structure Information on timelines and pproposed initial budget were also provided.

3. Review of other Biospheres and local non-governmental organizations Throughout the course of the project, other Biospheres were consulted for guidance and examples. This included document review, email, telephone and one face to face meeting. Contact was also initiated with the Canadian Biosphere Reserve Association.

Most biosphere reserves in Canada are incorporated as non-profit organizations, and some have charitable status. The others are administered through an existing organization in their area. Biosphere reserves program activities are decided locally, but some can be linked to national or international programs.

4 | P a g e Clayoquot Sound Biosphere Reserve, BC Clayoquot Sound BR was incorporated as a non profit society in 2000 and is a registered charity. The membership of the CSBR is made up of eight participating communities. Each of the participating communities appoints a participating member; three of the communities may jointly appoint up to two additional persons to be members. Each participating member is a director; each participating community also appoints an alternate. The Board also has advisors – three from the Canadian Government; one from the BC Government and the Board may appoint up to five persons. Mount Arrowsmith Biosphere Reserve, BC Mount Arrowsmith BR was incorporated as a society in 2000. In 2014, it dissolved its society status and handed the management over to Vancouver Island University and the City of Parksville (Memorandum of Understanding to co-manage). MABR has built a roundtable involving First Nations, Municipal and senior levels of government, private industry, conservation groups and other regional representatives. Tsa Tué Biosphere Reserve, NWT The first biosphere reserve north of the 60th parallel in Canada, and among the largest in the world, Tsa Tué BR is led entirely by Indigenous Peoples. Waterton Biosphere Reserve, AB The Waterton BR was designed by UNESCO in 1979 and established as an informal association in 1980 by staff of Waterton Lakes National Park and members of the local community. , the The Waterton Lakes National Park Waterton Biosphere was incorporated as a non-profit association in 1990. The Board is comprised of community, academic, scientist, Parks Canada and municipal. Redberry Lake Biosphere Reserve, SK Redberry Lake BR was incorporated in 2000 as the Redberry Regional Economic Development Authority Corporation. Redberry Lake BR has a Board of Governors made up of Regional Municipalities, the Town of Hafford, the Redberry Lake Regional Park and representatives from UNESCO (Education, Culture and Science Sector). Riding Mountain Biosphere Reserve, MB Launched in 1971, Riding Mountain National Park Riding Mountain Biosphere Reserve Management Committee, it is made up of 15 municipalities, Environment Canada and Parks Canada. Long Point Biosphere Reserve, ON The Long Point BR is a non-profit charitable organization, incorporated in 1986. Individual members are individuals and sole proprietorships who have been appointed as individual members by the Board; Institutions members are companies, corporations, partnerships and unincorporated associations who have been appointed as institutional members by the Board.

5 | P a g e The board is made up of 16 board members elected by the individual and institutional members. Niagara Escarpment Biosphere Reserve, ON The Niagara Escarpment BR is a regulatory agency commission that operates at arms length from the Ontario Government. Georgian Bay Biosphere Reserve, ON The Georgian Bay Biosphere Reserve was incorporated as a non-profit corporation in 2004. Frontenac Arch Biosphere Reserve, ON The Frontenac Arch BR was incorporated as a non-profit organization in 2002. The Board is comprised of 21 volunteers. Mont Saint-Hilaire Biosphere Reserve, PQ The Nature Centre at Mont Saint-Hilaire has been working with McGill University since 1972. Members, either through payment, volunteer hours or a combination of both are entitled to attend and vote in the annual general meeting and apply to the Board of Directors. Lac-St-Pierre Biosphere Reserve, PQ The Lac-St-Pierre BR incorporated as a society in 1994. Membership is made up of citizens, stakeholders and community organizations, political bodies, financial partners, educational institutions and major industries. Charlevoix Biosphere Reserve, PQ Charlevoix BR obtained UNESCO status in 1988 and is incorporated as a non-profit corporation. Manicouagan-Uapishka Biosphere Reserve, PQ The Manicouagan-Uapishka BR was incorporated in 2007. Southwest Nova Biosphere Reserve, NS The Southwest Nova BR was incorporated as a non-profit association in 2001. Board Composition: Five Municipal Government; Two First Nations, Five Industry; Five Community Seven NGO; Three Academic. Advisors appointed to the Board with representation from Provincial and Federal Government Departments including Parks Canada, Environment Canada and Government of Nova Scotia. Fundy Biosphere Reserve, NB The Fundy BR incorporated as a non-profit corporation in 2007. The Board of Directors is elected from the voting membership. Membership is open and fee based, set by the Board of Directors. Bras d'Or Lake Biosphere Reserve, NS Bras d’Or Lake BR incorporated as a non-profit association in 2008 and is a registered charity. The Board of Directors is nominated through the membership which is open.

