The Goldie Company

Parley: August 2003 - Dagnone Report – Re: Cambridge Memorial Hospital

Minister, in response to your request to carry out this assignment, I am advancing solutions that will best serve the Cambridge community rather than individual interests. My recommendations, I believe, are in keeping with your Ministerial responsibilities to ensure that Ontario hospitals are governed with a professional sense of stewardship expected from hospital boards.

My resolve has been to offer a solution to this long-standing, dispute between the Cambridge Memorial Hospital (CMH) and its foundation. Regrettably, this dispute has engendered deep-seated anger and resentment within the hospital setting and the community at large.

An important dimension to this investigation was to assess the capacity of the hospital Board of Directors and Chief Executive Officer (CEO) to live up to their obligations of responsible stewardship relative to fostering acceptable working relationships with the foundation.

Given the 60-day time frame and a sense of urgency to arrive at a resolution, I chose to take a pragmatic approach to investigate this multi-dimensional feud. Although several approaches were available to me, I chose to avoid a structured or formal hearing approach in favour of soliciting solutions directly from those stakeholders who sincerely desire an end to this unprecedented dispute between a hospital and its foundation. It is obvious to me, after almost two months of review, that "half-measured solutions" are not sustainable if this proud community and the 1,300 care providers associated with Cambridge Memorial Hospital are to move forward.

Approach and Methodology

The nature and scope of the June 18 Order in Council was described to the key stakeholders on June 24 and 25. Over 200 individuals attended briefing sessions aimed at communicating my assignment and expressing my resolve to craft a solution that would best meet the needs of the community. My purpose for meeting with the combined Board of Directors (hospital and foundation), management, hospital staff and medical staff, was to set the stage for "openness", a prerequisite to finding the best solution.

It was evident from these initial encounters that there was a great deal of reluctance for individuals to speak out for fear of reprisals and intimidation. A confidentiality agreement, which had been previously imposed on Board members, hospital professionals and medical staff, was muzzling the voices that were deeply committed to their hospital and foundation. As this fear was palpable, I publicly stated that I had an expectation that individuals should express their thoughts to me in exchange for anonymity. At this point I reassured them that no names would be attached to the contents of my report. To that end my report will not attribute statements to specific individuals.

The covert e-mail surveillance that had occurred between November, 2002 and February, 2003, destroyed faith and trust among hospital and medical staff. I announced, therefore, the establishment of a secure e-mail vehicle where individuals were free to communicate with me on a confidential basis. Over 100 e-mails and phone calls were received during the investigation period.

To increase the comfort level among the stakeholders, I announced that I would be directing the investigation alone so that we could enhance confidentiality. The most valuable sources of information and genuine solutions came from the over 70 one-on-one interviews with stakeholders.

As investigator, I ignored seeking out any more legal views, as both parties had already engaged in litigation that to date had contributed precious little to a resolution other than differing legal opinions.

I specifically asked both parties in the dispute to terminate the expensive legal processes associated with this feud. Regrettably, hospital representatives have not complied with this directive, as legal activity appears to continue.

As investigator within the Order in Council framework with the objective of offering you valued advice, it was important to meet with key players and the adversaries entangled in this dispute. Equally, it was vitally important to hear from the individuals who have a passion for their hospital work and fund raising activities, and through no fault of theirs were entrapped in the circumstances.

This hospital versus foundation dispute has become so divisive that it is now public fodder in the community. The wider fund raising community is aghast that this situation would be allowed to happen.

To obtain an understanding of the chronology of this travesty and the positions taken by both parties, I perused volumes of material. Individual stakeholders offered supporting material that was made available for my eyes only for fear of future recrimination from hospital representatives.

Minister, a recital of past events and actions on the part of both parties in this dispute over the past year would not serve to strengthen my advice to you. I believe that the dispute transcends the facts and opinions recorded in volumes of scripted Board minutes and legal pronouncements. Rather, I contend that a resolution must go beyond who is right or wrong. A win-lose outcome is highly suspect if an enduring resolution is to be found for this proud community. What will be proposed for your consideration is a new beginning that brings the hospital and foundation together in a symbiotic relationship that fosters successful philanthropy. The ultimate goal is to forge a new working relationship that will lead to successful fund raising to support priorities of Cambridge Memorial Hospital. At the same time, an unequivocal confidence level has to be provided to donors that their generosity is yielding good value for the benefit of future patients. The current dispute has cast dark shadows on this philanthropic obligation that speaks to public trust.

From the outset of my task, I emphasized that the goal was to end this destructive strife by challenging key players to take significant steps toward resolution. What I witnessed was a quasi offering of masked willingness and provisos to resolve the dispute. I noticed a lack of effort on the part of the hospital leaders to admit that this had been a fruitless exercise in brinkmanship which had devoured almost $700,000 of precious hospital resources. The foundation, which has expended a similar amount, acknowledges the futility of the issue, as fund raising opportunities are vanishing before their eyes. Equally problematic is the funding for Phase 3 of the hospital's capital redevelopment. This project now requires an additional $5.8 million to underwrite 40,000 sq. feet of space that exceeds Ministry approved space guidelines. If the hospital is to incorporate the additional space from its own funds, it adds considerable financial strain on fund raising. This situation also lends a sense of urgency to resolve this dispute.

