CIS
BOARD OF TRUSTEES’ GOVERNANCE POLICY

SECTION I.  BOARD PROCESS

Purpose:
	In these policies, the Board identifies for whom it governs and outlines its governance approach and governing style.

1.0 	Responsibility. The Board recognizes its fiduciary duty to each of the three Trusts it administers as more fully described in the 2018 City County Insurance Services Declaration and Agreement of Trust signed by AOC and by LOC in October 2018.   

1.1    Role. The Board’s allegiance in trust, and CIS’ long term business survival, require it to protect and manage CIS’ assets for the benefit of its Members (those local governments that purchase coverage and services through CIS), and to further the interests of the sponsoring associations. On behalf of its Members, the Board   directs the CIS organization in the accomplishment of desired results as expressed in the current strategic plan and operational baselines (Section 4) and the avoidance of unacceptable activities and conditions as expressed in Executive Limitations and Directives Policies (Section 3).

1.2	Linkage to Members.  Cities and counties that have joined LOC and AOC are not compelled to purchase coverage, plans and services from CIS. They judge whether the products and services offered by CIS are cost-effective when compared to other alternatives available in the open marketplace. Competitive market forces influence CIS product selection and pricing. Under Board direction, CIS seeks to attract and retain market share by understanding the dynamics of this marketplace and by producing outputs and generating outcomes that are highly valued by its Members. Trustees are visible and active supporters of more aggressive risk management practices CIS among Members.

1.2A	Member Driven. The Board educates itself regarding the values held by cities and counties in LOC and AOC, paying particular attention to those entities that are CIS Members. The Board acts under the influence of these values and views expressed by Member representatives participating in the CIS Benefits Advisory Committee and the CIS Property/Casualty (P/C) Trust Advisory Committee. Education is facilitated by reviewing industry reports prepared by staff and outside sources; studying responses to member surveys and focus groups; engaging in direct contact with Members, beneficiaries, and stakeholders; and monitoring the demand and utilization of similar products and services in the marketplace.
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1.2A(1) If available, monies are allocated within CIS’ annual operating budget for member surveys, focus groups, opinion analysis and meeting costs associated with ownership linkage and industry awareness.

1.2B	LOC AND AOC Link.  The Board recognizes that CIS collaborates with LOC and AOC to strengthen Oregon’s cities and counties. CIS partners with LOC and AOC on trainings and conferences — as well as support their lobbying efforts. Our boards work together to serve our collective members. All three organizations assist and promote each other in serving sound risk management practices, provide intergovernmental relations support on issues important to CIS and CIS members, and market the products and services of CIS, including but not limited to use of the names and goodwill of LOC and AOC.

1.2B(1) If available, monies are allocated within CIS’ annual operating budget to compensate LOC and AOC for their sponsorship and support. The Board is available to meet with the governing bodies of LOC and AOC at their request.

1.3	Explicit Governing Policies.  The Board directs, controls, and inspires the organization through the careful establishment of these broad written policies reflecting the Board’s values, perspectives, and its strategic plan. The Board may change its strategic plan, operational baselines, or Executive Limitations and Directives Policies at any time, consistent with Board-Executive Director Policy 2.4.

1.3A Strategic Plan. The Board defines what CIS is to accomplish in terms of the Board’s vision, broken down into goals and action items. The strategic plan should be read in concert with these Governance Policies.

1.3B	Means.  The Board delegates accountability for CIS’ performance to the executive director.  How performance will be monitored and controlled is described in Board-Executive Relationship policies (Section 2).

1.3C Limits.  The Board, in Executive Limitations and Directive policies (Section 3), identifies those activities and conditions that it considers unacceptable in a business setting.

1.4	Board Governance Procedures. The Board carries out its job with discipline, emphasizing strategic leadership rather than administrative detail, future orientation rather than past or present focus, outward vision rather than internal or interpersonal preoccupation, policy rather than single events, collective rather than individual decisions and governs pro-actively rather than re-actively.

1.4A	Board Focus. The Board cultivates a sense of group responsibility. The Board works in partnership with the executive director, staff, Members, LOC, AOC, and other key stakeholders. Only those issues that are within the Board’s chosen areas of responsibility consume Board time. That is, the Board works on the Board’s job, not on the job of staff, though the Board may review staff performance against Board policies at any time. The Board acts so that coverage, rates, expenditures, and reserves are where they need to be.