6 | P a g e PROJECT OUTCOMES LEGAL STATUS The Beaver Hills Initiative (BHI) was formed in 2002 to address a gap in regional land management as an unincorporated voluntary partnership involving over 30 organizations representing municipal, provincial and federal governments, non-governmental organizations, local academic and research institutions. Since forming, the BHI has had some impressive results, including generating over $1.75M of grant funds from funders across the province and over $3M of in-kind support from over 30 partner organizations. But as an unincorporated organization, the BHI was held back from managing its own finances, instead having that role vested within Strathcona County, the most populous County and the one with the largest amount of land in the Beaver Hills. The Board decided that the time was right for the BHI to become its own stand alone, legal organization: Evolving the BHI Collaboration to NGO Governance. Good governance is key to the growth and sustainability of any non-governmental organization (NGO). An NGO’s sustainability – its ability to serve its partners over the long term – depends largely on the quality of the organization’s governance. Three key components of effective governance are board structure, governing documents, and board functions. The Mission and Vision of the BHI is reflected in the Policies and Procedures developed. However, a review of governance and a transition from a collaboration to a formal structure or corporate body is required, due to partner needs and expectations and especially in the context of the Biosphere Reserve designation. (RFP) There are 18 designated Biosphere Reserves in Canada. For most, the legal status is equivalent to that of an Alberta Society, with three of the Biospheres also having charitable status with Canada Revenue Agency. There are three choices for incorporation for Alberta groups 1) Alberta Society 2) Company under Part 9 of the Companies Act 3) Canada Not for Profit Corporation

1) Alberta Society Key Characteristics . Eligibility requirements o Regulated by the Societies Act, RSA 2000, c S-14 o Incorporated group of five or more persons for any benevolent, philanthropic, charitable, provident, scientific, artistic, literary, social, educational, agricultural, sporting, or other useful purpose, but not for the purpose of carrying on a trade or business (s 3(1)) o Must follow specific naming requirements (s 6) . Name must be distinct. Cannot be identical or similar to current corporation or extra- provincial corporation registered in Alberta . Name must be descriptive, describing what the society does. . Name must contain a legal element, being one of the following: society, association, club, fellowship, guild, foundation, institute, league, committee, council, board, centre, bureau o Submit application with bylaws to the registrar . Bylaws must meet requirements of s 9(4)

7 | P a g e . Ongoing Requirements o Incorporation with Alberta’s Corporate Registry o Must hold annual general meeting to present its financial statement o Must prepare an annual report for the registrar o Must keep a register of its members o Bylaws cannot be rescinded, altered or added except by special resolution of the society, and that rescission or alteration must be registered by the Registrar o The society can alter is objects by special resolution, and get approval by the Registrar o Must have registered office in Alberta Pros . Once incorporated, the members of the society are a corporation and have all the powers, rights and immunities vested by law in a corporation o A society may acquire, purchase, donate, devise or otherwise, all kinds of real estate and personal property, and may sell, exchange, mortgage, lease, let improve and develop it, and may erect and maintain any necessary buildings in accordance with its objects o A society may borrow funds in accordance with its objects

. No member of a society is, in the member’s individual capacity, liable for a debt or liability of the society

. A society is eligible to become a registered charity o Must ensure that company objectives and dissolution provisions meet the ‘charitable’ requirements o Registered Charity under CRA . Organization must be resident in Canada . Must not be established for purpose of making profit . Must have purpose that falls under one of:  The relief of poverty;  The advancement of education;  The advancement of religion; and  Certain other purposes that benefit the community in a way the courts have said is charitable. . Can only gift to qualified donees . Cannot provide any personal benefits or make income payable to members

