December 9, 1998
To:Economic Development Committee
From:Chief Administrative Officer
Commissioner of Economic Development, Culture and Tourism
Subject:Board Composition for Toronto Economic Development Corporation (TEDCO)
Purpose:
This report responds to a request by the Economic Development Committee for a status report
on the review of the governance structure of TEDCO and recommends a process for filling the
3 vacancies on an interim basis.
Funding Sources, Financial Implications and Impact Statement:
There are no financial implications.
Recommendations:
It is recommended that:
(1)Council confirm the attached amendments to TEDCO's By-Law No. 1 and By-Law No. 3
as passed by the Board of Directors on April 14, 1998 to set the term of Council Members on
the Board of Directors at 18 months as requested by the Council of the City of Toronto;
(2)the study of the role, mandate and composition of TEDCO's governance structure
currently being undertaken through the Task Force on ABCs by the Chief Administrative
Officer be coordinated with the study requested by the Economic Development Committee on
TEDCO's future and potential future role in the City of Toronto's economic development
strategy;
(3)in the interim, the seven incumbent board members continue to serve on the board and the
three vacancies be filled by Councillor Brian Ashton as Chair of the Economic Development
Committee and two citizens nominated by the Mayor;
(4)once these appointments have been made, the Board of Directors elect a Chair from among
its voting members and the President of TEDCO would be a Director ex officio; and
(5)the appropriate officials be authorized to take the necessary steps to give effect thereto.
Council Reference/Background/History:
At its meeting of March 4, 5, and 6, 1998, Council approved a recommendation contained in
Clause 8 of Report No.3 of the Special Committee to Review the Final Report of the Toronto
Transition Team that the Task Force on Agencies, Boards and Commissions undertake a study
of the future role, mandate and composition of TEDCO and subsequently report to Council
through the appropriate Standing Committee. The Economic Development Committee was
subsequently established and would be the appropriate standing committee in this case.
The Workplan for the Task Force on ABCs includes this study among its top seven priorities.
The Economic Development Committee at its meeting on November 16, 1998 requested that
the Commissioner of Economic Development, Culture and Tourism conduct "an analysis of
TEDCO's future and potential future role in the City of Toronto's economic development and
strategy" and requested that:
"the Chief Administrative Officer, in consultation with the Commissioner of Economic
Development, Culture and Tourism report to the next meeting of the Economic Development
Committee on the status of the review of TEDCO's Board of Directors and on the issue of the
new Board's composition".
This report responds to the latter request.
Comments and/or Discussion and/or Justification:
TEDCO is a corporation under the Ontario Business Corporations Act and the City of Toronto
is the sole shareholder. As the shareholder, the City appoints the Board of Directors and
approves its by-laws. TEDCO's By-Laws permit flexibility in the size of the Board and do not
specify the precise composition of that membership. However, the former City of Toronto's
most recent policy set the size of the board at ten members including three Councillors, the
President of TEDCO, and six citizens. The citizens were nominated through a variety of
methods.
TEDCO's By-Law Amendments:
There are currently seven active members on the Board of Directors including two City
Councillors who were appointed by Council in January 1998. Although Council's policy was
to appoint Council members for a term of 18 months, TEDCO's by-laws required a three year
term for all directors. Council requested that TEDCO's by-law be changed to permit
Councillors to be appointed for 18 months. At its meeting of April 14, 1998, the Board of
Directors of TEDCO passed a revision to the by-laws to comply with this request. This by-law
amendment must be confirmed by City Council. It is recommended that Council confirm the
amendment as attached to this report.
Review of Governance Structure:
The review of TEDCO's mandate and governance structure is being undertaken by the CAO
on behalf of the Task Force on ABCs. To date, basic information on the TEDCO's operation,
budget, by-laws and structure has been gathered and is being reviewed. In addition, staff of
the Chief Administrator's Office and the Economic Development Division have met three
times to determine the current status and issues and have met with the President of TEDCO
and the Corporate Secretary, Director of Special Projects to discuss the possible future
composition of the Board of Directors.
The long term structure of the Board of Directors should be established with knowledge of its
long term role and mandate, an assessment of its past performance and structures, its financial
accountability to the City, and its role in and relationship to the City's economic development
strategy. The Economic Development Committee has requested that the Commissioner of
Economic Development, Culture and Tourism report on the latter as well as the environmental
requirements for remediating the brownfield lands in the port area.
It is recommended that these studies be coordinated and that the long term structure of
TEDCO's Board of Directors and its incubators be determined with full understanding of its
role in the context of the City's economic development strategy.
Interim Board Appointments:
The more comprehensive study noted above will take some time to complete and the Board of
Directors currently has three vacancies. It is recommended that the current members be
continued until these studies are completed and a new structure established and interim
appointments be made to fill the existing vacancies.
The composition under the former City of Toronto policy was three Members of Council
including the Chair of the Economic Development Committee, the President of TEDCO, and
six citizens. Citizens were nominated as follows:
2 citizens nominated by the Mayor;
2 business representatives nominated by the Nominating Committee;
1 citizen nominated by the Labour Council of Metropolitan Toronto and York Region; and
1 citizen nominated by the Toronto Building and Construction Trades Council.
TEDCO's current mandate is to facilitate business growth, job creation and economic
development. The desired qualifications for Board members in the City's agency handbook
states that a keen interest and knowledge of the real estate development industry and expertise
in marketing, finance, legal or the environment would be preferred. The Mayor's citizen
nominees are not currently on the Board of Directors. The Nominating Committee process
could take several months and $23,000 to advertise and provide orientation. Since this would
be an interim appointment and the former City of Toronto policy included two citizen
nominees of the Mayor, it is recommended that the Mayor nominate two citizen members to
serve on the Board of Directors on an interim basis. The longer term composition and
nomination process will be reviewed within the context of the more comprehensive review of
the mandate and structure of TEDCO.
Following the same logic of continuing the policy of the former City of Toronto on an interim
basis, the Chair of the Economic Development Committee should be appointed to the Board
of Directors to fill the vacant position historically filled by that position.
Once the vacancies have been filled on an interim basis, the full complement of board
members should elect a new Chair from among its voting members. The President of TEDCO
should be a member of the Board ex officio.
Conclusions:
This report provides an update on the status of the review of the governance structure for
TEDCO and recommends a process for making interim appointments to fill existing vacancies
until a more comprehensive review of TEDCO's mandate and role in the City's economic
development strategy can be completed.
Contact Name:
Nancy Autton 397-0306 Chief Administrator's Office;
Christine Raissis 392-3385 Economic Development, Culture and Tourism
Michael R. GarrettJoe Halstead
Chief Administrative OfficerCommissioner of Economic Development, Culture and Tourism