Governance and DSF Funding Criteria

The DSF Board will adopt the following:

(a) a mission statement and long term strategy and plans for the DSF;

(b) detailed rules and procedures for the functioning and governance of the DSF Board and each Subcommittee that are consistent with this Schedule 3;

(c) detailed eligibility and selection criteria for Projects and Programs to be funded by the DSF which will take into account (among other things) government policy and planning, the long-term development trajectory of the OT Project and the Parties’ joint vision for long-term sustainable development (DSF Funding Criteria); and

(d) together with the Relationship Committee, the DSF Protocol.

There will be no disbursement from the DSF to any Project or Program until the DSF has been established in accordance with clause 8.1 of this Agreement with a Charter that is agreed by the Parties and each of the documents referred to in this paragraph 6 of Schedule 3 has been adopted
by the DSF Board.

DSF Board meetings will be held quarterly, and more frequently as required.

Persons who are not DSF Board Members may attend meetings by explicit agreement of the
DSF Board.

Relationship with the Relationship Committee

The DSF and the Relationship Committee will have a close but independent relationship. The Relationship Committee will provide recommendations to the DSF and assist the DSF to develop a five-year strategy and a three-year rolling plan that complement the government plans of
Umnugobi Aimag and the Partner Communities. There is no restriction on individuals being members of both the Relationship Committee and the DSF Board, provided that, at any time only one OT Representative and one Community Representative may be a member of both the Relationship Committee and the DSF Board.

Meetings of the Relationship Committee and the DSF Board will be held on a complementary cycle, with at least one month between respective meetings, to allow items to be referred from one body to the other and responded to before the succeeding meeting.

DSF Executive Director

The DSF Board will appoint the DSF Executive Director who will have the responsibilities and will be authorised to act within the scope of responsibility and authority determined by the DSF

Board and set out in the service agreement entered into by the DSF Executive Director and the DSF Board.

Custodial Trustee

The Custodial Trustee is independent, is funded by the DSF and attends DSF Board meetings to promote governance and support compliance with this Agreement.

DSF Reviews and Reporting

Annual financial reports will be prepared by the DSF Executive Director, sent to the Relationship Committee, be publically reported and subject to annual financial audits in accordance with clause 8.8 of this Agreement. At the direction of the DSF Board, the DSF

Executive Director will prepare and promulgate materials that promote the purpose, availability and achievements of the DSF.
Every three years, an external evaluator selected by the DSF Board will assess both the operation of the DSF and the success of the Projects and Programs funded by the DSF in meeting the stated objectives of the DSF. The DSF’s success will be measured against the DSF’s mission
statement and long term strategy and plan adopted in accordance with paragraph 6(a) of this Schedule 3.

Every six years a strategic review of the DSF will be undertaken by the DSF Board and the DSF Executive Director who may include external advisers in that review process. The strategic review will consider the level of funding, the DSF's objectives for the next six years and the
strategy for meeting those objectives.