Export Credit

President of the Treasury Board releases review of Crown Corporation governance

Canada News Wire Group
February 17, 2005

In a move that will see more Crown corporations fall under the public
eye, Treasury Board President Reg Alcock has announced reforms to
expand the Access to Information Act.

 

Ottawa: Reg Alcock, President of the Treasury Board, today tabled in the House of Commons a report entitled “Meeting the Expectations of Canadians ‚Äì Review of the Governance Framework for Canada’s Crown Corporations.

“This report reflects extensive consultations within government,
with CEOs and Chairs of Crown corporations, federal deputy ministers,
their provincial counterparts and private sector leaders,” said
Minister Alcock. “It identifies more than 30 measures to strengthen
oversight, management and accountability and to increase transparency
in Crown corporations, while at the same time respecting the autonomy
and arms-length relationship of Crown corporations with Government.”

The measures detailed in the review are aimed at:

 

  • Clarifying the relationship between Ministers and Crown corporations;
  • Clarifying the accountability regimes of Crowns corporations;
  • Making the appointment process more transparent;
  • Bringing the governance of Crown corporations in line with reforms in the private sector;
  • Strengthening the audit regimes in Crown corporations, and
  • Making the activities and operations of Crown corporations more transparent.”The review is the most comprehensive review of Canadian Crown
    corporation governance in 20 years,” said Minister Alcock. “It goes
    well beyond questions that had been raised by the Auditor General in
    her recent examinations of the management of Crown corporations and
    positions Crown corporations to excel as models of good governance.”As public institutions, Crown corporations strengthen the economic,
    social and cultural fabric of Canada. They are integral to the
    government’s delivery of programs and services to Canadians.

    The President of the Treasury Board launched the review of Crown
    corporation governance on February 10, 2004, as one of a series of
    initiatives to strengthen transparency, accountability and management
    across the federal public sector.

    The Review of the Governance Framework for Canada’s Crown
    Corporations is available on the Treasury Board Secretariat Internet
    site at www.tbs-sct.gc.ca.


    Backgrounder


    The President of the Treasury Board launched the review of Crown
    corporation governance in February 2004, as one of a series of
    initiatives to strengthen transparency, accountability and management
    across the federal public sector.

    The review is the most comprehensive examination of Crown
    corporation governance in over 20 years. It goes well beyond questions
    raised by the Auditor General in her recent examinations of the
    management of these institutions.

    The objective at the heart of the review was to improve the
    effectiveness of the current governance framework, in order to ensure
    that the programs and services delivered by Crown corporations respond
    to Canadians’ interests and needs, as well as meet Canadians’ standards
    and expectations for ethical conduct and operations for all public
    institutions.

    The government also wished the review an action plan focusing on practical measure that could be implemented quickly.

    Six broad conclusions were reached during the course of the review:

  • There is a need to reassert the role of Crown corporations as instruments of public policy.
  • The accountability regime for Crown corporations requires clarification and strengthening
  • The
    appointment process for chairs, chief executive officers (CEOs) and
    directors can be made more professional, more transparent and faster,
    building on the interim process established by the government in March
    2004.
  • Boards of directors need to be better equipped to fulfill their stewardship responsibilities.
  • The
    internal governance regime for Crown corporations should keep pace with
    best practices, including those from the private sector where
    applicable.
  • A greater degree of transparency should be brought to the activities and operations of Crown corporations.In response to review findings, thirty-one measures have been
    formulated to strengthen governance, accountability, transparency, and
    management. Key measures include the following points:
  • To improve the communication of public
    policy objectives to Crown corporations, the responsible minister will
    periodically issue a statement of priorities and accountabilities to
    Crown corporations within his or her portfolio. The statement will be
    discussed beforehand with corporate management and the Board and will
    form the basis for a periodic review of the corporation’s performance.
  • The government will enact the legislative changes required to ensure a split in the positions of CEO and chair of the Board.
  • The government will require that boards of directors for all Crown corporations establish an audit committee.
  • The
    committee will have the required expertise, and will assume key
    responsibilities for oversight of financial statements, internal
    controls, internal and external audit, and risk management.
  • With
    respect to the appointments process, selection criteria, Board profiles
    and calls for nominations will be made public, including through the
    Web sites of the government (for chairs and directors), and Crown
    corporations (for CEOs).
  • The
    selection process for the CEO will be determined by the Board of
    Directors and will include, at minimum, advertising in either or both
    the Canada Gazette and the corporation’s Web site.
  • The
    government will obtain references on all candidates for appointment as
    director or chair. In the case of CEOs, the Board’s nominating
    committee will be required to do the same for any candidate it submits
    to the government for appointment. In addition, the government will
    continue to conduct background checks and ensure that candidates are
    not in a conflict of interest, prior to making any appointment.
  • The
    Treasury Board of Canada Secretariat will examine, in consultation with
    Crown corporations, the development of a certification regime for
    financial statements that would be adapted to the reality of Crown
    corporations.
  • The Access to
    Information Act will be extended to 10 of the 18 Crown corporations
    currently outside the provisions of the Act.
  • With
    respect to seven other corporations, the government is developing
    mechanisms to protect commercially sensitive information before they
    come under the Act. The inclusion of the remaining Crown corporation –
    the Canada Pension Plan Investment Board – will require provincial
    consent. Amendments to the Act will also be developed to protect
    journalistic sources.
  • The
    government will amend the relevant legislation in order to allow for
    the appointment of the Auditor General of Canada as the external
    auditor or joint auditor for all Crown corporations. In recognition of
    the specific needs of commercial Crown corporations, and in line with
    current practice with regard to several organizations, the government
    will encourage the Auditor General of Canada to work in partnership
    with private sector auditing firms.
  • The
    government will establish a more flexible system for the timing of
    special examinations by the Auditor General, based on assessments by
    the Auditor General of the level of risk related to each corporation.
    At a minimum, all corporations will undergo a special examination every
    eight years.
  • The government
    will require that each special examination report prepared by the
    Auditor General be submitted to the Board of Directors, the responsible
    minister, the Treasury Board, and Parliament, to maximize the value of
    these reports to Canadians. The government will work with the Office of
    the Auditor General of Canada to develop a protocol relating to the
    release of the special examination.These measures represent a significant step forward to strengthen
    the governance of Crown corporations. The government will act in a
    timely manner to implement the measures outlined in this report,
    through a combination of legislative changes, regulations, policies and
    guidelines.

    For further information:

    Lise Jolicoeur, Press Secretary
    Office of the President of the Treasury Board
    and Minister responsible for the Canadian Wheat Board
    Tel. 613-957-2666

    Robert Makichuk, Media Relations
    Treasury Board of Canada Secretariat
    Tel. 613-957-2391

    TTY (Telecommunications device for the hearing impaired)
    Tel. 613-957-9090

    The report, “Meeting the Expectations of Canadians ‚Äì Review of the
    Governance Framework for Canada’s Crown Corporations,” is available
    online at:
    www.tbs-sct.gc.ca/report/rev-exa/gfcc-cgse01_e.asp [PDFver here]

    This news release is available online at:
    www.tbs-sct.gc.ca

Categories: Export Credit

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s