CONFIDENTIAL TO BOARD MEMBERS ONLY
NEW ZEALAND BLOOD SERVICE
Minutes – NZBS Board Video Conference
Minutes of the NZBS Board
Meeting held at:
New Zealand Blood Service
71 Great South Road
Epsom
Auckland
In attendance:
Mr David Chamberlain (Chair)
Dr Jackie Blue (Deputy Chair)
Dr Bart Baker
Ms Fiona Pimm
Dr Paula Martin
Ms Cathryn Lancaster
Mr Ray Lind
Apologies:
None
Management:
Ms Sam Cliffe (CEO)
Mr John Harrison (CFO)
Board Secretariat:
Vanessa Siddins (Board Secretary)
Date:
26 March 2020
Sarah Morley, CMO jointed the meeting at 9.30am
ITEM 1.0 APOLOGIES
There were no apologies for this meeting.
ITEM 2.0 INTERESTS REGISTER
2.1
Updates to the Interest Register
There were no updates to the interest register for any items on the agenda.
2.2
Declarations of Conflicts of Interest for this Agenda
There were no conflicts of interest acknowledged for any items on the agenda.
ITEM 3.0 MINUTES OF PREVIOUS MEETING/ACTIONS REPORT
3.1
Confirmation of Minutes – 27 February 2020 Board meeting.
D Chamberlain and P Martin noted that they had some changes and it was agreed that D Chamberlain would liaise with
P Martin then circulate these changes to the Board after the meeting and confirm them by an email approval process.
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CONFIDENTIAL TO BOARD MEMBERS ONLY
3.2
Schedule of Outstanding Action Items from Previous Meetings
The status of all action items as outlined in agenda item 3.2 were noted.
The following action items were discussed:
2.6
S Clif e noted that she had not progressed this item on presentations for future thinking having been
overtaken by recent COVID-19 events.
5.2
The Adverse Fractionation Event policy will be further discussed in item 6.2 Financial Guidelines policy
review.
3.4
Matters Arising from the Minutes (not covered elsewhere)
There were no mat ers arising.
ITEM 4.0 CHAIRMAN’S REPORT
Nothing to report.
ITEM 5.0 CEO’s REPORT
COVID-19 Pandemic update
S Cliffe advised the situation had moved rapidly from the last update to the Board. A NZBS emergency response team
had been activated using a Coordinated Incident Management System (CIMS) structure. There had been a huge amount
of information circulating, and the last 48hrs had been chal enging for the team to get clarity, particularly around staf
issues.
There are multiple pieces of work underway and S Clif e was focusing on staf ing issues, keeping staff safe and well
informed. There are a number of roles that are critical but not clinical where the majority of staf are working from home,
eg Finance and Payroll teams with staff only coming into the of ice when necessary. There have been a number of
concerns about the virus from staff within front line services. A lot of safety measures have already been put place in the
last 48 hours to reassure staf they are safe. We are working within the MoH advice to ensure appropriate measures are
in place, eg PPE. There has been a helpline set up for staf and we are adapting a basic version of the intranet to be
available for staff at home. Management feel comfortable where the organisation is today, but this may change.
It has been a good week however issues are wel down. There have been some chal enges with mobiles where a number
of venues have now become out of bounds for us. Work has been done around the mobile schedules, although they will
look dif erent, with a lot of attention now being put on the hub sites. The ef ort made by the emergency response team and
others should not be underestimated and staf continue to work calmly and ef iciently.
S Morley commented that the organisation was in an interesting position, particularly with the scaling back in staff when
we anticipated this would be a time when we should be scaling up. The key issue being blood supply, NZBS currently have
a reasonable number of donors and continue to collect all required products. However, we do need to plan for the possibility
of deciding which are our core products, these general y are: red blood cel s, platelets, and fresh plasma that we use in an
emergency situation.
The question was raised around which products may be used for patients who are unwel with COVID-19. S Morley
responded that there would be some increase in the use of red cel s along with higher use of platelets and plasma for
clot ing disorders. Together with the key products we need to preserve, there is another group of patients that require other
stocks which we hold two month’s supply, eg pregnant woman, babies. The chal enge could be with moving stock around
the country if we don’t have the usual logistics in place.
There was further discussion around the availability of a test for anti-bodies in blood? S Morley advised that in research
labs, tests are actively being developed, with the UK and China already doing some testing. There is no evidence we need
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CONFIDENTIAL TO BOARD MEMBERS ONLY
to introduce this into our testing regime. The main use of antibody screening would be to help with the wider management
of COVID-19.
