PGEx Learning Forum Oversight in the Public Sector: Fostering Effective Relationships

PGEx Learning ForumOversight in the Public Sector:Fostering Effective RelationshipsMarch 27-28, 2013 at the NAC in Ottawa

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PGEx Learning Event: Institute on Governance

WELCOME AND INTRODUCTORY REMARKS – OVERSIGHT IN THE PUBLIC SECTOR

Liseanne Forand, President of Shared Services Canada


LEGISLATIVE OVERSIGHT – STANDING BEFORE THE COMMITTEE

Kevin Page – Former Parliamentary Budget OfficerJohn Williams – President Emeritus & Special Envoy, GOPAC and Past Chair Public Accounts Committee


THE YEAR IN GOVERNANCE – SURVEYING THE HEADLINES

Keith Beardsley, Partner at True North Public Affairs and Former Deputy Chief of Staff to Prime Minister Stephen HarperToby Fyfe, Vice-President, Learning Lab, IOG


DAY TWO WELCOME

Todd Cain, Vice-President, Public Governance, IOG


KEYNOTE DEBATE:“IS THE DISTRIBUTION OF GOVERNMENT RESPONSIBILITIES UNDERMINING OUR SYSTEM OF GOVERNMENT?”

Mel Cappe, Professor, School of Public Policy and Governance, University of TorontoMaryantonett Flumian, President, IOG and Former Deputy Minister of Service Canada


Refining the Governance Continuum: Where Do You Fit In? Karl Salgo, Executive Director - Public Governance Exchange

Origin of the IOG Governance Continuum• Shift in roles of traditional governance

relationships• Growth in long-standing public sector use of

alternative organizations • Need for a conceptual model for modern

public governance

PGEx Learning Event: Institute on Governance 9

Policy Functions of Government Bodies

• Department: Traditional ministerial department (generalist)• Advisory: Provides advice to Government on particular issue • Regulatory: Establishes and/or enforce rules of conduct against

obligations set out in existing statutes and/or regulations• Adjudicative: Renders impartial quasi-judicial decisions to

resolve disputes • Operational Service: Delivers programs and services to the

public in a primarily non-commercial manner within a well-defined policy framework

• Operational Enterprise: Sells programs and services to the public in a primarily commercial manner

• Supervisory: Impartially oversees or investigates defined activities and publicly report on its findings

• Trust: Invests or administers funds on behalf of the public or other groups and entities

10PGEx Learning Event: Institute on Governance

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Public

Department

Legislature

Executive

Minister

Organizational Autonomy

Advisory

Regulatory

Operational Enterprise

Operational Service

Adjudicative Supervisory Trust

Institutional Control Policy function

Direction/Accountability Relationship

P3s, Grants and contributions,

etc.

Institute on Governance Continuum


IOG Autonomy Index


CATEGORY INDICATORS

1. Mandate/Policy Autonomy (30)

1.1 Mandate Scope and Control (10)1.2 Policy Control (10)1.3 Directives (5)1.4 Veto, Alter, or Return (3)1.5 Miscellaneous Residual Authority (2)

2.Operational/Managerial Autonomy (25)2.1 Financial Controls (15)2.2 Human Resources Controls (10)

3.Appointments (20)3.1 Authority (10)3.2 Tenure (8)3.3 Ex-officio Membership (2)

4. Reporting Oversight (15)4.1 Jurisdictional Oversight (10)4.2 Audit (5)

5. Legal Personality (10)5.1 Corporate and Agent Status (6)5.2 Statute (2)5.3 Governing Board (2)

(100) Total Autonomy Index Score

Governance Continuum Relationships

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Public

Department

Legislature

Executive

Minister

Organizational Autonomy

Advisory

Regulatory

Operational Enterprise

Operational Service

Adjudicative Supervisory Trust

Institutional Control

Function

Direction/Accountability Relationship

P3s, Grants and contributions,

etc.