The ideal outcome is to restore faith in the eyes of the community, and specifically donors, so that the capital funding needs of the hospital enterprise can be achieved. Equally, hospital and medical staff are embarrassed at this expensive embroglio.

Unfortunately, no one wants to capitulate for fear of being perceived as admitting to wrong doing. However, this drawn out feud should give neither side any solace that a solution will be found without culpability or blame sharing. I was, therefore, left to identify bold recommendations for you as Minister of the Crown responsible for hospitals. My advice is framed within the context of how best to resolve this dispute for the overall "community good". Minister, to those charged with responsibility of implementing whatever advice you ultimately choose to accept from my review, at a bare minimum, a new partnership between the hospital and foundation must reflect best practices in hospital governance and philanthropy. More importantly, the right people need to fill the key leadership roles.

Failed Attempts to Reconcile

The material, minutes and numerous discussions clearly point out that several efforts had been made to bring the disputing parties together, but to no avail. Over the past year, mediation was offered on several occasions at the urging of community leaders and elected officials. The concept of arbitration was also introduced as a potential settlement forum. The "Work Group", a joint effort established in June, 2002, was ill-structured, as it centred around the key figures driving the dispute. At best, this initiative was wasteful, as it added more conspiracy tendencies and animosity due to lack of trust on the part of both parties. It should have been obvious that intransigent positions on both sides would hamper reconciliation through this flawed process.

A promising opportunity to end this damaging internal dispute was lost in May, 2003, when hospital/ foundation officials failed to collectively embrace recommendations put forward by Mr. Geoff Davies in his role as "fact finder". It is my view that although the foundation accepted arbitration, hospital officials relinquished an opportunity to come to the dispute resolution table in a timely manner because of their insistence on including specific legal issues within the scope of arbitration. Many stakeholders in the hospital setting and the community have concluded that the hospital's actions in prolonging the dispute are akin to righteous indignation, and represent bad faith.

It is my view that these efforts were doomed for failure as the key central personalities in this dispute carried personal vested interest. Finger-pointing, borderline ethical/unprofessional conduct and personal affronts along the dispute journey further entrenched positions of both parties. In the process, an abundance of legal opinions advanced by both sides served to inflame the relationships. The central issue of "control" in this dispute was misinterpreted and eventually led to a breakdown of communication, which resulted in total mistrust of each other.

To illustrate that there was little appetite among hospital Board members, where leadership and genuine intent to end this dispute should exist, one only needs to read the February, 2003 Board minutes. When a motion to mediate was taken, both the Board Chair and CEO opposed the vote, while four Board members voted in favour. Clearly this is a Board divided, and a promising start to reconciliation was lost.

Unfortunately, in the process of feuding in public forums, everyone lost sight of what this dispute was doing to the relationship fabric of a proud community and the hospital work place. The relentless determination to win and the control-driven agenda was now becoming an embarrassment among health care professionals and the donor fraternity. I question the wisdom of governance and management personalities of both organizations for engaging legal manoeuvres and allowing the situation to "spiral out of control". All of this at the expense of the public purse and valued philanthropic principles. Simultaneously, the basic values and reputations of the hospital enterprise and foundation were compromised when their actions bordered on flagrant disrespect for community generosity. My considerate observation of these squandered opportunities makes me conclude that certain hospital spokespersons were determined to win at whatever price - - a situation I deem reprehensible.

An example of the toxic working relationship between the hospital and foundation follows.

CMH acted as host to the foundation's computer system. As host to an independent entity, the hospital should have respected the privacy of foundation information, and particularly the confidential e-mails exchanged between foundation staff and their counsel/advisors.

The decision by the CEO to open and retain copies of e-mails belonging to foundation staff, without their knowledge, beginning November 25, 2002, and continuing through until February, is incredulous behaviour which should not be permitted. Further, hospital staff members were directed by the CEO to create a special network that would act as a repository for all the captured correspondence generated by foundation employees. It appears that copies were made so that they were readily available to the CEO office upon demand.

Despite expressed reluctance from staff, the CEO escalated the surveillance to include some hospital employees. At considerable expense, two of the foundation's hard drives were accessed, mirrored and copied. This process was expanded to access additional attachments to e-mails, which in turn required that personal folders be retrieved.

This covert surveillance of e-mail and computer files by the hospital CEO is unthinkable and unethical. I deeply sympathize with those hospital staff who were directed to carry out these deeds, and thus became accessories to this electronic conspiracy.

Hospital CEOs who are members of the Canadian College of Health Service Executives are expected to comply to standards of ethical conduct. Professional responsibilities to the organization being managed by the CEO includes "serving in the public interest in ethical fashion", and "ethical use of resources". Members also have certain responsibilities to the community and society. For example, "Health Service Executives shall practice with honesty, integrity, respect and good faith". These values and corporate ethics were all compromised.