S Cliffe advised that the organisation was currently under control although none of us know how long this pandemic is
going to go on for. We have models of what critical teams and financial mat ers would look like. We may know what the
scenarios might look like, however dealing with them would be more chal enging.
S Morley left the meeting at 10.00am.
Financial consequences
J Harrison and the Finance team have been scenario planning noting that additional working capital was required for extra
consumable stocks to build a safety buf er for key elements of the supply chain. NZBS is planning to order additional
Privigen out of the ordering cycle as a risk mitigation if we can’t keep up with our Ig product demand.
NZBS has or is planning to commit an additional $3.5m in additional stock initiatives consisting of $1m for consumables
and $2.5m for Privigen. The initial assumption is that the main impact will be on fresh products and blood bank testing. S
Morley had advised J Harrison there was the likelihood of a 30% reduction if al electives were cancelled across all DHBs.
However as of yesterday there had been strong issues for products and services. A big component of sales (67%) for
March is fractionated product and primarily Ig product within that category.
An updated forecast prepared in normal times would have indicated a $2.7m deficit by 30 June, however we are currently
looking at a $7m deficit. Available liquidity as 30 June was forecast at $7.8m in ‘normal times’ but would drop to $4.1m
under Covid-19 assumptions. The conclusion was NZBS would see a depletion in cash reserves that based on certain
payment timing eg CSL Behring, would further deplete cash reserves in Q1 of 2020/21. The organisation wil not be able
to sustain itself and would need to ask the Crown for financial assistance in 2020/21.
D Chamberlain noted that a $7m loss by 30 June 2020 puts the organisation in a delicate position. Consequently, if we
approach Government to request financial support, this needs to tie into the capital injection paper to the Minister, the
Statement of Intent (SOI) and Statement of Performance Expectation (SPE). S Cliffe noted that she had contacted our
Ministry of Health account manager Peter Jane to ask what this will look like for the SPE and SOI. She was advised that
Treasury and the State Services Commission are doing something for all of Government. Our finance team are forecasting
worst case scenarios using the current best advice. We need to signal this through our cur ent channels however we are
not asking expressly for financial assistance at this point.
It is not going to be appropriate to put the capital paper to Minister Henare at this time and the implications financially need
to be considered careful y. Our core function now is safety of the blood supply.
There was discussion around the need to document the dif erent financial scenarios. Peter Jane, is the right place to start,
and the CFO at the Ministry wil be well aware of the issues as other Government departments work on the same cost
recovery basis. We need to make sure we are part of the process sooner rather than later. S Clif e noted that Peter Jane
is well aware of our situation and had helped hugely over the last 24 hours.
Paper for Minister Henare re Equity Injection D Chamberlain advised the Board that P Martin had sent him some suggested changes, they wil take this of line and
progress. S Clif e noted that Government communication specialist S.9 (2) (a) had done a good job and felt there
were not too many changes needed. F Pimm didn’t feel that chronic care came through strongly, products are needed day
to day for some people.
The Board received and noted the CEO report and appendices.
Motion by:
F Pimm
Seconded by: B Baker
Carried:
Al present in favour
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CONFIDENTIAL TO BOARD MEMBERS ONLY
ITEM 6.0 DECISION PAPERS
6.1
Fraud Policy – annual review
J Harrison noted there were only minor changes to this review of the Fraud policy.
Motion:
The NZBS Board approved the changes as presented to the New Zealand Blood Service Fraud policy.
Motion by:
F Pimm
Seconded by: B Baker
Carried:
Al present in favour
6.2
Financial Guidelines – annual review
Clarifying the use of the Adverse Events Reserve
J Harrison highlighted that whilst reviewing the Financial Guidelines policy, he noted in section
8.8 Major Adverse Financial
Events it referenced an ‘unplanned adverse event’ which is a much broader application than just an adverse fractionation
event. The Adverse Fractionation Events policy as worded is very specific to adverse fractionation events. He suggested
NZBS needed to reposition it to being an Adverse Events policy with a broader view of policy application. The Covid-19
pandemic was considered an adverse event and if the Board were comfortable then NZBS could apply adverse event
reserve monies to this situation. If the Board were comfortable that broader access to the reserve was appropriate, J
Harrison would bring to the May Board meeting appropriate amendments to the policy, making it clear the broader extent
of policy application.
Discussion fol owed around the process to trigger the policy if the wording is changed. J Harrison noted NZBS had $7.0m
currently on term deposit of which $3.0m, would be used by 30 June 2020 and the balance of $4.0m likely required in Q1
of 2020/21 at which point NZBS would need to seek Crown assistance to restore depleted financial reserves.