1.4B Board Meetings. Meetings are for the single task of getting the Board’s business done. CIS Members are advised of meeting dates, times, and locations. Meetings are open to Members, except when an executive session is called.

1.4B(1) The Board convenes once a quarter, if needed, and designates the Annual Conference as its Annual Meeting.

1.4B(2) All Board action requires affirmative votes of a majority of the Trustees. Trustees may participate in meetings telephonically or by means of similar off-site communications devices consistent with state law. Six trustees constitute a quorum for Board meetings. 

1.4B(3) Trustees prepare for meetings, are well informed and participate productively in discussion, always within the boundaries of discipline established by the Board.

1.4B(4) The Board is the sole authority over its own meeting agenda. The chairperson exercises this control on behalf of the Board, though any trustee - with a majority agreeing - can add or delete business from the agenda. Agenda and background material are provided to trustees with adequate lead time for preparation.

1.4B(5) Deliberation at Board meetings is fair and open, but also efficient, timely, and orderly. 

1.4C	Chair. The Board elects a chair, vice-chair, and secretary to serve an annual term beginning July 1 each year.  The chair and vice-chair positions alternate annually between appointees of LOC and AOC.

1.4C(1) The chair oversees the integrity and fulfillment of the Board’s process and occasionally represents the Board to outside parties.

1.4C(2) The Board charges the chair with making decisions on issues of Board Process and Board-Executive Relationship, within established policies.

1.4C(3) The chair is authorized to use any reasonable interpretation of the provisions in Board Process and Board-Executive Relationship policies, except where the Board specifically delegates portions of this authority to others.

1.4D Board Members. On taking office, and annually thereafter, trustees sign an “acknowledgment of fiduciary responsibility agreement.” The Board commits itself and its trustees to ethical, business like   and   lawful   conduct, including   proper   use   of   authority   and appropriate decorum when acting as trustees. 

1.4D(1) Because poor governance costs more than learning to govern well, the Board invests in its governance capacity. Trustees participate in educational and training opportunities to ensure continual development in their roles and engage in periodic Board discussion of process improvement and fiduciary duties.

1.4D(1)(a) If available, monies are set aside in CIS’ annual operating budget for trustee training, including attendance at relevant conferences and workshops. Training monies are used liberally to maintain and increase trustee education in the governance process.

1.4D(1)(b) If available, training monies are used liberally to orient new trustees, and candidates for service on the Board, in the Board’s governance process.

1.4D(2) Recognizing that the LOC and AOC appoint the CIS Board of Trustees, the Board may choose to offer suggestions regarding qualifications for appointees and ask that such guidelines be considered in the appointment process.

1                         1.4D(3) Trustees respect the confidentiality appropriate to sensitive issues.

1.4E	Board Committees. The Board structures Board committees to assist with Board tasks.

1.4E(1) Board committees help the Board by preparing policy alternatives and implications for Board consideration. Board committees do not speak or act for the Board except when formally given authority for specific and time-limited purposes. Their authority does not conflict with authority delegated to the executive director.                                                                                                                 

1.4E(2                 1.4E(2) Standing Board Committees include:
Finance Committee
Audit Committee

1.4F	Board Planning Cycle.  To govern in a manner consistent with Board policies, the Board follows an annual agenda that evaluates staff’s progress toward achieving the goals of the strategic plan at least once a year and continually improves Board performance through trustee education and enriched input and deliberation. At meetings, the Board deals with consent agenda items as expeditiously as possible. Staff performance is included on the meeting agenda at the request of a board member or the executive director.

1.4F(1) The Board’s first calendar quarter meeting is held in conjunction with the Annual CIS Conference. Its focus is on securing Board input regarding coverage and benefits plans for the upcoming fiscal year and setting general parameters for the upcoming year’s rates and operating budget.

1.4F(2) The second calendar quarter meeting deals with rate making, administrative planning and budgeting issues   so   that   a   one-year segment of the Board’s most recent statement of long-term goals can be accomplished.

1.4F(3) The third calendar quarter meeting deals primarily with renewals and developing strategies for consultation with Members, which takes place during the balance of the calendar year.