Issuing directives to covertly conduct indeterminate monitoring of foundation e-mail without consent violates basic privacy principles, regardless of who owns the equipment. Further, the decision to continue with this vindictive activity over several months shows the mean-spirited management mentality. I regard this behaviour as a serious breach of privacy. It is my view that when private correspondence between a client (in this instance the foundation) and its solicitor/advisor is captured secretly, an ethical transgression is committed. It is inexcusable for the hospital Board leadership to condone this surreptitious action on the part of the CEO. I can only surmise that the Board was not adequately informed of this breach of trust that involved a valued partner - the foundation.

The direct costs of this electronic infringement alone, including consultants, forensic experts, and setting up the spy systems, is estimated to be over $70,000. This serves as another example of bad judgment in the use of hospital resources. Above all else, this intrusion breeds disrespect and distrust that proliferates through all elements of the hospital enterprise. Hospital stakeholders are horrified by what this senseless contest has done to the reputation of CMH in the eyes of the community, region and beyond.

Governance Issues

Minister, my Order in Council mandate required of me to assess whether the hospital Board and Chief Executive Officer were capable of living up to their corporate responsibilities, given the divisive dispute. To do this I have reviewed the functioning of the policy making group through minutes and material. Equally, as a result of the many one-on-one discussions with a variety of stakeholders, I was able to discern the perceptions held of the Board of Directors and Chief Executive Officer.

The paramount role of a hospital director is to represent and act in the best interest of the organization by exercising fiduciary responsibilities, and to be accountable to its key stakeholders, such as patients, hospital staff and the Ministry of Health and Long-Term Care. My investigation, within the limitations of time, has found the hospital governance to be lacking in a number of areas. For example, directors have not shown leadership as policy makers. Rather, they have passively accepted strong management biases and executive actions in this dispute that touch on brinkmanship. There are strong feelings by those who are familiar with Board functions that Board members are unduly influenced by management, and not fully informed on issues that require wholesome discussion. Disagreements over the handling of the dispute, along with unethical actions, have led to several Board resignations. Today a number of vacancies exist at the policy-making level.

During my interviews, a general theme that hospital management is determined to control everything was expressed by individuals who have witnessed such dogged determination. Sadly, many believe that if senior management cannot exert control over individuals, someone will find a way to unceremoniously discard them. The feeling is that if all else fails, management will threaten legal action, as witnessed by the latest writ filed by the Chief Executive Officer against a physician who dared to publicly express his views. This toxic atmosphere in the workplace would never be condoned by an effective Board of Directors.

Views expressed by dedicated individuals who believe in their hospital have uniformly expressed the quest that the CEO has for control at all levels. The impact of this management style reverberates both within the hospital and with those agencies that come in contact with this organization. The shackled effects of this domineering need to control is reflected in the unprecedented management staff turnover, which has either escaped notice or been ignored by the Board. This widely-known, unhealthy trend should have signalled to the Board that either the selection process is flawed or the individuals simply could not function in the work environment. Upon questioning, the Board appears to have minimal knowledge of why individuals left through this revolving door.

The Board of Directors is expected to possess a collection of skills and attributes, and be independent-minded so that it may challenge management to ensure the best interest of the hospital is pursued. This passive governance group seems to be directed by the Chief Executive Officer, who is employed by the Board. The Board appears to be overpowered by "green paper" documents that denote confidential agenda items at Board meetings. When the majority of agenda items are classified on green paper as confidential, it tends to dampen forthright discussion and transparency at the governance level. Ostensibly, the overwhelming view from internal stakeholders and community leaders points to a Board that is led, with decisions and direction authored by the CEO. It is my belief that the Board appears to abdicate to the CEO or the Executive Committee rather than assume collective governance leadership aimed at directing what will best serve the corporation. In the material made available to me, and supported by numerous respected individuals who participated in the interviews, it appears that a former Board member, with the influence of the CEO, may have intimidated the Board at the height of this dispute.

What exists at Cambridge Memorial Hospital (CMH), are Board processes which are poorly aligned with, and in fact contradict, contemporary governance practices which demand deliberation of issues by the entire Board.

The current stalemate begs the need to seek out the best governance practices, and the creation of positive and effective hospital/foundation relationships. In my conclusions, therefore, my intent is to position the hospital corporation so that governance is based on principled, effective leadership and absolute integrity.

There is a misalignment between the current modis operandi at CMH and contemporary governance practices expected of a mature hospital enterprise such as CMH. Progressive best practices at the governance level require a director (trustee) to act, first and foremost, in the best interest of the hospital organization. This characteristic is the essence of trusteeship that supercedes all other responsibilities or concepts of representation and advocacy. Regrettably, at CMH some directors' actions (past and current) run contrary to responsible governance, as they have relentlessly defended this power struggle against a fund raising agency that exists to support the hospital. The dispute was the Board's responsibility to resolve.