Case Study: Canadian Wheat Board• The Institute on Governance analyzed changes

in the governance model of Canadian Wheat Board across these periods of transformation:


Crown Corporation

Shared Governance

Interim Operations

Private Organization

1965 1997 2011 2017

Case Study: Canadian Wheat Board


• Autonomy index: Scores for five categories below are determined by rankings within indicators

The Canadian Wheat Board: Autonomy IndexCrown

CorporationShared

GovernanceInterim

Operations1. Mandate/Policy Autonomy

18 18 13

2. Operational/Managerial Autonomy

17 23 22

3. Appointments 9 18 64. Legal Personality 12 10 105. Reporting Oversight 7 10 10

Autonomy Index 63 79 61

Case Study: Canadian Wheat Board

Crown Corporation (1965-1997)

Shared Governance (1997-2011)

Interim Operations (2011-2017)

Case Study: Canadian Wheat BoardLessons Learned• Low score for a share governance

organization• Shared governance model is an

exceptional choice for an organization with a high level of public policy authority

• Level of autonomy accorded to CWB was calibrated to organizational function


Science + Technology on the Governance Continuum• The IOG have been examining the governance

of science and technology departments in the Government of Canada

• Part of this work involves mapping the landscape by plotting S+T organizations and relationships on the Governance Continuum

• Agriculture and Agri-Food S+T Portfolio is one example


Agriculture and Agri-Food Institutions

Institution Legal Form Policy FunctionDepartment Agriculture and Agri-Food Canada

Department Department

Canadian Food Inspection Agency

Service Agency Regulatory

Canadian Grain Commission

Statutory Agency Regulatory

Canadian International Grains Institute

Shared-Governance Corporation

Operational Service

PrioNet Canada Shared-Governance Corporation

Operational Service


Agriculture and Agri-Food S+T Portfolio

20

Public

Department of Agriculture and Agri-Food (0)

Legislature

Executive

Minister

Canadian Food Inspection Agency (40) PrioNet (90)

Canadian Grain Commission (48)

Canadian International Grains Institute (85)


Health S+T Portfolio Public

Department of Health (0)

Legislature

Executive

Minister

Public Health Agency of Canada (33) Hazardous Materials

Information Review Commission (48)

Canadian Institute for Health Research (50)

Canadian Agency for Drugs and Technologies in Health (86)

Canadian Centre on Substance Abuse (82)

Canadian Institute for Health Information (86)Canadian Partnership Against Cancer Corporation (86)

Health Council of Canada (86)Mental Health Commission of Canada (87)

21

Industry S+T Portfolio Public

Department of Industry (0)

Legislature

Executive

Minister

Canadian Space Agency (29)

Natural Sciences and Engineering Research Council (44)

Social Sciences and Humanities Research Council (44)

National Research Council of Canada (54)

Canadian Foundation for Innovation (82)

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Types of S+T Institutions


Shared Governance Corporation 15

Crown Corporation 1

Service Agency 1

Departmental Corporation 5

Statutory Agency 6

Special Operating Agency 1

Department 9

Type of S+T Institutions and Year of Origin

20102000199019801970196019501940193019201910190018901880

Dept.

SOA

Stat. Agency

Dept. Corp.

Serv.Agency

CrownCorp.

SGC

X

X X X X X X XX X

X XX XX

X

X

X X X X X X

X X X XX XX XX X XXXXX


From governance structure to governance ecosystem• The continuum and autonomy index clarify

how relationships are structured among organizations, but not how they are managed

• The IOG Governance Scorecard (next presentation) will help us understand this governance ecosystem of relationships


How Good is Your Governance? The IOG Governance ScorecardTodd Cain, Vice-President – Public Governance

The IOG Governance Scorecard• How Good is Your Governance?

