TrueNorth Companies | Annual Report 2019

SOUND UNWAVERING DIRECTION ANNUAL REPORT 201819 2019

PROFIT WILL DETERMINE WHO EXISTS. TECHNOLOGY WILL DETERMINE WHO COMPETES. QUALITY WILL DETERMINE WHO GROWS. PEOPLE WILL DETERMINE WHO WINS. - TrueNorth Founding Principals, 2001

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GREETINGS. Thank you for taking time to review our 2019 annual report. Knowing your time is valuable, we have made every effort to ensure the content on these pages is valuable, relatable and serves to benefit your goals and aspirations.

As you’ll see, 2019 was filled with initiatives that reaffirmed our commitment to stay the course as a privately held risk management and insurance brokerage service provider. When we launched the One TrueNorth movement in late 2018, we knew it was time to double down and honor the value of connection. In early 2019, we were blessed to hear a phrase, “connection generates power.” This has become a rally cry for our colleagues as we continue to chart the course for TrueNorth.

This report pays tribute to our valued partnerships and accomplishments as we near $100 million in revenue and over $1 billion in sales. But much like so many of the industries we serve, we recognize that the game is changing; in 2019, the insurance industry announced over 650 acquisitions, leaving less than 10 privately held risk management and insurance brokerage firms in the $100+ million revenue range.

Jason Smith

Humbled by how far we’ve come and fueled by a commitment to remain closely and privately held, we meet a new decade with energy and purpose.

In a fast-paced world loaded with complexity, we find confidence and strength in knowing who we are and that we can count on each other to bring value to our clients, colleagues and communities as One TrueNorth. We sure hope you do too!

With Drive,

Jason Smith, President & CEO

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BASED ON BUSINESS METRICS, TRUENORTH IS

1 of 7

PRIVATELY HELD INSURANCE AGENCIES IN THE UNITED STATES WITH OVER $100M IN REVENUE. Insurance Journal

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When making financial decisions to support your business or family, your risk management and insurance program should accomplish two things: • First, it should offer a sense of security and peace of mind.

• Secondly, it should support your aspirational goals.

Upon engagement, many clients are convinced that one is only achieved at the expense of the other.

At TrueNorth, we set out to prove them otherwise.

To us, our clients are our future. We strive to bring you value because ultimately, our engagement funds and fuels our livelihood, influences our brand, and challenges our teams in ways that make us better.

Without the client, we do not have a business of our own to protect and maximize, which then threatens each colleague’s ability to achieve personal and professional security and growth. Everything TrueNorth does and stands for ultimately hinges on providing you value.

To provide a solution, you must first understand the problem. At TrueNorth, we do this by creating partnerships, offering industry insight and creating solutions that extend well beyond an insurance policy.

In the following pages, we aim to show you how we conduct business and generate value.

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Solutions designed to grow your business and optimize your workforce.

In today’s economy, organizations like yours are forced to compete for quality talent at record-low unemployment levels. As such, the investments you are currently making to attract and retain top talent have never been more important.

Insurance is frequently purchased with the intention of never using it – health insurance is uniquely different in that not only will the policy be used, it will be relied on by virtually every employee participant and family member enrolled on your company plan.

We live in an era where organizations of all shapes and sizes are expected to do more with less. Today’s business owners and decision makers face the daunting task of balancing financial goals and aspirations against the cost of supporting a healthy and productive workforce.

This is where our team can assist: TrueNorth believes that well-designed benefits plans can strike harmony between these initiatives – enhancing company culture and propelling a business forward by educating employees on how to be intelligent plan consumers and adopt healthy habits.

To navigate a complex, heavily regulated and costly benefits landscape, we have created a suite of extended

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In 2019, the unemployment rate in the United States averaged the lowest it’s been since 1969.

We are here to support your organization’s quest for a positive and productive workforce and help you do more with less.

services and resources that are Workforce Solutions.

This suite of capabilities is designed to offer value beyond the policy, leveraging your investment and reinforcing your benefits plan.

Did you know?