Board members (past and current) expressed concern that the Executive Committee, led by several strong personalities, has been dictating the direction of this long-standing discord. The Executive Committee has assumed all- encompassing decision-making power at the expense of open debate at the Board policy-making level. This practice devalues the rest of the Board. It is ironic that after 35 special Executive Committee meetings held over a six-month period to discuss this dispute, it appears that the majority of the scripted minutes were neither circulated to the entire Board, nor subjected to healthy debate. The responsibility for not allowing deliberation and transparency must rest with the Board Chair of the day.

The Board, in my view, has misjudged the almost irreparable harm that the continuation of this dispute is causing to the hospital enterprise. For this it must be held accountable. Their intent on duplicitous actions, such as the foundation e-mail piracy, illustrated their resolve to win at all cost. I suspect that the e-mail deed was done without appropriate Board notification and advice. Volunteer Board members deserve more consideration and respect before an action of this seriousness is taken by management. Opening private mail, regardless of the ownership of the mail channels, is contrary to fundamental ethics that should be espoused by a responsible Board.

The relationship between the Board/Chief Executive Officer and the medical staff, a vital group within the hospital, can best be described as lacking respect and trust. Numerous reputable medical voices commented on the gulf that exists between the Board, senior management and medical staff. Examples of the current "we/they" conflict include deep resentment that the Board and CEO have acted irresponsibly in dragging out this feud to the detriment of advancing the real needs of the hospital. Strong lingering dissident views over the re-engineering projects, coercion to sign letters expressing opposition to the Minister's notice of a pending Supervisor, and the perceived gag orders inherent in the confidentiality agreement, all contribute to a great deal of unrest among physicians and surgeons. An overwhelming number of medical staff do not feel valued. They point to the control mentality within the executive leadership, and have concluded that the "take no prisoners" approach is extremely detrimental to long-term working relationships.

While my experience points to the reality that in many hospitals medical staff have high or unrealistic expectations of the Board and management, the situation in Cambridge clearly points to the need for swift reconciliation. My investigation shows that the medical staff and management grossly undervalue each other, thereby leading to an inordinate amount of tension and mistrust that impacts daily on the workplace. There is genuine worry that more physicians and surgeons may abandon CMH.

In light of the foregoing, consideration must be given to not just resolving the dispute over control of the foundation. The ultimate goal must be to assemble a unified team consisting of Board, management and medical staff, all working in concert with the fund raising volunteers for a laudable cause - quality patient care for Cambridge citizens.

Conclusions

Over the past two months, I have formed a number of conclusions that speak to the cogent issues that swirl around this dispute, and impact the capacity of the Board/CEO. These conclusions will be the basis of the recommendations and advice to you as Minister.

It is my contention that current working relationships between the hospital and foundation are not reconcilable. The community has lost confidence. Key players have been accused of allowing this feud to hijack the caring mission of a proud hospital and its associated foundation. On the other hand, the foundation Board and Executive Director do not escape criticism, as their aggressive stances to change membership without appropriate consultation and open debate was misdirected. It is apparent that actions initiated by hospital officials left the foundation with no choice but to hold Board and management leaders with a great deal of contempt. It was the "out of sight, out of mind" attitude shown by hospital representatives against the foundation that bittered the already strained relationship.

If one accepts that the CMH Board has the obligation to act in the best interest of the hospital enterprise, then it has failed by permitting this fierce, year-long divisive dispute to continue. It is reprehensible that hospital officials did not curtail the legal manoeuvres early in the process. To deliberately choose to fund questionable legal wrangling and court proceedings is akin to flagrant disregard of responsible public stewardship; the hallmark of effective hospital governance. This aspect is disconcerting, as the hospital Board Executive, particularly over the past six months, appeared to be mesmerized by interests of control, domination, litigation and personal agendas. Unfortunately, the Board repeatedly succumbed to the Executive Committee when it should, as a collective body, have exercised its governance and policy decision-making obligations.

In the final analysis, the Board has lost focus and devalued its accountability to staff, patients and the Ministry of Health and Long-Term Care for responsible use of funds. It is regrettable that the dispute, by its very nature, has diverted time, energy and precious resources away from patient care. After all, the hospital Board has the primary duty to make best efforts to offer quality services to all patients to whom it provides care within available resources.

Equally, hospital boards have a responsibility to their foundation and associated donors to ensure all donations will be used for designated intentions rather than underwriting legal battles with scarce funds.

Neither hospital officials nor foundation representatives escape criticism and blame that one time or another they indulged in surreptitious scheming and acted in a manner that bordered on duplicity. Certainly, this is unbecoming of the code of conduct for any professional group, let alone when public trust is in play.

The actions on the part of certain foundation leaders has been less than transparent. Their drive to amend their corporate by-laws can be misinterpreted as a move to disenfranchise the hospital corporation, given the distrust among key players. Foundation leaders failed to position their by-law revisions as steps to modernize the foundation corporation. Adopting best practices in philanthropy is to be applauded. However, the strong, almost unilateral, positioning around the Carter Report, and related membership issues tainted the foundation players in the eyes of hospital leaders.

