1. PGEx Learning Forum Oversight in the Public Sector: Fostering Effective Relationships March 27-28, 2013 at the NAC in Ottawa

2. WE ENCOURAGE YOU TO TWEET DURING THE EVENT USING HASHTAG #PGEX The PGEx Learning Forum on Twitter PGEx Learning Event: Institute on Governance

3. WELCOME AND INTRODUCTORY REMARKS – OVERSIGHT IN THE PUBLIC SECTOR Liseanne Forand, President of Shared Services Canada PGEx Learning Event: Institute on Governance

4. LEGISLATIVE OVERSIGHT – STANDING BEFORE THE COMMITTEE Kevin Page – Former Parliamentary Budget Officer John Williams – President Emeritus & Special Envoy, GOPAC and Past Chair Public Accounts Committee PGEx Learning Event: Institute on Governance

5. 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 Harper Toby Fyfe, Vice-President, Learning Lab, IOG PGEx Learning Event: Institute on Governance

6. DAY TWO WELCOME Todd Cain, Vice-President, Public Governance, IOG PGEx Learning Event: Institute on Governance

7. KEYNOTE DEBATE: “IS THE DISTRIBUTION OF GOVERNMENT RESPONSIBILITIES UNDERMINING OUR SYSTEM OF GOVERNMENT?” Mel Cappe, Professor, School of Public Policy and Governance, University of Toronto Maryantonett Flumian, President, IOG and Former Deputy Minister of Service Canada PGEx Learning Event: Institute on Governance

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

9. 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

10. 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 10 PGEx Learning Event: Institute on Governance

11. 11 Public Department Legislature Executive Minister Organizational Autonomy Advisory Regulatory Operational Enterprise Operational Service Adjudicative Supervisory Trust Institutional Control Policy function Direction/Account ability Relationship P3s, Grants and contributions, etc. Institute on Governance Continuum PGEx Learning Event: Institute on Governance

12. IOG Autonomy Index PGEx Learning Event: Institute on Governance 12 CATEGORYINDICATORS 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

13. Governance Continuum Relationships 13 Public Department Legislature Executive Minister Organizational Autonomy Advisory Regulatory Operational Enterprise Operational Service Adjudicative Supervisory Trust Institutional Control Function Direction/Account ability Relationship P3s, Grants and contributions, etc. PGEx Learning Event: Institute on Governance

14. Case Study: Canadian Wheat Board The Institute on Governance analyzed changes in the governance model of Canadian Wheat Board across these periods of transformation: PGEx Learning Event: Institute on Governance 14 Crown Corporation Shared Governance Interim Operations Private Organization 19651997 20112017

15. Case Study: Canadian Wheat Board PGEx Learning Event: Institute on Governance 15 Autonomy index: Scores for five categories below are determined by rankings within indicators The Canadian Wheat Board: Autonomy Index Crown CorporationShared GovernanceInterim Operations 1. Mandate/Policy Autonomy 18 13 2. Operational/Managerial Autonomy 172322 3. Appointments 9186 4. Legal Personality 1210 5. Reporting Oversight 710 Autonomy Index637961

16. Case Study: Canadian Wheat Board Crown Corporation (1965-1997) Shared Governance (1997-2011) Interim Operations (2011-2017)

17. Case Study: Canadian Wheat Board Lessons 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 PGEx Learning Event: Institute on Governance 17

18. 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 PGEx Learning Event: Institute on Governance 18

19. Agriculture and Agri-Food Institutions InstitutionLegal FormPolicy Function Department Agriculture and Agri-Food Canada Department Canadian Food Inspection Agency Service AgencyRegulatory Canadian Grain Commission Statutory AgencyRegulatory Canadian International Grains Institute Shared-Governance Corporation Operational Service PrioNet CanadaShared-Governance Corporation Operational Service 19 PGEx Learning Event: Institute on Governance

20. 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) PGEx Learning Event: Institute on Governance

21. 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

22. 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) 22

23. Types of S+T Institutions PGEx Learning Event: Institute on Governance 23

24. Type of S+T Institutions and Year of Origin 20102000199019801970196019501940193019201910190018901880 Dept. SOA Stat. Agency Dept. Corp. Serv. Agency Crown Corp. SGC X XXXX X XXXX XXXXX X X XXXXXX XXXXXXXXXXXXXXX 24 PGEx Learning Event: Institute on Governance

25. 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 PGEx Learning Event: Institute on Governance 25

26. How Good is Your Governance? The IOG Governance Scorecard Todd Cain, Vice-President – Public Governance

27. 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 27 PGEx Learning Event: Institute on Governance

28. Scorecards: Purpose and Examples Purpose 1.Assess and inform private governance within corporations 2.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 Example 1.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 Scorecard 28 PGEx Learning Event: Institute on Governance