1.4F(4) The fourth calendar quarter meeting, usually in a retreat setting, focuses primarily on the Board’s major oversight responsibilities, trustee education, review of prior fiscal year performance, and planning for new calendar year activities. This meeting is also an opportunity for the Board to assess periodically its bylaws and structure. 

1.4F(5) Outside monitoring assistance is arranged at Board request so the Board can exercise control over organizational performance. This includes but is not limited to financial audits and actuarial studies.

1.4F(5)(a) Monies are allocated in CIS’ annual operating budget for actuarial studies, financial audits and other third-party monitoring of   organizational performance.

SECTION 2.  BOARD-EXECUTIVE DIRECTOR RELATIONSHIP

Purpose
These policies spell out how the Board transfers authority to management. These policies describe the nature of the delegation as well as the way in which the proper use of delegated authority is monitored. Policies do not necessarily describe what is delegated, but rather how delegation occurs. They do not tell the executive director what to do, but rather describe how that position relates to the Board.

2.0   	Relationship. The Board conducts its business through the executive director.

2.1   Delegation. The Board instructs the executive director through written policies, in particular the strategic plan, to prescribe the organizational outcomes to be achieved certain results, for identified recipients, at certain costs - and, in Executive   Limitation   policies   -   describing organizational situations and actions to be avoided. The executive director is then expected to use a reasonable interpretation of these policies.

2.1A.  	Executive Director Authority.  As long as the executive director uses a reasonable interpretation of the Board’s Executive Limitations and Directive Policies, the executive director is authorized to make all decisions, take all actions, establish all practices, and develop all activities.

2.2	Accountability. The executive director is the Board’s link to operational achievement. All authority and accountability of staff, as far as the Board is concerned, is considered the authority and accountability of the executive director. The executive director is accountable to the Board for CIS achieving the Board’s goals as set out in the strategic plan while avoiding transgressions of the Board’s Executive Limitations and fulfilling the Board’s directive policies.

2.3 	Assuring Performance. Monitoring occurs to determine the degree to which Board policies are being met. Systematic and rigorous monitoring of the executive director’s job performance will be against the outputs and outcomes the executive director is charged to deliver and organizational operation within limits established.

2.3A	Method.  Adopted policies will be monitored in one or more of three ways:
Internal Report:  Disclosure of compliance information from the executive director.
External Report: Discovery of compliance information by an external auditor or inspector.
Direct Inspection: Discovery of compliance information by the Board as a whole, or its designated representative.

2.3B	Frequency. Any policy can be monitored by any method at any time the Board chooses. For regular monitoring, however, the Board classifies   each   goal   and   Executive   Limitations or Directive policy according to established frequency and methods:

Monitoring                       	Method                                                          	Frequency
Schedule
Strategic Plan
4.0.  Desired Results		Staff report - participation/retention levels			3rd Quarter 
Staff report – work plan updates				Quarterly
Board - review of governance policies			4th Quarter 
Board - evaluating executive director performance	4th Quarter
Staff Report - “CIS This Week”				Weekly
Staff Report – Quarterly Report to Members		Quarterly
4.1. Coverage			Review by Trust Directors					1st & 2nd Quarter
4.2. Risk Management   		Staff report – work plan reviews				Quarterly
4.3. Fin. Stability         		Review by Auditor and Actuary				4th Quarter
Staff report - operating performance			Quarterly 
Staff report - rates for upcoming policy year		2nd Quarter
4.4 Value to Members    		Staff report –Advisory Committee Meetings		2nd & 4th Quarter
				Annual Member Survey results				1st Quarter

Executive Limitations and Directives
3.0.  Limitations          		Staff Report – “CIS This Week”				Weekly
3.1.  Member Treatment 	Annual Member Survey results				1st Quarter	
Staff report - member eligibility requirements met		3rd Quarter
3.2.  Staff Treatment		Staff report - personnel review with Finance Comm.	2nd Quarter
3.3.  Fin. Planning      		Staff report - Proposed CIS operating budget		3rd Quarter
Staff report - operating budget monitoring		Quarterly
Financial review by auditor				4th Quarter
Staff report - Consultation with AOC/LOC		2nd Quarter
3.4.  Asset Protection 		Report by actuary					4th Quarter
Staff report –financial statements			Quarterly
Staff report - investment of CIS funds			Quarterly
3.5.  Board Support    		Review by Chair and Board members			Quarterly
Staff report - monitoring & decision data			Quarterly

2.4	Effect of Amending Policies. The Board may change its Executive Limitations and Directives policies, thereby shifting the boundary between Board and executive director domains. So long as any particular delegation is in place, the Board is expected to support the executive director’s choices. This does not prevent the Board from obtaining information in the delegated areas.