– Session will focus on the governance ecosystem, emphasizing relationships, not wiring

– This will be achieved by introducing and then working with the IOG scorecard hands-on


Scorecards: Purpose and ExamplesPurpose1. Assess and inform private

governance within corporations2. Assess and inform public

governance across developing countries

3. Assess and inform public governance across developing and developed countries

4. Assess and inform public governance across developed countries

5. Assess and inform public governance within Canada and provide a comprehensive framework for governance

Example1. Globe and Mail’s Board Games

Index

2. Ibrahim Index for African Governance

3. World Bank’s World Governance Indicators

4. Bertelsmann Index of Sustainable Governance Indicators

5. IOG Governance Scorecard28PGEx Learning Event: Institute on Governance

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Purpose of an IOG Governance Scorecard• To systematically articulate the elements of good

governance in a comprehensive, in-depth assessment framework;

• To assess the quality of governance in Canadian organizations and pinpoint specific areas of risk;

• To inform a public conversation about good governance by creating the space and the information necessary for constructive dialogue; and

• To provide leaders with early warnings and “actionable information” for improved design, more effective practices and proactive risk management.

• IOG Scorecard achieves these goals by being more in-depth than most scorecards – criteria are detailed and systematic making it more useful as a management tool


Applications of the IOG Governance Scorecard• A facilitated self-assessment for individual

public sector organizations • An independent assessment of individual

organizations/sectors by a third-party expert organization

• A way to assess public policy outcomes– Organization governance enables the

achievement of outcomes that maximize public net benefits to intended beneficiaries


Principal Drivers of Outcomes1. Public Policy Linkages: The organization

has strong public policy linkages to the policy authority

2. Strategic Capacity: The organization has strong strategic decision making and implementation capabilities

3. Accountability and Transparency: All involved have the information needed to evaluate achievement of outcomes by the organization

4. Adaptability and Resilience: Mandates, objectives and institutional arrangements are reviewed and adapted as appropriate 31PGEx Learning Event: Institute on Governance

Driver #1: Public Policy LinkagesPublic Policy Linkages: The organization has strong public policy linkages to the policy authority1. Public Policy Mandates

– Organization decision making is backed by mandates of the democratic policy making authority (legislative, executive, ministerial)

2. Organizational Objectives– Organizational objectives are supported by

its public policy mandates and communicated effectively


Driver #2: Strategic CapacityStrategic Capacity: The organization has strong strategic decision making and implementation capabilities1. Strategic Planning Capacity

– The organization’s planning process and decision making is strong and clearly linked to mandate with effective internal oversight of performance

2. Strategic Implementation Capacity– Organizational objectives cascade through

the organization and are supported by programs and capacity


Driver #3: Accountability and Transparency

Accountability and Transparency: All involved have the information needed to evaluate achievement of outcomes by the organization 1. Citizen Awareness: Citizens have the

knowledge and information needed to evaluate organization achievement of outcomes

2. Parliament and the “Centre” Oversight Capacity: The legislature, cabinet and central agencies have the knowledge and information needed to evaluate organization achievement of outcomes and take steps to stay informed


Driver #4: Adaptability and Resilience

Adaptability and Resilience: Mandates, objectives and institutional arrangements are reviewed and adapted as appropriate1. Self-Monitoring:

– The organization periodically assesses and reports on the relevance and achievement of its outcomes

2. Institutional Adaptability and Resilience:– The organization monitors its institutional

arrangements, reforming them is necessary


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Complete Framework


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Beta Test Conclusions: Methodology• Expert third party assessment can yield valid

results using only publicly available information, but places a premium on transparency. This will yield more precise results for some sectors and organizations than others.

• Given the detailed nature of the indicators, facilitated self-assessment will yield more refined assessments and will tend to pinpoint areas of vulnerability more precisely.

• Scores for each organization have been reliable across raters.


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Beta Test Conclusions: Application• IOG scorecard employs more detailed, in-

depth criteria than typical scorecards• The scorecard benefits from expert

application• Detailed nature of indicators provides

“actionable information” – that is, pinpoints specific areas of risk and specific possible improvements

• Detailed nature of indicators also means that information will be most “actionable” in facilitated self-assessment context or when third-party expert consults with organization


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Breakout sessionAt your tables:

– Choose one of the principle drivers– Discuss how well your organization, or a

specific distributed organization you interact with, performs using the enabler descriptors in your workbook as a yard stick• Are some governance relationships more

effective than others?• Which area presents the greatest

opportunity for improvement?