At the end of the day, both the hospital and the foundation must accede to the paramount interest of the donor community. This appreciation appears to be wanting among key hospital leaders, as evidenced by their drive to extinguish the current foundation mandate by filing for a new foundation vehicle. If the CMH and its foundation are to rebuild an enduring philanthropic program, both must realize that giving on the part of most people is an emotional, caring gesture. If fund raising is to succeed in the Cambridge region, programs must be jointly developed to meet the many emotional needs of a variety of donors who desire to give. On the contrary, donors will distance themselves from both hospital and foundation if they engage in fruitless actions that illustrate public discord and irresponsible use of resources. Donors have already shown the spectre of walking away from CMH's noble causes as a result of this controversy. Notice has already been served by a leading donor that its significant, multi-year gift will be directed away from the hospital unless the dispute is resolved immediately.

Raising funds for hospitals is not cost-free. The development and maintenance of the infrastructure requires considerable resources. All the more reason why the hospital should have embraced rather than rebuked foundation volunteers, whom I regard to be the lifeblood of a successful hospital fund raising venture. For CMH to reach its full potential it must support the foundation in every way, including offering a presence within the fabric of CMH.

Both organizations' behaviour and actions were driven by a desire for control and reliance on legalities with no face-saving options readily apparent. Thus, the feud can be characterized by upmanship strategies which touched on unethical and unprofessional actions. In the eyes of hospital and community stakeholders, accountability was thrown to the wind in favour of pursuing this damaging dispute. As such, blame must be apportioned to both the hospital and the foundation leaders. Consequences must follow if we are to suspend unacceptable behaviour on the part of individuals who abuse public trust.

When questioned, the hospital Board Chairman/CEO believe that they demonstrated good faith in their actions, and are working in the best interest of the hospital. I disagree. As a governance body, they have allowed legalism to overtake prudent judgment and responsible stewardship. I regard the hospital corporate actions as confrontational. Brinkmanship initiatives have been ill- advised and counter-productive in achieving "community good". It must be emphasized once again that the hospital Board ignored its fiduciary responsibilities when one considers the significant cost of this dispute, plus the lost opportunities for fund raising, which are critical to the hospital redevelopment.

There is a widely held perception that hospital officials perverted "community good" to serve suspect vested interests. An estranged relationship between and among leaders was observed throughout my investigation. Hospital officials have lost sight of the fact that the foundation serves as an important conduit through which the Cambridge community at large participates in the life of its hospital. Today's ever-increasing need for donations and legacy gifts has significantly increased hospitals' reliance on foundations. Issues surrounding the dispute, for the most part, have resulted in controversy and community divisiveness. The latest iterations in June led to the issuance of notice that a Supervisor would be appointed under the Public Hospitals Act (Ontario). In earnest, both sides began to voice their biases to gain public support for their respective positions.

Pursuing a legal solution through the courts at this time to determine who is right and who is wrong is counter productive, given the indignation between and among key leaders. I believe that the community may recoil against the hospital and foundation unless this discord is resolved with haste. The current environment does not bode well for a meaningful resolution unless drastic steps are taken immediately upon the filing of this report. Given the climate and intensity of the feud, half-measured solutions are not sustainable. If the situation is left unchecked, both organizations, in time, will implode, as confrontational tactics will persist.

In the interest of offering a pragmatic relationship, I will include thoughts that reflect best practices in philanthropy. A "di novo" working relationship between the two organizations that reflects progressive, best practices needs to be crafted and implemented without delay

I have publicly stated that no single person or organization has a monopoly on blame inherent in this dispute. Rather, many leaders, past and current, must share responsibility in creating this precarious situation that threatens to derail the best interests of the community, the hospital and its foundation. The bold prerequisite to an enduring solution is to ask the key leaders of both the hospital and the foundation to stand down from their corporate positions. A clean leadership slate is imperative, as I have concluded that key relationships are beyond repair, and the community must see tangible change among the antagonists. What is required Minister, is a fresh start to redefine and rebuild effective relationships that will best serve the collective needs of the hospital and its foundation.

The ultimate outcome should be based on how to best craft the most successful enduring philanthropy program for the benefit of tomorrow's patients. Given the long-standing dispute, the focus of attention must be on restoring faith in the eyes of all stakeholders in an expeditious manner. It is my contention that it will not be feasible to regain credibility in light of the acrimony and spitefulness that has existed among the opponents over the past year. A constructive relationship will not be possible unless a new agreement reflecting best practices in philanthropy is formulated to suit the specific needs of the Cambridge regional community.

It is my belief, based on experience, that a "shared leadership" model between the hospital Board Chair, foundation Board Chair, hospital CEO and the foundation Executive Director is the most effective way to strive for partnership success. Regrettably, many leaders have difficulty in sharing power, as they mistakenly believe that by doing so means giving up control. I regard power sharing as a means of enhancing the collective drive and desire to realize the organization's vision.

The hospital Board is where responsibility for maintaining accountability and safeguarding trust resides. Directors of non-profit corporations like hospital foundations are subject to the same standards of care and stewardship as directors of profit enterprises.

