1. CALL TO ORDER/ROLL CALL John Zoglin, Chair 4:00 4:01. John Zoglin, Chair 4:01 4:02 2. POTENTIAL CONFLICT OF INTEREST DISCLOSURES

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1 AGENDA Special Meeting of Investment Committee El Camino Hospital Board Thursday, May 28, 2015, 4:00 p.m. Conference Room E, Ground Floor 2500 Grant Road, Mountain View, California MISSION: The purpose of the Investment Committee is to develop and recommend to the El Camino Hospital Board of Directors the organization's investment policies, maintain current knowledge of the management and investment of the invested funds of the hospital and its pension plan(s), provide guidance to management in its investment management role, and provide oversight of the allocation of the investment assets. AGENDA ITEM PRESENTED BY 1. CALL TO ORDER/ROLL CALL John Zoglin, Chair 4:00 4:01 2. POTENTIAL CONFLICT OF INTEREST DISCLOSURES John Zoglin, Chair 4:01 4:02 3. PUBLIC COMMUNICATION John Zoglin, Chair 4:02 4:03 4. DRAFT REVISED INVESTMENT COMMITTEE CHARTER ATTACHMENT 4 John Zoglin, Chair public comment Possible Motion for recommendation 4:03 4:08 5. PROPOSED FY 2016 COMMITTEE GOALS ATTACHMENT 5 John Zoglin, Chair public comment Possible Motion for recommendation 4:08 4:18 6. ADJOURN TO CLOSED SESSION 4:23 7. Report involving Gov t Code Section and for discussion and report on personnel matters. - Recruiting New Committee Member John Zoglin, Chair Discussion 4:18 4:28 8. RECONVENE OPEN SESSION 4:28 To report any required disclosures regarding John Zoglin, Chair permissible actions taken during Closed Session. 9. RECRUITING NEW COMMITTEE MEMBER John Zoglin, Chair public comment Possible Motion for Recommendation 4:28 4: ADJOURNMENT John Zoglin, Chair 4:30 p.m. FY 2016 Investment Committee Meetings August 10, 2015 November 9, 2015 February 8, 2016 May 9, 2016 A copy of the agenda for the Special Committee Meeting will be posted and distributed at least twenty-four (24) hours prior to the meeting. In observance of the Americans with Disabilities Act, please notify us at prior to the meeting so that we may provide the agenda in alternative formats or make disability-related modifications and accommodations.

2 Separator Page 4. Committee Charter.pdf

3 DATE: El Camino Hospital Investment Committee May 28, 2015 TO: FROM: SUBJECT: ACTION: Investment Committee Members Cindy Murphy, Board Liaison Draft Revised Investment Committee Charter Possible Motion: To recommend that the Board approve the Draft Revised Investment Committee Charter (Or Alternative A). A. Summary: Committee Chair Zoglin has suggested that the Committee consider recommending that its Charter be revised to increase the number of allowable external (Non-Director) members from three to four. B. Considerations: While the other Board Advisory Committee Charters do limit the number of external (Non- Director) members, the Investment Committee is the only Board Committee that currently limits the total number of members. Legal counsel has confirmed that there is no legal barrier to increasing the number. The Charter may have been drafted this way because at one time the Investment Committee was a sub-committee of the Finance Committee. I have provided two alternative drafts for the Committee s consideration: one that maintains that restriction, but increases the total allowable number of members to six, and Alternative A that removes the restriction and tracks the language of the other Charters. Both alternatives provide for a maximum of four external (Non-Director) members. C. Staff Recommendation: To recommend that the Board approve Draft Revised Investment Committee Charter Alternative A. D. Attachments: 1. Draft Revised Investment Committee Charter (Redlines) 2. Draft Revised Investment Committee Charter Alternative A (Redlines) Updated 0/2/28/13 1

