Item - 2022.TA15.11

The Board of Directors of the Toronto Atmospheric Fund:

1.  Directed the Chief Executive Officer, Toronto Atmospheric Fund to work with City of Toronto staff to amend, or change the Governance Documents, which include the Relationship Framework with the City of Toronto, Toronto Atmospheric Fund (TAF)'s Statement of Investment Objectives and Principles, TAF’s organizational by-laws, particularly By-law No. 1,  and Toronto City Council directives to agencies/boards; based on the following:

a.  The Toronto Atmospheric Fund (TAF) has grown and matured as an organization since it was established in 1991 and since its governance documents were last amended; 
 

b.  With three separate endowment funds from the City of Toronto, the Province of Ontario and the Government of Canada, TAF is now accountable to more stakeholders; 

c.  The geographic mandate of TAF has expanded to the Greater Toronto and Hamilton Area (GTHA); 

d.  TAF generates its own revenues with net zero impact on the City’s budget, and is responsible for and controls its own budget and staff; 
 

e.  TAF currently refers to the following documents, among others, in respect of its relationship with the City of Toronto and its internal procedures (Governance Documents): (a) Relationship Framework (RF) with the City of Toronto, (b) TAF's Statement of Investment Objectives and Principles (SIOP), (c) TAF’s organizational by-laws, particularly By-law No. 1 (By-laws), (d) City of Toronto Council directives to agencies/boards; and (e) the Toronto Atmospheric Fund Act.
 

f.  It is appropriate to review and amend the Governance Documents, and/or their  application to TAF, in light of TAF’s increased capacity, wider accountabilities, expanded geographic mandate, and financial independence.
 

2.  Directed the Chief Executive Officer, Toronto Atmospheric Fund to work with City of Toronto staff to amend, or change the Governance Documents, in accordance with the following goals and principles:

a.  The Governance Documents should clearly delineate those areas of TAF operations over which the City maintains oversight (due to legislative authority or responsibility) and those areas of TAF operations over which TAF has sole authority such that, in particular, the Relationship Framework contains only those provisions that require City direction, approval, consultation and/or accountabilities and the By-laws contain all provisions pertaining to the internal governance and functioning of TAF;

b. The Governance Documents should include background information describing the financial independence of TAF from the City and the limited liability of the City with respect to TAF obligations;

c.  TAF shall have the authority to amend and approve its By-laws, which shall not require City approval so long as the By-laws comply with the Relationship Framework and all relevant legislation;

d.  TAF shall have the authority to set the procedures for, and to call and hold, TAF Board and committee meetings, subject to such City requirements as it is legally required to follow with respect to public meetings in accordance with relevant legislation;

e.  TAF shall have a direct involvement in the recruitment process for directors of TAF's Board, including the Chair of Board, subject to the City’s final appointment, including the right to advise the City of qualified candidates, attend and present questions at interviews, and be consulted in respect of the City's preliminary decisions regarding appointments;

f.  TAF shall have the ability to provide for greater regional perspectives by increasing the representation of citizen members on its Board of Directors by adding individuals residing outside of Toronto but not to exceed a majority of the citizen members;

g.  The Governance Documents shall or may include such further and other revisions as the Chief Executive Officer determines appropriate to recognize TAF’s increased capacity, wider accountabilities, expanded geographic mandate, and financial independence.

3.  Directed the Chief Executive Officer, Toronto Atmospheric Fund to:

a.  Provide the Board Chair with updates on the progress of updating the Governance Documents on a monthly basis; and

b.  Report to the Board with an update on the progress of updating the Governance Documents at its April 27, 2022 meeting with the intention that the Board indicate its agreement with the final versions of the Governance Documents and they are ready for presentation to City Council in June 2022 for approval.

The Senior Corporate Management and Policy Consultant, City Manager's Office gave a presentation on City Manager's Office (CMO) Update on Review of Toronto Atmospheric Fund Governance Documents.

The Board of Directors of the Toronto Atmospheric Fund recessed its public meeting to meet in closed session to consider the item as it pertains to advice that is subject to solicitor-client privilege, including communications necessary for that purpose; information explicitly supplied in confidence to the City or local board by Canada, a province or territory or a Crown agency of any of them; and a plan to be applied to any negotiations carried on or to be carried on by or on behalf of the Board.

TAF and City colleagues have been working to develop a suite of proposed updates to TAF’s Relationship Framework, Operating By-law and Statement of Investment Objectives and Principles (SIOP). The goal of the updates is to better reflect and accommodate TAF’s operations given our significant growth and evolution since the documents were last amended. TAF and City staff will present a status update on the governance review process and seek the Board’s direction on key governance matters under discussion.

In the interim, a request for City Council to update the SIOP to include an “Alternative Investments” asset class was advanced, with TAF providing the City with written assurance that investment activities undertaken by TAF pursuant to that amendment will not introduce any new risk for the City of Toronto until the full governance package is advanced for Council approval.