D Chamberlain summarised that the organisation has some costs which are mostly staf and infrastructure costs that if we
suffer a 30% reduction in fresh product sales, the drop in revenue combined with working capital actions would adversely
financial reserves. Once we are past 30 June 2020 NZBS will potential y need to draw on the $4.0m reserve.
The policy application would be triggered on a case by case basis and it would be the Board’s decision to make, if and
when the reserve was used. J Harrison added that the current policy acknowledges this represents self-insurance so NZBS
does not go to the Crown earlier than absolutely needed. Only once the reserve was exhausted or forecast to be
exhausted, would NZBS seek financial Crown financial assistance. Communications to the Ministry with financial
implications should reference what the organisation’s financial reserves are and when they are forecast to be used. The
expectation is the reserve would be re-instated as it’s a key financial risk policy.
D Chamberlain commented that changes in the Financial Guidelines policy don’t need to reflect the above, the Adverse
Fractionation Events policy will come back to the May Board meeting as per the annual review process. J Harrison wil
make the necessary changes for the Board to review at that meeting. There was acknowledgement from Board that at this
stage the reserve was broader than just for adverse fractionation events.
It was noted that the Adverse Fractionation Events policy would be reviewed in May and wil include noting the process on
how the fund would be replenished if funds had been applied. J Harrison reiterated that it was intended the organisation
would always have some resilience built into the balance sheet financial position. The interaction of Al of Government
(AoG) support may have a bearing on how we go forward in the future.
D Chamberlain noted that J Harrison’s COVID-19 pandemic financial implications briefing paper incorporating the 30%
reduction in the forecast, indicating we can operate to 30 June 2020 without Crown assistance would be circulated to the
Board.
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CONFIDENTIAL TO BOARD MEMBERS ONLY
Motion:
That the Board:
1. reviewed the Financial Guidelines policy with the changes as presented and approved the amended
policy document.
2. Acknowledged the intent of the Adverse Fractionation Events policy was always an adverse events
policy and could be applied in a situation such as being faced with the COVID-19 pandemic. This
Adverse Events policy wil come back to May Board meeting.
3. Confirmed the Debt level ratio cap be lifted from 45.0% to 48.0%
4. authorised management to provide a copy of the amended Financial Guidelines policy to the Ministry
of Health in compliance with the Minister of Health’s stipulated requirement - let er of 29 July 2013.
Motion by:
R Lind
Seconded by: F Pimm
Carried:
Al present in favour
6.3
Treasury Policy – annual review
J Harrison advised that the cur ent financial metrics are now aligned in the revised policy and highlighted the historic rate
rollover clause as required from the December 2019 Board meeting. It was further noted that Bancorp would be
reappointed for the next 12 months. Al other changes were minor.
Motion:
That the Board:
1. reviewed the updated Treasury Policy noting the recommended changes as marked-up and approved
the updated Treasury Policy.
2. confirmed, based on management recommendation, the reappointment of Bancorp Treasury Services
for a further 12 month term to 30 June 2021, as the treasury advisor to New Zealand Blood Service.
Motion by:
J Blue
Seconded by: C Lancaster
Carried:
Al present in favour
ITEM 7.0 DISCUSSION PAPERS
7.1
Statement of Performance Expectation (SPE)
S Clif e was advised by the Ministry of Health this morning that guidance wil be sent today or tomorrow on the SOI and
SPE. There needs to be clarity around ODNZ and national agency as they will likely be on hold. The recommendation is
to wait for a couple of days, or send what we have with a caveat. The decision was to wait for advice and S Cliffe would
circulate once we have been advised.
7.2
Statement of Intent (SOI)
As above.
ITEM 8.0 GENERAL BUSINESS
S Clif e noted that she continues to liaise with the Ministry of Health and Auckland DHB around ODNZ and the development
of the national agency for organ donation.
The redevelopment of 71 Great South Road has been paused ef ective 25 March 2020. J Harrison noted that a knock-on
ef ect of this wil be with the Waikato processing move to Auckland. It was further noted that the Waikato relocation work
was also on pause.
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CONFIDENTIAL TO BOARD MEMBERS ONLY
D Chamberlain advised that the Board was supportive of management leading the organisation through these difficult
times. S Clif e added that it had not been easy and the future wil be very chal enging. This organisation had made its crisis
response plans as wel as it could at this stage.
ITEM 9.0 NEXT MEETING
The next Board meeting wil be on Thursday, 28 May 2020 at 71 Great South Road, Epsom or by video conference.
Close of Meeting: The meeting closed at 10.50am.
Certified as a true and correct record:
________________________________
David Chamberlain – Board Chairman
Note: digital signature used as these minutes were approved in the May Board video conference.
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