4 Separator Page 4.1. Draft REVISED Investment Committee Charter docx

5 Purpose Investment Committee Charter Draft Revised The purpose of the Investment Committee is to develop and recommend to the El Camino Hospital (ECH) Board of Directors ( Board ) the organization s investment policies, maintain current knowledge of the management and investment of the invested funds of the hospital and its pension plan(s), provide guidance to management in its investment management role, and provide oversight of the allocation of the investment assets. Authority All governing authority for ECH resides with the Hospital Board except that which may be lawfully delegated to a specific Board committee or subcommittee. All of the recommendations of the Committee flow to the El Camino Hospital Board for action. Reports of the Committee will be provided to the subsequently scheduled Board meeting. The Committee has the authority to recommend one or more investment managers for the hospital, monitor the performance of such investment managers, and monitor adherence to the investment policies of the hospital. Voting members of the Committee shall include the directors assigned to the Committee and external (non-director) members appointed to the Committee. The Committee, by resolution, may adopt a temporary advisory committee (ad hoc) of less than a quorum of the members of the Committee. The resolution shall state the total number of members, the number of board members to be appointed, and the specific task or assignment to be considered by the advisory committee. Membership The Investment Committee shall be comprised of no more than sixfive (56) members, at least 2 of whom shall be Hospital Board members. The Chair of the Committee shall be appointed by the Board Chair, subject to approval by the Board. All members of the Committee shall be eligible to serve as Chair of the Committee. The Committee may also include 2-43 external (non-director) members with expertise in areas such as finance, banking, and investment management. All Committee members shall be appointed by the Board Chair, subject to approval by the Board, for a term of one year expiring on June 30th each year, renewable annually. Page 1 of 3

6 It shall be within the discretion of the Chair of the Committee to appoint a Vice-Chair from among the members of the Committee. If the Chair of the Committee is not a Hospital Board member, the Vice-Chair must be a Hospital Board member. All members of the Committee must be independent with no conflict of interest regarding hospital investments. Should there be a potential conflict, the determination regarding independence shall follow the criteria approved by the Board. Staff Support and Participation The CFO shall serve as the primary staff support to the Committee and is responsible for drafting the Committee meeting agenda for the Committee Chair s consideration. Additional members of the management team may participate in the Committee meetings as deemed necessary. General Responsibilities The Committee s primary role is to provide oversight and to advise the management team and the Board on matters pertaining to this Committee. With input from the Committee, the management team shall work with its investment advisor(s) to develop dashboard metrics that will be used to measure and track investment performance for the Committee s review and subsequent approval by the Board. It is the management team s responsibility to develop and provide the Committee with reports, plans, assessments, and other pertinent materials to inform, educate, and update the Committee, thereby allowing Committee members to engage in meaningful, data-driven discussions. The Committee is responsible for ensuring that performance metrics are being met to the Board s expectations and that the Board is apprised of any deviations therefrom. Specific Duties The specific duties of the Investment Committee include the following: A. Investment Review and recommend for approval by the Board the investment policies for corporate assets and Cash Balance Plan assets. Review and make recommendations to the Board regarding the selection of an independent investment advisor. The Board will appoint the investment advisor, and management, in consultation with the Committee, will appoint the investment managers. Monitor the performance of the investment managers through reports from the independent investment advisor, and make recommendations for change when appropriate. Monitor investment allocations and make recommendations to the Board if assets are managed inconsistently with approved investment policies. Page 2 of 3

