Since the release of the investigation report on August 31, 2018, the agency has taken the following steps:

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1 Chris Harder Director Business Oregon 775 Summer Street NE, Suite 200 Salem, OR September 28, 2018 Kate Brown Governor 900 Court Street NE, Suite 254 Salem, OR Dear Governor Brown, This letter provides a written response to your request for Business Oregon to submit a plan to you on how we will implement the recommendations outlined in a report by Perkins Coie titled Investigation Report of Business Oregon. I believe that the process of implementing our proposed plan will be an important step to address long-standing issues related to engagement, morale, trust, and culture. As Director of the agency, I am not only committed to implementing the report recommendations, but also to facilitate broader conversations within the agency to ensure we are a transparent, welcoming and effective organization. No organization is more committed to furthering economic development across Oregon than Business Oregon. We continue to drive positive outcomes in communities throughout the state, address economic inequities, and strengthen existing competitive advantages. For many in the organization, however, the last five years have brought forth significant internal change: multiple new directors and executive teams, two agency re-organizations, budget reductions, and a new comprehensive strategic plan. While this change impacted individuals and teams differently, for some in the organization it has been a time of duress and anxiety. Opportunities were missed by past and current leadership including me to manage the breadth of our organizational change, to effectively communicate the change, and to support the people of our agency, our most important asset. Since the release of the investigation report on August 31, 2018, the agency has taken the following steps: Two all-staff meetings, including one where we reviewed the proposed implementation plan. Three all-staff listening sessions to allow staff and managers the opportunity to respond to investigation findings, share concerns, and identify solutions to help move the agency forward. Listening sessions were facilitated by me personally. Non-management employees convened to provide input into the implementation plan and outline broader agency considerations, including: fiscal transparency, key decision-

2 making processes, organizational effectiveness, agency culture, performance and accountability expectations, investment in staff, and agency values. A cross-agency workgroup was formed consisting of non-management staff representatives from each of the agency s thirteen functional teams, four members of our Management Leadership Team, and Executive Team to draft our plan to implement the report s recommendations. Workgroup discussions were facilitated by an expert from the Department of Administrative Services Workforce Solutions Team. In addition to our internal process, I sought and received feedback on our proposed plan from several peers: Colette Peters, Director of the Oregon Department of Corrections; Margaret Salazar, Director of Oregon Housing and Community Services; and Madilyn Zike, Oregon Chief Human Resources Officer. The following plan is an initial step. While the plan is a blueprint for how we intend to improve as a work community through tangible actions, it does not necessarily represent all we will do over the coming years to build trust, increase engagement and transparency, and improve morale and culture. I am committed to working alongside staff and management to continuously assess the needs of the organization, remain adaptable, and even refine our approach should that be best for the agency. Thank you for considering our implementation plan. I look forward to discussing the proposed plan with you and your team. Sincerely, Chris Harder Director

3 Investigation Report Recommendations Proposed Implementation Actions The following is a plan of action for Business Oregon to improve engagement, morale, trust, and culture at the agency following a set of recommendations outlined in an investigative report by Perkins Coie. Some of these actions will be implemented immediately, while others are longer-term efforts. Business Oregon is in the process of forming a project management team consisting of non-management and management employees to oversee the successful implementation of the recommendations. Adjustments to timelines and milestones will be considered if recommended by the project management team. 1. Report Recommendation: Director Harder, the executive team, and other members of management should receive management and communication training to promote an inclusive and professional workplace. a. Participate in Department of Administrative Services Office of the Chief Human Resources Office (DAS-CHRO) Foundational Training Program for managers. The eight-session program covers key topics such as building trust, motivating employees, communications, coaching and professional development, performance management, addressing conflict, and recruiting and hiring. b. Identify and deliver an in-person respectful workplace training series for all employees that will include topics such as discrimination, harassment, and creating a welcoming and inclusive work environment, among others. This training is an expanded series that is addition to the required DAS online respectful workplace training. Eight sessions will be delivered to management beginning in December of 2018 and completed in July Finalize scope and schedule trainings by November 2018; all employees complete training by summer of Report Recommendation: Director Harder and upper management must take on a greater leadership role with respect to improving low employee morale and providing direction for the agency. Staff should also be invited, on a regular basis, to provide feedback concerning their working environment, whether in the form of anonymous questionnaires or surveys, complaint line, town hall meetings, or some other method. a. Establish an Employee Engagement Committee (membership to include non-management and management employees) to serve as a centralized vehicle to bring opportunities, issues, and concerns to the organization as they relate to communication, morale, and trust. b. Using an outside expert/facilitator, initiate an agency-wide in-person engagement process to better understand and identify root causes impacting long-term morale, trust, and communication. c. Develop an internal communications plan to complement the agency s external communications plan. The internal communications plan will focus on agency-wide expectations, tools to facilitate improved engagement and clear communication pathways for internal functional groups. Establish the committee by end of October Finalize charter and scope by December Date to be determined by the employee engagement committee that will develop RFP. In progress with plan, including staff feedback, complete by February 2019.