. A society is eligible to become an Alberta private or public foundation o Alberta Private Foundation . Operates exclusively for charitable purposes . Disburses its assets to qualified donees, which include registered charities . Generally function as repositories and managers of the funds . Controlled by a single donor or family through a board that is made up of a majority of directors at non-arm’s length . Cannot engage in any business activity

o Alberta Public Foundation . Governed by a board that is made up a majority of directors at arm’s length . Can make donations in four ways:  Funds of the foundation

8 | P a g e  Through a designated fund  Through a field of interest fund  Through a donor-advised fund . Cannot engage in any business activity

. Simpler requirements and generally less costly than the other two options

Cons . Shall not have a capital dividend or distribute its property among members during the existence of the society . Interest of a member in a society is not transferable (s 4(2)) . Cannot be engaged in any type of active ongoing business operations (s 3)

2) Company under Part 9 of the Companies Act, RSA 2000, c C-21

Key Characteristics  Eligibility Requirements o A charitable association can register under Part 9 as a limited company if: . It can prove that it is formed for the purpose of promoting art, science, religion, charity or any other useful object . It is the intention of the association to apply the profit or income to promote its objects, and . It will prohibit payment of any dividends to members of the association (s 200) o Requires two or more persons o Name must meet requirements of s 11 o Formation requires: . A memorandum of association and articles of association delivered to Registrar . Payment of fee

 Ongoing Requirements o Subject to the benefits and obligations of the Companies Act o Incorporation with Alberta’s Corporate Registry o Annual general meetings o Keep property accounting records and financial statements o Production of annual financial statements to be presented to members at the annual general meeting. Directors must provide financial statements to shareholder, must provide a statement of profit or loss etc., and the financial statement must be approved by the board of directors, and circulated to shareholders o Must keep minutes of general meetings o Can alter objects by special resolution and filed with the Registrar o Appoint auditors at the annual meeting (not required if not offering securities to the public o Must update information with Registrar through annual return o Report of public accountant o Soliciting corporations, those in receipt of donations of more than $10,000, have additional requirements

9 | P a g e Pros  May be eligible to become a registered charity if the company objectives and dissolution provisions meet the charitable requirements of the CRA  A member’s interest can be transferred and this must be recorded in the books of the company (ss 66(1)(f)) – 67)  The organization can engage in business activities and has powers of a company under s 20

Cons  Restrictions on the number of members or shareholders  Restrictions on number of shares or membership transfers  Restrictions on invitations to the public to subscribe for shares or debentures of the company  Companies Act is more complex than the Societies Act

3) Not for Profit Corporation – Canada Not-for-profit Corporations Act

Key Characteristics  Eligibility Requirements o Incorporation under federal registration through Corporations Canada o One or more individuals or bodies corporate o Sign articles of incorporation and comply with s 8 o Name: set out in English, French or both, and must meet prescribed criteria o One or more directors, meeting the qualifications (S 126)  Ongoing requirements: o Registered office o Corporate records o Annual general meetings o Production of annual financial statements to be presented to members at the annual general meeting o Directors can amend by-laws by ordinary resolution o Fundamental changes requires special resolution (s 197) o Members: . By-laws can set out classes of membership and who can be a member, and whether that allows that person the right to vote . Unless the by-laws otherwise provide, a membership may be transferred only to the corporation . The directors may issue memberships o Financial disclosure . Directors put before members at every annual meeting o Report of public accountant o Soliciting corporations, those in receipt of donations or grants of more than $10,000, have additional requirements: . Must have at least two of whom are not officers or employees of the corporation or its affiliates o Members meetings . Maintain minutes of notice given, attendance at the meeting, and nominating directors

10 | P a g e Pros  Allows bodies without share capital to incorporate for the purposes of carrying on legal activities and to impose obligations on them ie. borrow money, own property, acquire debts,  Rights, powers and privileges of a natural person  Eligible to be a registered charity Cons  more complex requirements than Societies Act or Companies Act

Recommendation 1 – Based on discussions with legislative and legal services in Strathcona County, the recommendation is for a Part 9 Company in order to accurately reflect the role of the municipal members.

11 | P a g e MEMBERSHIP & FUNDING The BHI has the following Membership Policy

Within a Part 9 corporation, membership has implications for both rights and responsibilities. It is critical to determine who should be eligible for voting rights. Voting rights gives those members the full ability to guide the organization through the development and revisions of Articles, policies, determination of Board members and more, depending on the details of the Articles.