For many organizations, it We now offer a CFO & is hard to financially justify adding to your HR team; as a HR Dashboard to help businesses manage result, human resource roles often serve as generalists, financial performance solving for any number of of their offerings, in workforce issues. TrueNorth’s conjunction with the Workforce Solutions acts as impact the offerings an extension of their team, actually make on leveraging talent, technology their workforce. and sophisticated tools to support human resource initiatives and deliver the bandwidth they deserve. Our platform allows you to invest fractionally and gain access to powerful tools and comprehensive resources that support the talent you already have.

At TrueNorth, we’ve always believed that people will determine who wins. By sharing our expertise, technology, project management and support tools, we can take workforce issues from frustration to competitive advantage.

At FOLIENCE, we truly value our partnership with the TrueNorth team and what they bring to our business.

They are talented, smart, strategic and always responsive to our needs.

Cathy Terukina, Executive Vice President Folience

The TrueNorth team has done so much for FEIEREISEN over the years. When I think of TrueNorth, the words ‘above and beyond the expected’ are never far from mind.

Greg Ortmann, President Feiereisen, Inc.

As Eastern Iowa’s largest agricultural supplier, STUTSMAN works hard to balance the needs of our growing business with the values we hold as a family-owned company. TrueNorth understood this from the very beginning. By applying their benefits philosophy, we have been able to design a plan that reflects our aspirations to grow and supports the health and wellbeing of every single Stutsman employee and their family.

Scott Szymanek, President & CFO Stutsman

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Consider this: if an organization could accurately predict zero claims in the coming year, there would be no need to purchase insurance.

Unfortunately, it is difficult for most organizations to confidently make that assumption.

When it comes to claims management, we tend to see businesses fall along a continuum – at one end, businesses lack control over claims and aspire to reduce them. At the opposite side, these businesses have a firm grasp on claims and little interest in insurance. TrueNorth delivers change to businesses that find themselves somewhere in the middle.

Ultimately, our clients want to know they are covered in the event of a loss, and that coverage is due to implementing a predictable risk finance methodology.

At TrueNorth, we accomplish this by focusing on four specific areas: Risk management processes, risk reduction processes, risk finance, and claims advocacy.

This approach redefines the scope of traditional insurance.

We aspire to work with you to elevate insurance from a mere purchasing exercise to a strategic approach to financing risk. We do this by introducing tools and solutions to confront exposures and manage claims. When companies have more control, they can broaden their risk finance options, which in turn, protects their balance sheet

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attendees joined in our inaugural “Claims & Safety Summit” in 2019, to collaborate on ways to improve safe work culture and environments.

and safeguards their income statement.

Within a strong risk management culture, every employee feels responsible for safety, going beyond the call of duty to identify unsafe conditions and behaviors and intervenes to correct them. Over time, an organization’s norms and beliefs evolve from merely eliminating hazards to eradicating unsafe actions by building systems to proactively improve risk management outcomes. Employee Did you know? engagement spurs an Every other year, we enterprise-wide process that fuels and fosters safe behavior. invite insurance carriers from across This shift is paramount to the country to discuss achieving a position of control market trends, in an overall risk management foster relationships, strategy. It requires vision, and share best leadership, measurement and recognition at all levels of the practices. As a result, our clients receive organization. TrueNorth’s the most current and risk management process is designed to deliver the innovative protection structure, insight and for their businesses, guidance required to propel personal assets and your business forward. most cherished relationships.

In the 70 years we’ve been in business, D.C. TAYLOR CO., has built our reputation on delivering quality service and putting our employees’ safety first. As our company evolves and we take on new challenges, partnering with TrueNorth’s team of specialists will help us reach financial goals and continue to invest in our award-winning culture of safety.

Brent Taylor, President D.C. Taylor Co.

As the nation’s 13th largest nonprofit health system, we had aspirations to evolve from simply buying insurance on an annual basis to effectively managing and financing risk. UNITYPOINT’S vision is to provide the best outcome to every patient, every time – we believe this is how an enterprise risk management program should also perform. Guided by our mission to improve the health of people and communities we serve, we can count on TrueNorth’s support to implement a system-wide risk management program so we can dedicate our time and talent to what matter most: our patients.

Matthew Kirschner, Vice President of Treasury UnityPoint Health

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We proudly serve enterprise level motor carriers and logistics providers, and tens of thousands of independent trucking professionals across the country. We are also proud that over the past five years, our client base has grown by more than 15% each year.