2.5 	Individual Trustees Relationship with Staff. Only decisions of the Board acting as a body are binding upon the executive director and staff.

2.5A 	Individual Board Member Contact. Decisions or instructions of individual trustees or Board committees are not binding on staff, except in rare instances where the Board gives specific authorization.  Individual trustees may have whatever relationship with the executive director or a staff member that is acceptable to the executive director, except that they can never carry the instructive authority of the Board, nor can they waive requirements set by the Board. If trustees or committee members require information or assistance without Board authorization, the executive director may refuse such requests that require - in the executive director’s judgment - a material amount of staff time or funds, or that are disruptive.

2.6	Evaluating Performance of Executive Director.  Annually, at its 4th Quarter Meeting, the Board formally evaluates the executive director, considering the degree of organizational accomplishment upon strategic plan goals, and organizational compliance with Executive Limitations and Directives policies as primary performance criteria.

SECTION 3.  EXECUTIVE LIMITATIONS AND DIRECTIVES

Purpose
Executive Limitations and Directives reflect assurances the Board needs before it is willing to safely withdraw from most details of operation. While the Board’s adopted Strategic Plan tells the executive director what the Board intends for the organization to achieve, Executive Limitations and Directives tell the executive director and staff what the Board expects to occur and what it will not tolerate.

These limitation and directive policies establish the conditions for pre-approval of any staff decisions or activities that do not violate the policies. In effect, the Board is saying to the executive director, any action you take can be considered Board-approved if it does not violate a directive or limitation.  The executive director is accountable for ensuring that all further decisions and actions constitute reasonable interpretations of the policy limits and directives.  The Board monitors whether the staff respects the boundaries placed on them by these policies.

3.0    Executive Limitations.  The executive director shall not cause nor allow any practice, organizational circumstance, activity, or decision that is either imprudent or in violation of commonly accepted business or professional ethics as they might apply to organizations similar to CIS. The executive director shall not endanger CIS’ public image or credibility, thereby jeopardizing its ability to accomplish its mission.

3.1	Treatment of Participating Members. With respect to interactions with current or prospective Members, the executive director shall not cause or allow conditions, procedures or decisions that are undignified, discourteous or fail to provide appropriate confidentiality or privacy.

3.1A	Member Eligibility. CIS products and services shall not be offered to an entity that does not belong to either LOC or AOC and satisfies all requirements in the Trust Agreement.

3.2    Treatment of Staff.  With respect to treatment of staff, the executive director may not cause or allow conditions that are unlawful, unfair, or undignified. 

3.2A	Compensation and Benefits. With respect to employment, compensation, and benefits to employees, consultants, contract workers and volunteers, the executive director shall not cause or allow jeopardy to fiscal integrity or public image.

3.2A(1) The number of full-time equivalent positions, total staff compensation, and benefits shall not exceed those authorized by the Board during the annual budget setting process. Salaries and benefits will not deviate materially from that offered for similar positions in comparable public or private sector market settings.

3.2A(2) The executive director shall maintain and operate with written personnel policies that clarify personnel rules for staff; provide for effective handling of grievances; and protect against unlawful or wrongful conditions.

3.2A(3) The executive director shall maintain an up-to-date management staff development program and current succession plan.

3.3   	Financial Planning & Budgeting.  Fiscal year planning shall not deviate materially from the Board’s policies.

3.3A	CIS administrative costs will be in line with those of its competitors and other pools that offer similar programs.

3.3B	Actual Expenditures. With respect to the actual ongoing financial conditions and activities, the executive director shall not cause or allow a material deviation of actual expenditures from the Board-approved operating budget.

3.3B(1) Funds shall be received, processed, and disbursed under controls that are sufficient under applicable generally accepted accounting principles.