12 | P a g e A Part 9 corporation may also want to invite organizations or people that share common values to contribute to the goals of the organization. Those associates may also want to be recognized as part of the organization without the rights and responsibilities of a voting member. BHI’s purpose is largely around regional coordination of land uses which mostly falls within the purview of municipalities. In fact, it has been the municipalities who have largely coordinated the efforts to date and provided the most resources. So, membership should be comprised of the five Counties of Strathcona, Beaver, Lamont, Leduc and Camrose. There is also Federal National Park land (Elk island) and Provincial Park land in the Beaver Hills. However, being a voting (and paying) member in a regional organization can be difficult for organizations with larger areas of focus. Without question, it is vital both are fully involved and participating at the table. Through consultation with representatives of National Parks and Alberta Environment and Parks, it has been agreed that advisor roles on the Board would be more suitable. For other current members, whose perspective is also valuable, may also be invited on then Board as advisors. For National Parks and Alberta Environment and Parks though, it would make sense to have permanent advisor roles on the Board. There is also interest from the current members to see a program for individuals to sign up as ‘friends of Beaver Hills’ or something similar. It can be helpful to raise funds although the primary reason would be to allow people to show their support and affiliation with Beaver Hills Biosphere Reserve. Membership fees can be set as the same for all members or they can be weighted to align with the amount of land within the Beaver Hills.

If the latter, it’s necessary to remove Elk Island in the above land areas percentages in order to determine the weighting of fees

13 | P a g e Therefore, the Counties could pay annual dues based on these percentages. The budget would be set by the members.

If one or more municipalities chose not to be a member, then the percentages would need to re- calculated.

Recommendation 2 – Create a new Membership program to incorporate into the Articles A) Membership in Beaver Hills Biosphere Reserve is available to the five Counties who have land within the Beaver Hills B) Membership fees would be set by the members and ideally based on the percentage of land area of the participating municipalities in the Beaver Hills. C) Elk Island and Alberta Environment and Parks would have permanent seats on the Board, as (non-voting) advisors. D) Other organizations who have an interest and willingness to contribute to the work of the corporation can do so through work as advisors. E) Create a ‘Friends of …” type program for individuals wish to recognize their support of the corporation.

14 | P a g e ORGANIZATIONAL STRUCTURE & DECISION MAKING Structure

The current structure has a 13 member Board of Directors, seven working groups with varying numbers of participants and an Executive Committee comprised of the Board Chair, Executive Director and the Chairs of the seven working groups. The Executive Director, a seconded Strathcona County employee, reports to the Board and there is also a fiscal manager who is an employee of Strathcona County, given Strathcona County’s unique position as custodian for BHI funds.

By and large current members agree that the current structure can be confusing and needs some improvements. Specific concerns include:

- A lack of understanding who is a Board member and who is not - The role of the Executive Committee (redundant with Board meetings) - Unclear decision making processes - Who the Executive Director reports to is confusing. As a seconded employee, the individual reports to the BHI Board for BHI business but ultimately reports to a Manager in Strathcona County. - No term limits for Board members - Do funding municipalities have more of a say on financial matters, or not? - Who owns the budget? - No executive positons other than Chair - Working groups can be too autonomous - Sporadic attendance affects continuity - Not much sharing amongst working groups - Strategic plan should be the foundation of the work - Lack of clarity on roles between Board and working groups - Lack of understanding how consensus works (lack of comfort to block consensus) - Some working group members not represented on the Board Moving to a new structure with clear membership provides an opportunity to update the organizational structure that will help improve governance and operations.

Decision Making While the BHI makes decisions by consensus according to its policies, the reality according to most participating members is that few decisions were being made and the process to arrive at a decision was unclear.

15 | P a g e Consensus decision making can work in many instances, but it requires very clear procedures and processes to work effectively and avoid the pitfalls of ‘groupthink’. Majority voting is better understood and is in line with the parliamentary procedures of member municipalities.

Beaver Hills Biosphere Society - Board of Directors Advisors up to 10 advisors including 2 permanent positions Elk Island AB Parks NGOs Academia Governments Industry Indigenous Public Permanent Permanent Appointed Appointed Appointed Appointed Appointed Appointed Members up to 5 members represented by 5 Director positions Beaver County Strathcona County

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