Offering industry insight and direction in unmarked territory.

2019 was a challenging year for the transportation industry. From an insurance perspective, we continue to see significant hardening in the marketplace – less insurers, constrained coverage options, and higher rates.

Rampant litigation resulting in “nuclear verdicts” against transportation companies is compounding the pressure on the marketplace. As we look ahead, the transportation industry will continue to face more national and global uncertainty.

To say these are interesting times for logistics companies is an understatement; this series of events has forced TrueNorth to lean into our mission statement, “to assist our clients with protecting and maximizing their assets, resources and opportunities” by creating tools and solutions that help them navigate the current climate.

In the wake of this uncertainty, we have joined forces with the American Trucking Association, Scopelitis, and other notable insurance markets and state associations to organize our efforts around tort reform and other issues negatively impacting the industry.

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In 2020, we are well-positioned to tackle difficult problems and keep America’s wheels turning.

We are energized not only by the challenges we face, but also by the wealth of opportunity we are presented with to deliver on the client experience as respected industry experts.

Did you know?

Independent Advantage platform Our

protects and serves more than 43k drivers, 50k trucks and 45k contractors in 49 states across the country!

J & M TANK LINES values a strong safety and family-oriented culture.

We believe that a load of freight is not worth near the cost it would be, not to get that driver home safely as well as others on the roadway. TrueNorth matches our core values, which played a major role in adding them to the J & M family in 2019 after relations since 2015. TrueNorth was diligent about showcasing what they could bring to the table, in helping us think about and manage risk a different way.

As part of the J & M family, TrueNorth continues to build trust by delivering upon their commitments and we expect to have them as part J & M operations for a long time to come.

Harold Sumerford Jr., CEO J&M Tank Lines Growing an industry requires leaders... those willing to step off the line and take initiative. TrueNorth is one of those leaders, compelling others to do the same.

And that’s what it takes to win in today’s environment.

Chris Spear, President American Trucking Associations (ATA) As JB HUNT TRANSPORT, INC. has increased our Final Mile footprint across the last two years, True North’s involvement has been critical.

Their development and administration of the risk transfer program in this space has provided opportunities for continued growth with peace of mind a challenging environment. Their expertise is also evident in their commitment to service on our IC platform where their dedicated professionals seek out solutions that fit our business needs. From program structure to administrative tools and third party training applications they always have the management of our risks in their sights.

Eric McConnell, Vice President of Risk Management JB Hunt Transport, Inc.

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A sophisticated approach to individual and family risk.

TrueNorth’s Private Client Group creates tailored plans to meet the needs of successful business leaders and their families.

Asset accumulation can heighten personal risk and create administrative burden. If these exposures are not properly addressed, they can impact your family’s lifestyle and jeopardize future plans. TrueNorth’s Private Client Group offers proactive, concierge-level service to manage wealth and protect assets among families, across LLC’s and trusts, or distributed across multiple locations.

The team of professionals behind TrueNorth’s Private Client Group are committed to supporting your personal aspirations and maximizing your investments for generations to come.

Did you know?

TrueNorth works closely with family offices and is an active member of the Family Office Exchange. We also have affiliations with risk management services that address client needs on a global scale.

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My 20-year-old was in an accident a few days ago. While it was a very traumatic experience, everyone is okay. Upon reviewing our auto policy online a few hours after the accident, I was overcome with relief.

I looked up at my son and in tears, I said, ‘Don’t worry, son.

Elaine has taken good care of us. The policy looks like we are well taken care of.’

Seeing his confusion, I explained that Elaine is our personal insurance partner at TrueNorth and that she guided our family to the appropriate insurance coverage. In the midst of a turbulent and emotional experience, I was filled with a sense of gratitude and security because of Elaine Pearlman’s expert knowledge and care.

Thank you.

William (Bill) Sanders, CPA VP Business Affairs & CFO Kohl Children’s Museum of Greater Chicago

Introducing First MainStreet Insurance, the spirit of small with the power of scale.