7 Monitor the financial stability and safety of the institutions which have custody of the Hospital s assets, and make recommendations for change when appropriate. Monitor the investment performance of the specific investment vehicles made available to employees through their 403(b) Retirement Plan. Review recommendations from the Retirement Plan Administrative Committee (RPAC) regarding the selection of an independent investment advisor for the employees 403(b) Retirement Plan and make recommendations to the Board. The Board will appoint the investment advisor, and the RPAC will monitor, select, and replace the Core investment choices. B. Ongoing Education Endorse and encourage Investment Committee education and dialog relative to the work of the Committee. Committee Effectiveness The Committee is responsible for establishing its annual goals, objectives and work plan in alignment with the Board and Hospital s strategic goals. The Committee shall be focused on continuous improvement with regard to its processes, procedures, materials, and meetings, and other functions to enhance its contribution to the full Board. Meetings and Minutes The Committee shall meet at least once per quarter. The Committee Chair, in collaboration with hospital management, shall determine the frequency of meetings based on the Committee s annual goals and work plan, and the operating needs of the organization. Minutes shall be kept by the assigned staff and shall be delivered to all members of the Committee. Minutes may be approved via by unanimous consent of those attending the meeting, or by majority vote at regular meetings, as determined by the Committee Chair. The approved minutes shall be forwarded to the Board for review and approval. Meetings and actions of all advisory committees of the Board shall be governed by, and held and taken in accordance with, the provisions of Article VI of the Bylaws, concerning meetings and actions of directors. Special meetings of committees may also be called by resolution of the Board or by the Committee Chair. Notice of special meetings of advisory committees shall also be given to any and all alternate members, who shall have the right to attend all meetings of the Committee. Notice of any special meetings of the Committee requires a 24 hour notice. Approved as Revised: November 12, 2014 Page 3 of 3

8 Separator Page 4.2. Draft REVISED Investment Committee Charter Alternative A.docx

9 Purpose Investment Committee Charter DRAFT REVISED (Alternative A) The purpose of the Investment Committee is to develop and recommend to the El Camino Hospital (ECH) Board of Directors ( Board ) the organization s investment policies, maintain current knowledge of the management and investment of the invested funds of the hospital and its pension plan(s), provide guidance to management in its investment management role, and provide oversight of the allocation of the investment assets. Authority All governing authority for ECH resides with the Hospital Board except that which may be lawfully delegated to a specific Board committee or subcommittee. All of the recommendations of the Committee flow to the El Camino Hospital Board for action. Reports of the Committee will be provided to the subsequently scheduled Board meeting. The Committee has the authority to recommend one or more investment managers for the hospital, monitor the performance of such investment managers, and monitor adherence to the investment policies of the hospital. Voting members of the Committee shall include the directors assigned to the Committee and external (non-director) members appointed to the Committee. The Committee, by resolution, may adopt a temporary advisory committee (ad hoc) of less than a quorum of the members of the Committee. The resolution shall state the total number of members, the number of board members to be appointed, and the specific task or assignment to be considered by the advisory committee. Membership The Investment Committee shall be comprised of no more than five (5) members, at least 2 of whom shall be Hospital Board members. The Chair of the Committee shall be appointed by the Board Chair, subject to approval by the Board. All members of the Committee shall be eligible to serve as Chair of the Committee. The Committee may also include 2-43 external (non-director) members with expertise in areas such as finance, banking, and investment management. All Committee members shall be appointed by the Board Chair, subject to approval by the Board, for a term of one year expiring on June 30th each year, renewable annually. Page 1 of 3

10 It shall be within the discretion of the Chair of the Committee to appoint a Vice-Chair from among the members of the Committee. If the Chair of the Committee is not a Hospital Board member, the Vice-Chair must be a Hospital Board member. All members of the Committee must be independent with no conflict of interest regarding hospital investments. Should there be a potential conflict, the determination regarding independence shall follow the criteria approved by the Board. Staff Support and Participation The CFO shall serve as the primary staff support to the Committee and is responsible for drafting the Committee meeting agenda for the Committee Chair s consideration. Additional members of the management team may participate in the Committee meetings as deemed necessary. General Responsibilities The Committee s primary role is to provide oversight and to advise the management team and the Board on matters pertaining to this Committee. With input from the Committee, the management team shall work with its investment advisor(s) to develop dashboard metrics that will be used to measure and track investment performance for the Committee s review and subsequent approval by the Board. It is the management team s responsibility to develop and provide the Committee with reports, plans, assessments, and other pertinent materials to inform, educate, and update the Committee, thereby allowing Committee members to engage in meaningful, data-driven discussions. The Committee is responsible for ensuring that performance metrics are being met to the Board s expectations and that the Board is apprised of any deviations therefrom. Specific Duties The specific duties of the Investment Committee include the following: A. Investment Review and recommend for approval by the Board the investment policies for corporate assets and Cash Balance Plan assets. Review and make recommendations to the Board regarding the selection of an independent investment advisor. The Board will appoint the investment advisor, and management, in consultation with the Committee, will appoint the investment managers. Monitor the performance of the investment managers through reports from the independent investment advisor, and make recommendations for change when appropriate. Monitor investment allocations and make recommendations to the Board if assets are managed inconsistently with approved investment policies. Page 2 of 3