The real power of a board comes from the knowledge of its directors, their cohesion as a team and the advice received from the Chief Executive Officer. However, the over riding governance imperative is that the hospital Directors must retain ultimate control of the organization. Circumstances around the dispute at CMH provide serious doubts that this Board was governing. It brings into question whether they acted in the best interest of the organization. The primary principle governing members of the Board is to exercise the care, diligence and skill that a reasonably prudent person would do. Ultimately, they are expected to make informed decisions. The Board for all intents and purposes, surrendered its governance responsibility to the Executive Committee, who saw fit to hold countless meetings during 2003 on this dispute. The apparent absence of reporting back to the entire Board, and the lack of debate forces one to conclude that a small inner circle is in power.

In the eyes and minds of hospital staff and community stakeholders and leaders, accountability was sidelined in favour of expensive litigation. They believe that the key opponents should be held accountable by accepting responsibility for this embroiled state of affairs.

Through their own admission, both hospital and foundation spokespersons have both declared that the current dispute has seriously prejudiced the hospital's reputation and the foundation's ability to raise necessary funds. A guess estimate of the monetary loss, when one calculates the combined legal fees and lost fund raising opportunities, would exceed $2 million. The question becomes who should be held to account for this expensive public confrontation, which is at cross-purposes to the mission of CMH.

A Perspective on Hospital Foundations

In today's dynamic health care sector, hospital foundations are a quintessential means for connecting people to each other in a community that truly believes in its hospital. By working together on projects of mutual interest and benefit, a sense of trust and co-operation with each other can be translated into a lasting relationship for "community good".

Today's successful hospital foundations are corporate entities with legal , moral and fiduciary responsibilities to their donors, hospital constituencies, and the general public. Although self-governing, foundations have many points of intersection and accountabilities.

At a minimum, hospital foundations are accountable for:

» effective governance and organizational structure

» developing appropriate vision and strategic direction that best serves its hospital

» prudent stewardship of all donated funds

» ensuring their relevance in today's fast-paced world of philanthropy and volunteerism.

In searching for an ideal relationship between a hospital and its foundation, it is important to accept that they are in different yet complementary, dependent "worthy businesses". That is, CMH exists to provide quality health care, while the foundation is in a perpetual fund raising and stewardship mode. Simply stated, the hospital provides the rationale and case for community giving, while the foundation provides the vehicle by which fund raising takes place. It is through a mutually understood and beneficial association between the two entities that greater benefits result for both. Thus, by working together, the resulting hospital/foundation partnership is best able to generate more synergy, which in turn will yield more philanthropic support.

The above dependent relationship brings responsibility to each other. The hospital must work to create an environment for success by offering unequivocal support to the foundation, which positions the fund raising entity as a "valued partner". With such undivided support, the foundation will be better able to champion the critical, ongoing case for giving to CMH, and in turn advance its aspirations.

Having heard directly from over 70 stakeholders, all of whom support CMH, I believe that a new relationship between the foundation and the hospital must be created and nurtured. The issue of how many members are associated with the foundation corporation, and who appoints them, in my estimation, is of distant importance. It is regrettable that one of the central issues in this dispute has been membership appointment prerogatives. Given the intense feud over control and self determination, I question the need for voting membership in today's world of fund raising. Rather, energy should be devoted to searching for and finding the most effective governance model and bringing together Board members with the required skills, acumen and passion to direct successful fund raising and stewardship.

Thus, the foundation's proposed General Operating By-law No. 1, in my opinion, will not address the root causes of this dispute. Rather, a di novo relationship must be forged in an expedient manner. I would propose, therefore, that the following new "shared leadership" model be developed and adopted by both organizations in their respective by-laws.

Fund raising leadership is ideally shared between the foundation Board, vis a vis Board Chair, the hospital's Chief Executive Officer, and the foundation Executive Director (commonly referred to as the Development Officer). Shared leadership implies properly placed power and joint authority. When leaders collaborate effectively with others to accomplish a worthy cause, such as hospital fund raising, their collective power is enhanced in every way.

The foundation Board Chair, through the entire Board, has a special role that ensures that a shared leadership concept will enhance fund raising. The Chair has the power to hold each Board member accountable, and ensures all Directors provide best efforts as volunteers to achieve successful fund raising. Effective Board Chairs, through persuasion induce Directors to reach consensus and take collective action.

The foundation Board cannot delegate the ultimate accountability for successful hospital fund raising to staff. The core business of the foundation is fund raising. Thus it must be under the direct leadership of the Board. It is important that the staff not supplant the Board's governance prerogative in setting strategy, policy and corporate direction. The Board has an obligation to serve as the strategic instrument responsible for delivering fund raising outcomes. As policy maker, it has a duty to be a resource and mentor to the Executive Director.

It is my contention that the foundation Board Chair must have a strong congenial relationship with the hospital Board Chair and hospital CEO. In a shared leadership concept, such interfaces will build relationships and promote transparency and goodwill. The foundation Board Chair, in my view, is a key community stakeholder whose opinion should be valued by all hospital leaders.