The founders and many current leaders of TrueNorth come from small town roots and humble beginnings. In today’s fast-paced world, we realize many organizations that currently play an important and valuable role in their communities could be left behind. In response, we are proud to announce that First MainStreet Insurance offers TrueNorth’s powerful suite of products, services and expertise; but is built to support, enrich and foster a sense of community in small communities throughout the country.

In 2019, TrueNorth formed First MainStreet Insurance.

Built with the local agency in mind, First MainStreet Insurance operates as a separate business unit and brand apart from TrueNorth. The platform is designed to perpetuate the legacy of local agencies through strategic mergers and acquisitions.

The brand’s close affiliation with TrueNorth will also enhance client offerings while preserving the agency’s autonomy and influence within these small, closely-knit communities. In 2019 alone, First MainStreet Insurance integrated eight agencies, totaling 13 unique locations throughout the Midwest. 2020 promises even more opportunity from this unique platform fueled by our commitment to business perpetuation.

For years, the CITY OF INDIANOLA has valued the partnership and expertise that our local insurance broker, Weinman Insurance, has provided. Working with advisors who know and care about the city’s employees and citizens gives confidence that our best interests are always considered.

In 2017, when TrueNorth Companies partnered with Weinman Insurance, we were excited to gain access to resources and tools brought by a Top 50 insurance broker.

We were able to continue our relationship locally, while expanding how the city manages risk.

Melissa McCoy, Director of Human Resources City of Indianola, Iowa

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Personal Lines Day at the Kernels

Feed My Starving Children | Chicago Preparing meals for children in impoverished countries.

Producer Retreat, 2019

TrueNorth’s Colleague & Family Summer Celebration

Carrier & Market Roundtable Ugly Holiday Sweater Day Cedar Rapids

Zach Johnson Foundation Golf Outing

Trent Tillman & Duane Smith, EntreFest Legacy & Succession Planning Panel

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Brent Matthews & Dan Cook, National Accounting & Finance Council

OUR

COLLEAGUES.

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COLLEAGUES.

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With the One TrueNorth movement, TrueNorth has made a commitment to our colleagues.

As an employer, we aspire to provide vision and instill confidence in our colleagues to grow and succeed. By embracing this movement, we are investing in an organization that allows our people to find joy in their work and an opportunity to discover and focus on their passions.

...TO LEAD IS TO DEFINE A

When you work at TrueNorth, you are a part of something greater, and we encourage a culture that empowers our colleagues to live out their purpose and carry the movement forward.

SHARED INTEREST.

COMMON PURPOSE

THAT TRANSCENDS INDIVIDUAL SELF-INTEREST TO AN ORGANIZATION’S Gary Burnison

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We aspire to provide vision and instill confidence in our colleagues to grow and succeed.

“One TrueNorth” isn’t a fleeting thought or a short term campaign. It’s a movement. It’s a shift in thinking that impacts how we do business with our clients, how we interact as colleagues, and how we achieve our goals.

At our all-colleague event in July, each of us signed a pledge to affirm our commitment to the One TrueNorth movement. We committed to working together to preserve the legacy company and carve a path forward for each and every colleague, regardless of role, tenure or location.

Our signatures were collected and placed over the One TrueNorth emblem on a piece of artwork that symbolizes our firmwide promise. While the original artwork is on display at our headquarters in Cedar Rapids, each office has this symbol of connection proudly displayed, as well.

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I see One TrueNorth in my leadership with the philanthropy team. We are continuing to work diligently to share best practices and keep all offices involved while making sure the money we raise supports the communities where we live and serve.

EMILY CRONIN

SINCE 2016

TrueNorth is my extended family, I care deeply for my teammates and friends that I have made within this organization. It’s about helping others in whatever way that I can by looking for ways to improve the lives of colleagues, clients, company partners, business partners and community members.

TERI RSTOM SINCE 2000

One TrueNorth to me, means more than a brand or company but an actual community. From community outreach to everyday greetings with fellow coworkers, you always fit in and feel like you’re making a difference, no matter your role.

Everyone working together, using our best resources to most effectively and efficiently do what is best for our client. Due to our combined efforts, we lift each other to be the best we can be and in the end, we exceed our clients’ expectations.