4 d. Use the existing work of Business Oregon s Diversity, Equity & Inclusion (DEI) Council to serve as a conduit to help create a more welcoming and inclusive workplace culture. e. Engage the DEI Council and newly formed Employee Engagement Committee to identify opportunities to better apply our stated values (accountable, agile, collaborative, respectful, and innovative) to our work, our colleagues, and on behalf of those we serve. Already in place and ongoing. Launch immediately and ongoing. 3. Report Recommendation: Key agency decisions should be made with greater involvement of staff and increased communication and transparency. a. Develop charters for Executive Team, Management Leadership Team, and agency subcommittees to clarify decision-making scope, roles, and responsibilities. Develop team agreements between these leadership groups and with the broader organization to improve communication. b. Launch Director s message to provide an overview of Executive Team discussion topics/agenda items. c. Launch a quarterly Director s Forum to better engage staff on agency-wide decisions, program opportunities, and initiatives In progress. Final charters approved by spring Launch immediately. Deliver twice a month. Ongoing. Launch immediately and ongoing. 4. Report Recommendation: Strengthen the role and function of Human Resources as an employeeprotective arm within the organization, and improve the complaint-and-investigation process through training of human resources staff and management in conducting effective investigations and providing appropriate responses or disciplinary action, which would include training on communications to those involved about progress and outcomes. a. Fully staff the Employee Services team to better support their employee advocacy role and delivery of broader human resources, facilities, safety, and wellness activities. b. Employee Services staff will continue Department of Justice (DOJ) trainings related to conducting effective workplace investigations. c. Work with DAS-CHRO and DOJ to develop a complaint and investigation flow-chart to better communicate to staff standard processes and expectations (actions, time frames, rights, etc.) by type or category of complaint. Immediately, hiring process has been initiated. Recent trainings attended by Employee Services staff. Staff to attend Attorney General s Public Law Conference in October Complete by January Report Recommendation: The division of work and responsibilities between the RDOs and RPMs should be reevaluated with participation and feedback from all affected employees. a. Staff from the Regional Development Team and Economic Development Division leadership will review RDO/RPM position duties, roles and responsibilities, and broader team workflows. Launch immediately and ongoing.

5 b. The Economic Development Division will revisit existing Lean principles and processes to better understand impact of the re-org on efficiency and customer service delivery. By summer Report Recommendation: Implement a plan to regularly and consistently perform annual performance reviews, including upward 360 appraisals of managers and supervisors by employees they manage. a. Immediately implement the new DAS Workday system when it is released, including adopting the new processes and practices of the system, including tools and resources for annual performance evaluations. Implementation will include appropriate training across the agency. b. Review and study best practices related to 360 appraisals. Identify an approach and tools best suited for the agency. Immediately implement Workday performance evaluation process. If Workday is delayed past December 2018, the agency will move forward with consistently applying our current process. Evaluate options in FY Implement FY Report Recommendation: Given the importance of the Operations & Finance Assistant Director position and overall role within the agency and the Salem office, careful thought and consideration should be placed in selecting Rodamaker s replacement. a. Prioritize recruitment of new AD for Operations & Finance position through an open and competitive process. Ensure a diverse selection committee including internal (management & non-management) and external stakeholders. In progress. Post recruitment in fall of Report Recommendation: Provide employees with clear expectations and paths for career growth and professional development. a. Work with DAS-CHRO and other state workforce partners/stakeholders to review and more formally identify career development pathways within the agency. b. Develop guiding principles on when to under fill open positions or provide work-out-of-class opportunities to backfill open positions to create better career ladder opportunities. Align with DAS-CHRO coordination. c. Using new Workday system, include development of Individual Development Plans (IDPs) as part of the agency s annual performance evaluation process. Include opportunities for training, professional certifications, mentoring, cross-training, and job rotation opportunities. d. Identify opportunities for staff and managers to attend trainings, like the annual NW Economic Development Course or NW Community Development Institute courses, or other best-practices economic development training. e. Develop internal succession plans for key management and leadership positions. Begin evaluation by summer Begin evaluation by summer Development of framework by the summer of Training by FY Immediate and ongoing. Informational meeting with DAS- CHRO on Oct 29. Next steps to be determined.