11 Monitor the financial stability and safety of the institutions which have custody of the Hospital s assets, and make recommendations for change when appropriate. Monitor the investment performance of the specific investment vehicles made available to employees through their 403(b) Retirement Plan. Review recommendations from the Retirement Plan Administrative Committee (RPAC) regarding the selection of an independent investment advisor for the employees 403(b) Retirement Plan and make recommendations to the Board. The Board will appoint the investment advisor, and the RPAC will monitor, select, and replace the Core investment choices. B. Ongoing Education Endorse and encourage Investment Committee education and dialog relative to the work of the Committee. Committee Effectiveness The Committee is responsible for establishing its annual goals, objectives and work plan in alignment with the Board and Hospital s strategic goals. The Committee shall be focused on continuous improvement with regard to its processes, procedures, materials, and meetings, and other functions to enhance its contribution to the full Board. Meetings and Minutes The Committee shall meet at least once per quarter. The Committee Chair, in collaboration with hospital management, shall determine the frequency of meetings based on the Committee s annual goals and work plan, and the operating needs of the organization. Minutes shall be kept by the assigned staff and shall be delivered to all members of the Committee. Minutes may be approved via by unanimous consent of those attending the meeting, or by majority vote at regular meetings, as determined by the Committee Chair. The approved minutes shall be forwarded to the Board for review and approval. Meetings and actions of all advisory committees of the Board shall be governed by, and held and taken in accordance with, the provisions of Article VI of the Bylaws, concerning meetings and actions of directors. Special meetings of committees may also be called by resolution of the Board or by the Committee Chair. Notice of special meetings of advisory committees shall also be given to any and all alternate members, who shall have the right to attend all meetings of the Committee. Notice of any special meetings of the Committee requires a 24 hour notice. Approved as Revised: November 12, 2014 Page 3 of 3

12 Separator Page 5. IC Goals- FY16.docx

13 INVESTMENT COMMITTEE Goals for FY Draft Purpose The purpose of the Investment Committee is to develop and recommend to El Camino Hospital Board of Director the investment policies governing the Hospital s assets, maintain current knowledge of the management and investment of the invested funds of the Hospital, and provide oversight of the allocation of the investment assets. Staff: Iftikhar Hussain, CFO The CFO shall serve as the primary staff support to the Committee and is responsible for drafting the Committee meeting agenda for the Committee Chair s consideration. Additional members of the hospital staff may participate in the Committee meetings upon the recommendation of the CFO and subsequent approval from the Committee Chair. The CEO is an ex-officio member of this Committee. Timeline by Fiscal Year (Timeframe applies to when the Board approves the Goals Metrics recommended action from the Committee, if 1. Review performance of consultant recommendations of managers and asset allocations 2. Review current investment strategy of using active managers vs. passive allocation applicable) Each quarter Ongoing Investment Committee to review selection of money managers; recommendations are made to CFO Q2 Recommend to the Board by Decemeber Educate Board and Committee use of Q1 To be completed by September 2015 managers with greater focus on Environment, Social and Governance 4. Review/revise Executive Dashboard Each quarter - Ongoing To be completed by June 2016 Submitted by: Iftikhar Hussain, Executive Sponsor, Investment Committee Approved by the Board on June 11, 2014