BOB KOLLSMITH SINCE 1999

As an employee that came from an acquisition, One TrueNorth has been a positive force to remove the barriers that existed when I first came here in 2017. It reinforces the idea that success in a specific area or profit center benefits the whole Central Iowa Team and therefore the Company as a whole.

PAUL VEATCH SINCE 1999

JADE TAMAYO SINCE 2019

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AWARD WINNING WORK 0 P/C Age 10

y nc

Top

REGIONAL & NATIONAL ACCOLADES

2019

2019

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#34, INSURANCE JOURNAL (2018, #50) #49, BUSINESS INSURANCE BEST BUSINESS INSURANCE BEST BUSINESS LEADER, DUANE SMITH 2019 AGENCY OF THE YEAR, WESTERN NATIONAL INDIVIDUAL ACCOLADES

Jason Smith

Duane Smith

Tracy Schulte

Kevin Welu

Courtney Jannsen

Meghan Erhart

Jason Smith, #7 Most Influential Person in the Corridor, Corridor Business Journal Duane Smith, Howard Hall Excellence in Business Award, Cedar Rapids Metro Economic Alliance Duane Smith, #1 Most Influential Person in the Corridor, Corridor Business Journal Tracy Schulte, TrueBlue Award Winner of the Year, TrueNorth Companies Kevin Welu, Distinguished Service Award, Coe College Courtney Jannsen, Scholarship Recipient, The Council of Insurance Agents & Brokers Association Meghan Erhart, Leadership for Five Seasons 2019 Graduate, Cedar Rapids Metro Economic Alliance

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In 2019, TrueNorth hosted the largest summer intern class to date, expanding the program with one working in a regional location.

•

With 16 total interns, the group was tasked with two corporate projects, looking at both TrueNorth’s motivation and recognition programs, as well as the onboarding process. They presented their ideas to our leadership team in the final weeks of the program. Aside from their corporate project work, our interns are engaged, responsible and integrated into teams across the firm. a r n • G ro w

In 2020, we intend to expand the program into more TrueNorth locations, furthering our investment into the next generation of professionals.

Did you know?

According to Inc. Magazine, by 2020 Millennials (those born between 1980-2000) are forecast to comprise half of the American workforce.

Intern Class of 2019

Of all the things I learned while at TrueNorth, the most valuable skill I developed was thinking critically and working intentionally. By the end of my internship, I started to think differently and found new ways to approach a problem.

I’m excited to develop these skills further, and apply it to my work in college and my professional career going forward.

Robert DiCosola Business Development Intern ‘19

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WHAT YOU DO HAS FAR GREATER IMPACT THAN WHAT YOU SAY. Stephen Covey

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The three firms that originally founded TrueNorth had many things in common.

One of the most important threads was how rooted each were in the community.

Today, many TrueNorth employees serve their communities by electing to participate in philanthropic committees, sit on nonprofit boards, serving in formal public service capacities and actively volunteer their time and talent.

It’s these individual efforts that ultimately support TrueNorth’s passion to make an impact, on both a local and national scale.

PROGRESS IS POSSIBLE WHEN GOOD PEOPLE MOVE FROM

IDEAS TO ACTION. Ginneh Baugh

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As we reflect on 2019 it’s hard to believe that we are entering 2020 and nearing completion of our 2020 Vision goals and objectives that we set out to achieve back in 2011. What seemed like such aspirational objectives are reality for us today.

As we put forth our efforts day in and day out, we also continue to have a lens on the future. In an era where generationally led Top 100 Insurance Brokerages are being acquired we are committed to staying our course:

Bill Teubel

By the Numbers

Closely held, privately held, distributed ownership, invested in our Clients, Colleagues, Communities, perpetuating from within, and not for sale.

Colleagues in 2011: 126

We are energized by these commitments and inspired by what the future has in store. 2019 was a prideful year for TrueNorth, and we entered 2020 poised to achieve the 2020 Vision we established back in 2011. 2020 also marks a time where we are afforded the opportunity to chart our course to 2025, 2030, and beyond. We look forward to sharing those goals and aspirations with you as we navigate together.