3.3C	Financial Audit. Financial record keeping for any fiscal year shall not be complete until an independent auditor selected by the Board and reporting to an Audit Committee appointed by the Board, has conducted an annual audit of funds received, invested, kept, and disbursed by CIS.

3.3D	Commingling of Funds. Funds for each separate Trust may not be commingled without assurances that they can be accounted for and used exclusively for the benefits of Members in each separate Trust.

3.3E	Consultation with Local Government Associations. The executive director shall not present the annual operating budget and work plan for CIS without first consulting LOC and AOC regarding their assessment of CIS-related services required by their respective members.

3.4   Asset Protection. The executive director shall not allow CIS assets, including reserves, to be unprotected, inadequately maintained, inappropriately used or put at undue risk.

3.4A	The assessment of actuarial soundness of CIS Trust reserves shall not be complete until an independent qualified actuary has advised on the sufficiency of reserves. Such evaluation will be conducted as frequently as is required for prudent management by an independent actuary selected by and reporting to the Board.

3.4.	Investments. The executive director shall not allow investments to be made in violation of legal regulations or the Board’s adopted investment policy.

3.4C	Insurance. The executive director shall not intentionally expose CIS, the Board or staff to claims of liability.  Rather, the executive director shall seek to minimize liability to CIS, the Board and staff while maintaining an efficient organization.

3.4C(1) The executive director shall secure coverage against theft and casualty losses and against liability losses to Board members, staff, and each of the Trusts, in amounts that are reasonable for similar organizations of like size.

3.4C(2) The executive director shall protect CIS’ intellectual property, information and files from loss, significant damage or misuse.

3.5	Communication and Support to the Board. The executive director shall keep the Board to be informed and support the Board in its work.

3.5A	Monitoring Data. The executive director shall submit monitoring data required by the Board, in a timely, accurate and understandable fashion, directly addressing provisions of Board policies being monitored. The executive director shall keep the Board aware of relevant trends, anticipated adverse media coverage and material external and internal changes, with particular emphasis on changes in the assumptions upon which any Board policy has previously been established.

3.5B	Decision Data.  The executive director shall assemble for the Board as many staff and external points of view, opinions and options as needed for fully   informed Board choices. Information should be direct and succinct, not unnecessarily complex or lengthy. The executive director shall supply for the consent agenda all items delegated to the executive director yet required by law or contract to be Board-approved, along with related monitoring assurance.

3.5C	Other Data. The executive director shall advise the Board if, in the executive director’s opinion, the Board is out of compliance with its own policies on Board Process and Board-Executive Director Relationship.  This is appropriate in the case of Board behavior that is detrimental to the working relationship between the Board and the executive director.

SECTION 4. STRATEGIC PLAN and OPERATIONAL BASELINES 

Every five years the Board and staff collaborate to produce a strategic plan that provides the staff with the Board’s vision, desired outcomes, and goals. Every strategic plan should maintain the operational baselines set forth below, unless and until amended by the Board.

The strategic plan is the Board’s road map to the executive director and staff.  It should be an active document that is frequently consulted and worked from, with progress and challenges reported to the board at each meeting. Staff reports and initiatives should be prepared with the vision and goals of the strategic plan in mind.  Board members should likewise evaluate proposals and conduct board business with a focus on furthering the strategic plan.

The following operational baselines operate as a governing foundation, upon which the Strategic Plan and staff initiatives to further the Plan are built.

4.1     Coverage/Plans. CIS demonstrates its focus on members through tailored coverages and services.  CIS was created by members for members —it’s their needs that come first. We’re responsive to changes in the world of insurance and risk management so our services and coverages stay aligned with our members’ needs.

4.1A	CIS aggregates the collective buying power of Members and utilizes the economic advantages of individual and pooled risk retention, to provide joint self-insured risk retention pools for property and casualty coverage which reflects lower overall costs than commercial insurance products.

4.1A(1) Members are charged rates appropriate to their exposures and loss experience.

4.1B	CIS aggregates the collective buying power of Members to secure employee   benefits plan options that respond to Member needs, provided through joint self-insured risk retention pools or group purchase programs negotiated with carriers. The employee benefits Trusts administered by CIS offer a choice of plan options for health and welfare benefits:  medical, dental, vision, life, long term disability and related services.  These options are offered to local government employers, their employees, and dependents, at rates that seek to stabilize the cost of funding these programs for Members.