FORESIGHT AND PROBLEM SOLVING IN DELEGATED RELATIONSHIPS:LESSONS FROM THE PRIVATE SECTOR

Todd Cain, Vice-President, Public GovernanceTerry Ansari, Board Chair, Institute on Governance and Vice-President Business Solutions, Cisco CanadaColleen Kelley, Vice-President Business Operations, Stratford Managers


OVERSIGHT OF CROWN CORPORATIONS – DELIVERING VALUE AND RESPECTING VALUES

John Knubley, Deputy Minister of Industry CanadaYves Desjardins-Siciliano, Corporate Secretary and Counsel, VIA RailSusan Margles, Vice-President, Government Relations and Policy, Canada Post


Navigating Relationships between Crown Corporations and Government – A Case StudyOttawa, March 28, 2013Yves Desjardins-Siciliano, General Counsel & Corporate Secretary

Disclaimer• This is not about VIA Rail and Transport

Canada.• This is not as much about success as it is

about navigation.• This is about an approach and a methodology.• This is about governance.


“Before I served as consultant to Kennedy, I had believed… that the process of decision making was largely intellectual and all one had to do

was walk into the President’s office and convince him of the correctness of one’s view. This

perspective I soon realized is as dangerously immature as it is widely held.”

Henry Kissinger


Roles & Accountabilities - Board• Governor-in-Council Appointees• Duty to the Corporation – Protect value• Loyalty to the Government• Agency Issue

Lessons: Know your directorsUse their political sense to test your

assumptionsKeep them informed on all matters

related to government


Roles & Accountabilities - Management

• CEO usually a Governor-in-Council Appointee, with or without Board Support

• Management hired by CEO• Primary Role: Operate the business – Create

value• Primary Accountability to the Board

Lessons: Advise on policy, when askedAccept broader accountability to

governmentKeep government partners informed on

matters related to their portfolios


Roles & Accountabilities - Government

• Portfolio Department• Other Departments/Central Agencies• Ministerial Offices• Primary Role (re Crown Corps.): Avoid and

Manage Crisis• Parliamentarians

Lessons: Government is not homogenousDifferent issues have different

proponents – identify earlyKeep portfolio officials informed


Operating within Multiples Levels• Map it out:

Portfolio MinisterPortfolio DepartmentOther Key Ministers and PortfoliosKey Parliamentarians

• Listen, Educate, Inform

Lessons: Single points of contractMeet regularly


Government Framework• Crown Corporations and Minister

Mandate letterRegular meetings with staff

• Crown Corporations and DepartmentShared objectives: Agree on how to raise

issuesRegular meetings Joint agendas

• Meetings with the BoardMinisterDeputy-Minister & Senior Officials


Proactive Protocols• Two-pronged communications

Minister’s office Department Transparency Openness

• Two-way communications Heads-up! Asymmetric information Responsive Respectful

• Departmental Officials are a key resource They can help in navigating through Ottawa They can save your time They bring skills, experience & corporate history


Framing the Message• Framework

It’s relevant It’s positiveHere’s the evidence

• ChallengesThe power of inertiaAsymmetric informationFinding ground zero


Things to keep in mind• Public confrontation rarely works• You must understand your audience• Your P.O.V. must reflect that understanding• Use the right person for the right audience• All you do must be towards enhancing the

trust factor


In case you missed it…1. Focus on key issues and their resolution2. Communicate regularly, continuously,

openly and respectfully3. Understand everyone’s agenda4. Have the right people – Use them5. Listen, educate and inform6. Build relationships based on trust and

respect7. Remind yourself that, in the find analysis,

we are all here to serve the people of Canada


“If you must hold yourself up…as an object lesson…hold yourself up as a warning and not as

an example.”