As a partner of the shared leadership model, the hospital CEO has an obligation to create an environment for fund raising success within the hospital corporate vision. This leadership model mandates the CEO to work with the hospital Board, the management team and medical staff leaders to embrace the foundation's role and stature within the overall hospital setting. Today's best practices dictate that the engaged involvement of the CEO in the philanthropic mission is deemed paramount if fund raising is to succeed. Presenting philanthropic opportunities to prospective donors in co-operation with foundation representatives, making "asks" to donors in the presence of foundation spokespersons, and relationship-building with the donor community are examples of the expectations of the CEO. Thus, in keeping with best practices, the CEO should be a full fledged member of the foundation Board.

The Executive Director of the foundation is the third partner in the proposed shared leadership model. My experience informs me that this is the most challenged role, given the dual reporting relationship inherent in the nature of this pivotal position. Within the proposed shared leadership model, the Executive Director is the operational leader who is regarded as the "knowledge professional" with the most resident experience in philanthropy pursuits. The foundation Executive Director is expected to provide best options to dedicated volunteer Board members and staff. Also, the Executive Director has the opportunity to demonstrate leadership by articulating the organization's vision, and ensures that the foundation's game plan is in sync with the hospital's philanthropic priorities. Often in the fund raising world the Executive Director role is best defined as leading from behind. In other words, leadership in this instance is seen as supporting both the foundation Board Chair and hospital CEO.

The reporting structure to support this shared leadership concept is critical to lasting inter-relationships. For an enduring partnership to survive between the Executive Director and the hospital CEO a coherent reporting linkage is vital. Thus, the physical location of the foundation enterprise is an important enabler in creating ongoing, working relationships. The interactions and communications among the leaders must be no less than congenial at all times to maintain integrity of the fund raising portfolio.

When one points to best practice, it also refers to having the Executive Director regularly invited to meetings of the hospital senior management team. Such presence would speak volumes about the import of fund raising within the hospital setting.

Foundation Board members have ultimate responsibility for governance of the foundation's assets and operations. An important part of this mandate is accountability to each and every donor. As trustees of philanthropic donations, members have a duty of trust to ensure wise and prudent utilization of donated funds. It must also be underscored that the foundation Board members are accountable to the public for both dollars raised and dollars spent. This duty of care has been delegated to the foundation, and is guided by legislative rules.

At the risk of repetition, I note that the governing power of the foundation Board members is fiduciary, and includes both a duty of care and a duty of loyalty. In addition, Board members are required to act in good faith in the best interest of their corporation.

Best practice within the shared leadership configuration also calls for cross-representation at the policy making level between the hospital and its foundation. It is progressive thinking to have the foundation Board Chair sit as ex officio on the hospital Board. In the spirit of reciprocity, the hospital Board Chair or designate should assume such an ex officio position on the foundation Board.

When a high degree of integration, as noted above, is embodied, a constructive working relationship can be effectively established between the two interdependent organizations. Philanthropy, in support of CMH, will flourish as the work place environment will be nurtured by leaders who share a common vision and pursue mutual goals on behalf of Cambridge citizens.

However, a prerequisite to the proposed shared leadership model is the element of mutual trust between the hospital and foundation. Leaders in a hospital-foundation best practice relationship must demonstrate unequivocal respect for other leaders in the tri-leadership arrangement. Success of the shared model is reliant on the character and leadership styles of the three key leaders (foundation Board Chair, hospital CEO and Executive Director of the foundation). If personal relations among these three are at odds, any devised organizational relationship is doomed to failure, as evidenced by the current dispute. Donor confidence will be shaken if relations among the three main actors on the fund raising stage are seen as adversarial. Leaders within the shared leadership model must, therefore, put donor and "community good" front and centre.

Recommendations: Prescribing a New Era

I now offer you my best-efforts advice to respond to the June 18, 2003, Order in Council, aimed at resolving the damaging dispute between Cambridge Memorial Hospital and the Cambridge Memorial Hospital Foundation. My advice is based on my 20-years of experience in successfully working with hospital foundations, together with relying on numerous discussions with hospital, foundation, community and philanthropic stakeholders. It must be stated that an overwhelming majority of stakeholders are morally outraged at the events of this travesty, which they believe has tainted both the hospital and the foundation. Throughout my experience I have never witnessed the vitriolic feelings that are in play between hospital spokespersons and foundation leaders. Intractable positions of winning at all cost are poisoning relationships and inviting adversarial behaviours.

Minister, after two months of review, my considered, over riding conclusion is that both parties to the dispute must account to the community at large (patients, staff and donors) for permitting this rancour to evolve into a "crisis of public confidence" within the Cambridge region. By pursuing this public feud, over $1.4 million of precious hospital and foundation resources have been squandered for legal fees, consultant fees, e-mail surveillance and other related costs. To me, in an era of scarce resources, and in the face of many patient care needs at CMH, this lack of stewardship is unconscionable.

Based on my investigation, the litany of affronts to each other with legal opinions anchoring opposing sides, led me to conclude that a "clean slate" must be considered. I do not make this statement lightly or casually, as drastic consequences would follow. However, my strong conviction, after reviewing the tattered relationships between and among key leaders, is that changes in leadership at both the hospital and the foundation are prerequisites for an enduring resolution.

