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Crown Corporations – Governance Reflections from the Chair

June 30, 2020



In this session from The McMaster Collaboratorium on June 9, 2020, leading Crown Corporation Board Chairs, Françoise Bertrand, Chair, Board of Directors at VIA and Douglas Harrison, Chair, Board of Directors at the Canadian Commercial Corporation, share their perspectives with The Directors College Principal, Dr. Michael Hartmann, on our current environment and how it has impacted approaches to governance and effective board engagement.

Session Highlights

Pre-COVID, there was already an evolution in process for governance in the private and public sectors.  Environment, Social, and Governance (ESG) is the rising principle behind the latest changes, especially with pressure from institutional investors and in changes to the Corporations Act this year.  As we come through the pandemic, ESG has become even more important as a focus for boards.

Crown corporations are governed by non-political director appointments, to maintain the independence required to provide oversight for government-owned corporations.  Strategies have required refreshing around supply chain, government relations, and human capital.

Effective boards work through committees – refocusing the committees allows the board to focus more fully on the strategic direction of the corporation.  Building dialogue with the broad range of complex stakeholders that are impacted by a Crown corporation is key.  Restructuring board activity to streamline oversight, including protecting committees from non-committee member attendance, and assessing board members is also important to a successful Crown corporation.

As a result of COVID, more frequent and virtual meetings are the new normal.  ESG risk planning over the past few years has proven to be a great benefit to handling the changes the pandemic represented.  Strategy development and scenario planning around ESG provided a baseline for COVID planning.

Crown corporations must balance between the obligations of public service and the needs of commercial customers.  Respectful navigation between evolving stakeholder groups is an ongoing challenge.

If you were not prepared for strong dialogue between directors and management pre-COVID, during and post-pandemic oversight will be more difficult.   Keeping transparent communication between the CEO and the Chair while the corporation moves through the crisis has been helpful in navigating the challenges posed.

Crown corporations are impacted by ESG in the same way as private corporations.  Reputation management and the social responsibility of the corporation are critically important and are higher on the agenda now.  Health and safety in public service, especially when serving a vast array of stakeholders, is paramount to success.

There is often a ‘healthy tension’ between Crown boards and government management who approach issues from very different perspectives.  This often leads to innovative solutions when the dialogue is open.

Productivity and the well-being of employees was already a high consideration for Crown boards, before the crisis arrived, and continues to be explored.

An effective chair facilitates conversations and the participation of directors, intuitively drawing contributions in meetings.  Virtual meetings have been a challenging medium to spur effective dialogue with large or less established boards.

Business continuity, risk mapping, resiliency, and leadership through uncertainty will be accelerated as part of the new normal.  Change is here to stay.  Staying alert and remaining proactive makes boards more relevant.  Diversity on the board invites creativity and accelerates better decision making and outcomes.

Crown corporations are a great place to begin developing your resume as a director.  The contributions directors can make to affect positive change offer challenging and exciting experiences.

Watch key messages from the webinar here.