George Bernard Shaw


Canada Post: governance of a state-owned enterprise

Susan Margles, VP Gov’t Relations and Policy, Canada Post Corporation

competitive

• $7.5 billion in annual revenue - 90% of revenue is from business• Subsidiaries > 20% of revenue• 21 major mail processing plants; 7,800 vehicle fleet; 68,000

employees • Canada’s largest retail network: 6,400 post offices

Canada Post: One of Canada’s Largest Businesses

• More post offices than Esso, McDonald’s and Tim Hortons combined have outlets in Canada

• Over than 90 per cent of Canada’s 15 million addresses are within 5km of a post office


Most of the business is open to competition,including emerging e-substitutes

Transaction Mail

Direct Marketing

Parcels

$3.1 B$1.4 B

$1.2 B


Social mandate is legislated in many cases, though can also be policy-determined

• Canada Post Corporation Act• Federal Accountability Act• Access to Information Act• Official Languages Act• Treasury Board policies / guidelines• Canadian Postal Service Charter

• Universal Service

• Public Transparency

• Fiscal control and accountability

• Customer complaint resolution

Community outreach and consultation


Debate continues regarding the fiscal mandate of Canada Post even though the law is unequivocal

Under the Financial Administration Act (Schedule III, Part 2)

• operates in a competitive environment

• not ordinarily dependent on appropriations for operating purposes

• ordinarily earns a return on equity

• there is a reasonable expectation that the corporation will pay dividends

“The Debate”

Profits?

Dividends?

Competitive markets?

Subsidies?

Privatization?

Supplier of last resort?

Wind down?


Many Canadians have a traditional view of Canada Post or see it solely as a public service

Traditional source of “connectivity”...

• Christmas / Social Mail• Bills and Statements• Monopoly• Everywhere• Face of government• Paid for by taxpayers


Our business customers see us as a “cost centre”

• Prices• Still need to

use us, but will adopt other means if cheaper

• Want Canada Post to cover where others dare not tread


MP’s and Ministers take a keen interest – see selves as “fixing” constituent problems• On average, each of Canada’s MPs has over 20

post-offices in his / her riding• One of the largest employers in Canada• In rural and remote ridings,

Canada Post is often the only federal government presence in community

• Challenge: Often do not want to keep issue-management at “arms-length”


Employees and unions are active where policy directly affects their interests• Changes to service model (e.g. outsourcing, delivery

restructuring, retail)• Compensation / Benefits / Pensions

Canadian Union of Postal Workers is active in drawing public into the debate on both internal and external postal issues


Central agencies / Ministries understand the business issues but still compliance-focused• Mostly a process

challenge• Direction / approvals /

decisions can take time – even minor ones

• Not always on their “priority” radar – just one of many issues they deal with

• Staff turnover creates portfolio knowledge gap, churnChallenge: How to get timely decisions while respecting governance process


Senior management and BoD have a business to run, but recognise the nature of public service

• Most of the senior management at Canada Post come from the private sector

• Challenges: there are more stakeholders with a legitimate “voice” than what they experienced in their former private-sector livesRespect the public policy aspect of the business, but would prefer greater certainty / rules around the policy and get on with running the business (e.g. ATI, FAA, Canadian Postal Service Charter)


The Challenge: Reaching a consensus within a backdrop of continuous stakeholder debate

Senior Management

Board of DirectorsMinistry

ParliamentBureaucracy

PublicEmployees

• Tension between private sector goals vs. public sector not exactly as conventionally portrayed (i.e. not always at odds)

• Most understand the big issues• Concept of value-for-money is

universally understood, though less consensus on specific measures

• Sometimes it’s a matter of lexicon (e.g. shareholder vs. taxpayer, official language compliance vs. good customer service)

• Fundamental, ideologically-based stakeholder positions are less movable PGEx Learning Event: Institute on Governance

In the end, its about engaging the relationship and keeping communication channels open

• Continuously message– particularly where old myths prevail in conventional thought and new ideas need to be appreciated

• “Feed the beast” – have an answer for every question

• Use language stakeholders understand

• With government, change has a time and a place – and it be may not your time, or place!


WRAP-UP AND EVALUATIONTodd Cain, Vice-President, Public Governance, IOG


Documents

PGEx Learning Forum Oversight in the Public Sector: Fostering Effective Relationships