I advance to you and your Ministry, therefore, a course of action to address how to best serve the future interest of a proud community that, I believe, will rally to support philanthropy if a prescription for leadership change is ordered by your Ministerial authority. What is at stake is the need to show the over 1,300 hospital employees, medical staff, volunteers and past and prospective donors that decisive action will be taken by you.

I offer the following recommendations, which can be directed by whatever best means you have through the Public Hospitals Act. Other government agencies, such as the Public Guardian and Trustee, which oversee foundation conduct, can take action within the provisions of legislation such as the Charitable Gifts Act (Ontario), and Charities Accounting Act (Ontario). Federal agencies that determine the status and fate of charitable organizations can also play a role in realizing an end to this dispute.

1. That the current CMH Board of Directors be asked to immediately relinquish their governance role. This action will allow the governance level to be reconstituted afresh with individuals who will bring necessary skills to the hospital policy table.

Given the complexity of directing hospitals in today's challenging environment, it is imperative that CMH attract experienced citizens who will challenge management. Today, the current Board has minimal trustee experience, as twelve of the fifteen Board members have tenure of three years or less. It is my understanding that the CEO unduly influences the selection process of new trustees and the Board succession plan. The new selection process for new Directors must reflect "best practices" in governance.

Given the desire to pursue "best governance practice", a formal recruitment process should be initiated to assemble a new slate of Directors on the basis of required skills to live out governance responsibilities. I would suggest that the process should invite the Chamber of Commerce and outstanding citizens to participate in the search and selection process. Further, the reconstituted Board should include cross-representation of one Director from one of the neighbouring hospital boards so that communications and hospital services planning can be enhanced within the region.

An essential prerequisite to being appointed to the successor Board is attendance at a governance orientation program. It is suggested that the Ontario Hospital Association be approached to organize and deliver such a program.

2. That the current foundation Board members be asked to relinquish their governance responsibilities.

Plans should be made immediately upon resignation of the Board to reconstitute its governance within the new framework of this report. New leaders and new governance composition is required if the community is to regain confidence and public trust. A mandatory requirement of Board membership would be attendance at a governance orientation program similar to that being proposed for new hospital Board members, with emphasis on philanthropy.

3. That the current CMH Chief Executive Officer be asked to resign immediately. Failing a resignation, termination should be initiated through your powers under the Public Hospitals Act.

Unless a new leadership style is put in place at CMH, the organization will continue to lose excellent individuals who work in an environment that prevents them from reaching their full potential. The unprecedented turnover of management personnel signals a top-down leadership style that has gone unchecked. Hospital stakeholders are privately voicing the need for a more liberating style of leadership that will maximize the hospital's full potential within the region.

4. That the Executive Director of the foundation be asked to relinquish her management duties.

Similarly, to regain the confidence of current donors and the donor community, it is critical that a new leader signal the implementation of a new framework for fund raising.

5. That the new framework model to govern fund raising at CMH be developed and adopted by both successor governance structures.

Experienced hospital foundation leaders in Ontario are available to offer their expertise. Consultants should be avoided at all cost in establishing the new model, as Ontario has a mature philanthropy infrastructure that can offer prototypes and expert advice.

6. That both successor Boards (hospital and foundation) take steps to incorporate the new relationship framework within their respective by-laws on a timely basis. This initiative will signal formal ownership of the new partnership model into the future.

7. That both the hospital and the foundation disengage and sever from all court actions and related debates. Further, that the hospital and foundation should publicly declare a moratorium on spending valuable, scarce resources on legal/consultants' opinion associated with this dispute, and publicly communicate in a transparent manner this willingness to the Cambridge community.

8. That the hospital be directed to relocate the foundation within hospital premises, indicating a strong signal of this new beginning. Further, the hospital should offer collegial assistance to foundation staff to ensure they are welcome as a valued partner. By reducing overhead costs more funds will be available to support hospital priorities.

9. That Ministerial consideration be given to provide copies of this report, without prejudice, to not only the Chair of CMH Board, but to all Board members of both governing bodies (hospital and foundation) and appropriate community leaders, as you deem necessary.

10. That a communication strategy be developed to share your Ministerial action in a transparent way among community leaders so that the healing of relationships can occur throughout the community.

Minister, I realize the magnitude and implications of the recommendations calling for a "new era". I believe the current leadership has mismanaged the dispute, and as such leaves you no option but to exercise your Ministerial powers. I believe that the power of persuasion from community voices will encourage the foundation leaders to accept these recommendations in the spirit of achieving closure. I do not for a moment undervalue the volunteer leaders who became involved and attempted to draw this saga to a logical end.

I wish to specifically acknowledge and thank the over 120 individuals who took the time to make representations to me, either in person or through correspondence. They have a genuine interest in seeing this travesty resolved. The overwhelming expectation is that you, as Minister of Health and Long-Term Care, will act on this report in a timely manner.

Minister, although my task is complete under the Order in Council, I offer my time to you, or any of your Ministry staff, to discuss this report as you deem necessary.