Targets in 2020

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Bill Teubel Chief Financial Officer

Colleagues in 2019: 390 Owners in 2011: 30

Owners in 2019: 60

Topline Revenue: $100.5M Colleagues 2020: 449 Specialties: 20 Regional Offices: 23 14 FMSI/9 TrueNorth

FIND US HERE REGIONAL GROWTH

Lane Danielson, Ames Office Ribbon Cutting

Welcome to TrueNorth, located in Arlington, Texas!

Grand opening of TrueNorth in Rosemont, IL

Move in day!

TrueNorth Team, Arlington Texas

Collaboration space in Rosemont, IL

Making moves regionally.

We are fueled by our mission to assist companies and people by protecting and maximizing assets, resources and opportunities - and have expanded our footprint so we can better serve our clients across the nation.

In that spirit, in 2019, three of our offices moved to new locations to offer a consistent experience for clients, a healthier environment for our teams, and room for future growth. From polished meeting rooms with upgraded technology, fresh paint and pride for our brand, we were excited to celebrate ribbon cuttings and reopenings in Arlington (TX), Ames (IA) and Rosemont (Chicago, IL).

Did you know?

TrueNorth’s footprint includes

9 locations in 5 states

(Colorado, Illinois, Iowa, Michigan, Texas) along with individuals located in satelite offices across the nation!

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TrueNorth donated 13 Violins to an Elementary School in Colorado.

Loren Coppock

By volunteering our time, talent and treasure, we are sharing our prosperity with others and setting an example for other businesses to do the same.

There is an overwhelming sense of joy that comes with offering assistance and empowerment to someone in need.

In this spirit, we strive to be an example of generosity and consider these philanthropic efforts vital to TrueNorth’s brand. We believe that cultivating a reputation as a generous community partner is far more impactful than any billboard or promotional campaign.

Since 2001, our community outreach efforts have evolved, but continue to demonstrate what good we can accomplish when we collectively focus our energy and advocate for a local nonprofit. Through their persistent fundraising efforts, our internal committee members shed light on the community’s needs and organize opportunities for our

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firm to work together to bring support and solutions to the most fragile and vulnerable among us. They lead our attention to the right places and for that, we are very grateful.

In 2020, we intend to advance TrueNorth’s community leadership program, making it easier for employees to engage as One TrueNorth and impact local causes throughout the country. Reinvestment in each other, our communities and our clients.

Loren Coppock Chairman, Founding Principal

When we invest in our communities and industries, we not only impact the lives of those around us, we strive to build healthier communities that are attractive to the future of our workforce.

‘Bark & BBQ’ K9 Fundraiser, Cedar Rapids

Harvest for the Hungry, Chicago

Intern Volunteer Project

Go Red for Women

School Supply Drive, Colorado United Way Campaign 100% Announcement, Cedar Rapids

Zach Johnson Foundation Golf Classic

Big Brothers, Big Sisters Cedar Rapids

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We are so proud of the One TrueNorth movement because it channels a powerful connection that exists between our clients, colleagues and communities and has heightened our sense of clarity for the future of TrueNorth.

In an industry that is built to react to the complexities of our ever-changing world, we garner confidence in the stability of things that remain the same. The following will stay true as TrueNorth prepares for 2020 and beyond: The client is our future. The client guides us. They fund our livelihoods, influence our brand, challenge us in ways that make us better, and they trust us to support them. Without the client, we do not have a business of our own to protect and maximize.

In return, we will make every effort to understand and invest in our clients. Put simply, we exist to support them on their journey.

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TrueNorth’s number one asset is its people. They drive TrueNorth. They get the job done. Our people consistently deliver innovative solutions and implement advanced methods.

We will continue to invest in our colleagues because we aim for TrueNorth to be a colleague’s final career stop. People will determine who wins.

We are proud to invest in our communities. We aim to bring value to everything we do. Whether that be by participating on boards or committees or through events or sponsorships.

We will volunteer, steer, lead, fund and influence because relationships are reciprocal in nature, and we must give in order to receive.

In 2020, you can count on our commitment to staying the course. Our aspiration is to bring confidence, deliver solutions and support results.

Let’s chart the course together.

Duane Smith Executive Chairman

Jason Smith President & CEO

Š 2020 TrueNorth Companies, L.C. All rights reserved.

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