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[ Backgrounder ]
For immediate release
February 17, 2005
Ottawa – Reg Alcock, President of the Treasury Board, today tabled
in the House of Commons a report entitled Meeting the Expectations of
Canadians - 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 http://www.tbs-sct.gc.ca/report/rev-exa/gfcc-cgse_e.asp.
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For more information, contact:
Lise Jolicoeur
Press Secretary
Office of the President of the Treasury Board
and Minister responsible for the Canadian
Wheat Board
(613) 957-2666
Robert Makichuk
Media Relations
Treasury Board of Canada Secretariat
(613) 957-2391
If there is a discrepancy between any printed version and the electronic version of this news release, the electronic version will
prevail.
TTY (Telecommunications device for the hearing impaired) — (613) 957-9090
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 to be an action plan focusing on practical measures 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.
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