MINUTES

Kansas Bioscience Authority
Joint Meeting of the
Governance Committee and Nominating Committee

Friday, October 9, 2009
11-11:30 a.m.CT

Call to Order: A quorum being present, the meeting was called to order at 11:04 a.m. by Governance Committee Chairperson Bill Sanford and Nominating Committee Chairman Dan Glickman. Attending by phone were Reggie Robinson, Ray Smilor, David Franz and Bill Thornton. Others attending were Tom Thornton, Jan Katterhenry and Marsh LoScalzo of the KBA staff. Jeff Ellis, corporate counsel, was in attendance.

Chairman Sanford explained that the purpose of the meeting was to combine the Nominating Committee and Governance Committee into one committee. Mr. Tom Thornton gave background information, noting that the functions of the committees overlap. To merge the two, action is required by both committees. First, the bylaws and committee charters must be changed, and then the action must be taken to the full board for consideration. There is high interest in doing this due to the relatively small size of the board, and the move is intended to increase board efficiency.

Mr. Sanford commented that, in the legislation that created the Kansas Bioscience Authority, the Nominating Committee was a mandated committee. The proposed name of the combined committees will be the Nominating and Governance Committee, which is consistent with a number of public and private boards.

Review and Approval of Minutes: Mr. Sanford addressed the minutes of the May 19, 2009, meeting of the Governance Committee and asked whether there were any changes. Hearing none, Dr. Robinson moved to adopt the Governance minutes; Mr. Glickman seconded the motion. Dr. Smilor was not officially at the meetings and did not vote. The motion passed.

Mr. Sanford asked Mr. Glickman to call for a vote to adopt the minutes of the June 25, 2009, Nominating Committee. Mr. Glickman moved to adopt the minutes, and Dr. Smilor seconded. The motion passed.

Resolution and Recommendation to the Board to Amend the KBA Bylaws: Mr. Sanford directed the committees to Tab 3 of the committee binder to review the resolution and recommendation to the board to amend the KBA bylaws to combine the Nominating Committee into the Nominating and Governance Committee. Mr. Sanford asked if there were any questions. Chairmen Sanford and Glickman were in full support of the recommendation.

Dr. Smilor inquired how the new committee would be structured. Mr. Sanford responded that the chairman of the board would handle the committee assignments. Mr. Tom Thornton noted that the proposed committee would consist of Mr. Sanford, chairman; Mr. Glickman, vice chairman; and membership likely comprised largely of the two merged committees.

Mr. Ellis noted it was appropriate to combine the committees. The action will allow the Audit Committee to focus on financial compliance and the Nominating and Governance Committee to focus on legal compliance. The charters and bylaw provisions will be coordinated to make that distinction. According to statute, this is acceptable and maintains the requirement for a nominating committee.

Resolution and Recommendation to the Board to Amend the Charter: Mr. Sanford directed the committees to Tab 4 of the committee binder to review the list of functions for which the merged committee shall be responsible. Those functions include the following: maintaining governance processes that enable the authority to achieve its mission; reviewing with the CEO matters relating to management succession; reviewing bylaws periodically; providing continuing education for directors; conducting self-assessment programs for directors; recommending people for board positions to be filled; and providing a slate of officers to the board at its annual meeting.

Dr. Robinson inquired about the language in the charter dealing with tied votes: “The Chairperson of the Board will cast the deciding vote to break any deadlocked vote of the Committee.” Mr. Ellis clarified that the committee chairman would normally break a tied vote, not the board chairman. If there was a situation with a tied vote at the committee level, it would need to be recommended to the board for consideration; therefore, the sentence in question was irrelevant and should be stricken from the charter.

Dr. Smilor commented that in the May 19th minutes there was a recommendation to begin some of these committee functions. He asked Mr. Ellis for a status report.

Mr. Ellis responded that he had advanced an aspiration for the board to consider a more definitive corporate compliance approach to governance risk management and compliance (GRC). The Nominating and Governance Committee would be responsible for this. Mr. Ellis said the organization had reached a level of maturity that allows it to be more definitive in light of public responsibilities, transparency, and accountability demanded of the authority due to its status. The organization has a done great job in terms of conflicts issues, board education, and training, he said. The compliance program would be expanded to the staff and incorporated into dealings with vendors and grantees. Mr. Ellis suggested the next step for this committee should be to begin the process of integrating policies and procedures into a GRC program.

Mr. Sanford stated that, for the first meeting of the Nominating and Governance Committee in November, this would be an agenda item. Mr. Sanford suggested this would be a time to assign duties and responsibilities to relevant committees, because the Nominating and Governance Committee will not have exclusive responsibility for compliance.

Dr. Franz inquired about the function of developing a slate of officers for director positions. Mr. Sanford noted that the function will be fulfilled only when there is a vacancy or when a director is due to reach the end of his term. He said Mr. McKechnie and Mr. Glickman’s terms will expire in March 2010, so the committee will advance two or three candidates for those positions.

Mr. Tom Thornton added that language under Tab 3 will require Mr. Ellis to do a universal change to the bylaws because the words “nominating committee” appear throughout the entire document.

Mr. Sanford called for a motion to recommend that 1) the board combine the two committees into one committee named the Nominating and Governance Committee and 2) authorize the appropriate changes to the bylaws. Dr. Smilor moved to recommend this to the board; Mr. Glickman seconded. The motion passed unanimously.

The next meeting of the joint committees will be at noon on November 9th before the board meeting.

Mr. Sanford referred the committee to Tab 9 in the committee binder to review the FY 2010 meeting schedule.

There was no topic for an executive session.

Mr. Tom Thornton referred the committees to the responsibility matrix in the handbooks, which effectively outlines at the beginning of each year the duties and responsibilities of each committee.

The Nominating Committee will meet November 9th to develop recommendations for the director terms that will expire in March.

The committees complimented the KBA staff on the professional work done to create the committee handbooks.

Mr. Sanford asked for a motion to adjourn the meeting. Mr. Glickman moved; Dr. Smilor seconded. The motion passed, and the meeting adjourned at 11:31 a.m.