4.2    	Risk Management. CIS promotes innovative and proactive risk management    We’re forward-thinking in providing the resources and services members need.  By working together, we manage risk, protect public resources, support public safety, and improve health and wellness. By monitoring risk factors, we keep ahead of trends —this is how we develop our programs, services, and plan designs.  We focus on assessment and prevention, yet we’re flexible in assessing options to best serve our members.

4.2A	Services. CIS makes available effective loss prevention and loss control programs, claims management and consulting, data gathering, information sharing, education, training and related risk management services.

4.2A(1) CIS’ risk management efforts will utilize claims experience data from CIS Members and other risk pools to shore up areas of concern and stay ahead of trends.  

4.2A(2) Using individualized risk management plans, CIS staff will help Members prioritize where risk management efforts are likely to be most effective in reducing their cost of risk. 

4.3.    	Financial Security and Strength of CIS. CIS’ financial security and strength is highly valued by its Members.  We’re good stewards of public dollars. We always seek to maintain and enhance our fiscal strength. We have effective policies for fiscal decision making. We continually evaluate the merits of programs we provide. We’re transparent in reporting and managing our financial information.

4.3A 	Joint Self-insured Pools. CIS joint self-insured pools are financed through the use of actuarially sound contribution schedules at appropriate retention levels. Each year’s contributions are expected to cover that year’s losses and expenses and allow an adequate level of surplus to be retained. The Board establishes a Member Equity Policy to define target levels of surplus and its usage.

4.3B	Group Purchase. CIS’ group purchase programs are underwritten by the carrier or insurer. Surplus amounts generated by group purchase programs may be used, subject to Board approval, as a subsidy to write down group rates proposed by carriers in order to provide pricing stability to Members. 

4.3C	Reporting. The CIS Board and Members will receive regular reports on key benchmarks that reflect the status of CIS operations.

4.3D	Through a combination of adequate pricing and effective risk management, CIS loss ratios will continue to meet funding target levels approved by the Board. 

4.4	Highly Valued. CIS is unique in its tailored coverages, services, and programs to support local government. We have a long history of dedicated, trustworthy service to our members that is the foundation of our organization. We are proactive in engaging members by sharing our story and living our mission, vision, and values.

4.4A	Cooperative Efforts. CIS works together with those who have common interests when these efforts have the potential to produce benefits for CIS Members. CIS acts as a catalyst for change and innovation helping Members to better finance and manage their risks. CIS is a leader in working with other programs and affiliates of the local government associations on issues of joint interest.

4.4B	Membership Services.  CIS acknowledges the importance of membership services and partners with LOC and AOC to improve and expand services to local governments in ways that help Oregon’s cities and counties be safer, stronger, and healthier.

4.4C 	Local Agents. The Board acknowledges the potential for risk management assistance to be provided by local insurance agents and the value of such assistance to Members and to CIS. CIS has no direct agency relationship with local agents, allowing that relationship to be negotiated in each local community. Fee-for-service compensation is handled at the Member entity level. If it is the preference of the entity and the agent, CIS accommodates the collection of a commission-like payment and forwards that payment on to the agent.

4.4D 	Diversity of Membership. The Board recognizes the geographic and size diversity of local governments and designs and actively markets innovative and competitive products and services appropriate for the wide range of needs and interests of the Members. CIS exercises the necessary judgment to find the appropriate balance between being responsive to the needs of prospective members, and individual Members, while protecting the basic integrity of its core programs for current Members.

4.4F 	Service Approach. CIS trustees and staff recognize they are customers of, and service providers to, others with an interest in CIS. As such, CIS representatives communicate and treat people with respect and courtesy while consciously adding value to CIS’ relationships with Members, LOC and AOC, suppliers, citizens, local agents and other stakeholders.

4.4G	Personal   Responsibility.  Representatives of CIS accept personal responsibility and accountability for their own actions as they strive to create opportunities, remove barriers, and ensure that CIS is highly valued by its Members.

4.4H 	Legislative Involvement. CIS acts as an information resource to Members and to LOC and AOC in presenting data related to the cost of public body risk in Oregon to appropriate legislative bodies and committees.

Policy Gov/ gov policy revision January 2021