29. 29 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 PGEx Learning Event: Institute on Governance

30. 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 30 PGEx Learning Event: Institute on Governance

31. Principal Drivers of Outcomes 1.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 31 PGEx Learning Event: Institute on Governance

32. Driver #1: Public Policy Linkages Public Policy Linkages: The organization has strong public policy linkages to the policy authority 1.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 32 PGEx Learning Event: Institute on Governance

33. Driver #2: Strategic Capacity Strategic Capacity: The organization has strong strategic decision making and implementation capabilities 1.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 33 PGEx Learning Event: Institute on Governance

34. 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 34 PGEx Learning Event: Institute on Governance

35. Driver #4: Adaptability and Resilience Adaptability and Resilience: Mandates, objectives and institutional arrangements are reviewed and adapted as appropriate 1.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 35 PGEx Learning Event: Institute on Governance

36. 36 Complete Framework PGEx Learning Event: Institute on Governance

37. 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. 37 PGEx Learning Event: Institute on Governance

38. 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 38 PGEx Learning Event: Institute on Governance

39. Breakout session At 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? 39 PGEx Learning Event: Institute on Governance

40. FORESIGHT AND PROBLEM SOLVING IN DELEGATED RELATIONSHIPS: LESSONS FROM THE PRIVATE SECTOR Todd Cain, Vice-President, Public Governance Terry Ansari, Board Chair, Institute on Governance and Vice- President Business Solutions, Cisco Canada Colleen Kelley, Vice-President Business Operations, Stratford Managers PGEx Learning Event: Institute on Governance

41. OVERSIGHT OF CROWN CORPORATIONS – DELIVERING VALUE AND RESPECTING VALUES John Knubley, Deputy Minister of Industry Canada Yves Desjardins-Siciliano, Corporate Secretary and Counsel, VIA Rail Susan Margles, Vice-President, Government Relations and Policy, Canada Post PGEx Learning Event: Institute on Governance

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

43. 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. PGEx Learning Event: Institute on Governance

44. “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 PGEx Learning Event: Institute on Governance

45. Roles & Accountabilities - Board Governor-in-Council Appointees Duty to the Corporation – Protect value Loyalty to the Government Agency Issue Lessons:  Know your directors  Use their political sense to test your assumptions  Keep them informed on all matters related to government PGEx Learning Event: Institute on Governance

46. 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 asked  Accept broader accountability to government  Keep government partners informed on matters related to their portfolios PGEx Learning Event: Institute on Governance

47. 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 homogenous  Different issues have different proponents – identify early  Keep portfolio officials informed PGEx Learning Event: Institute on Governance

48. Operating within Multiples Levels Map it out: Portfolio Minister Portfolio Department Other Key Ministers and Portfolios Key Parliamentarians Listen, Educate, Inform Lessons:  Single points of contract  Meet regularly PGEx Learning Event: Institute on Governance

49. Government Framework Crown Corporations and Minister Mandate letter Regular meetings with staff Crown Corporations and Department Shared objectives: Agree on how to raise issues Regular meetings Joint agendas Meetings with the Board Minister Deputy-Minister & Senior Officials PGEx Learning Event: Institute on Governance

50. 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 PGEx Learning Event: Institute on Governance

51. Framing the Message Framework It’s relevant It’s positive Here’s the evidence Challenges The power of inertia Asymmetric information Finding ground zero PGEx Learning Event: Institute on Governance

52. 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 PGEx Learning Event: Institute on Governance

53. In case you missed it… 1. Focus on key issues and their resolution 2. Communicate regularly, continuously, openly and respectfully 3. Understand everyone’s agenda 4. Have the right people – Use them 5. Listen, educate and inform 6. Build relationships based on trust and respect 7. Remind yourself that, in the find analysis, we are all here to serve the people of Canada PGEx Learning Event: Institute on Governance

54. “If you must hold yourself up…as an object lesson…hold yourself up as a warning and not as an example.” George Bernard Shaw PGEx Learning Event: Institute on Governance

55. Canada Post: governance of a state-owned enterprise Susan Margles, VP Gov’t Relations and Policy, Canada Post Corporation competitive

56. $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 PGEx Learning Event: Institute on Governance

57. 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 PGEx Learning Event: Institute on Governance

58. 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 PGEx Learning Event: Institute on Governance

59. 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? PGEx Learning Event: Institute on Governance

60. 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 PGEx Learning Event: Institute on Governance

61. 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 PGEx Learning Event: Institute on Governance

62. 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” PGEx Learning Event: Institute on Governance

63. 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 PGEx Learning Event: Institute on Governance

64. 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, churn Challenge: How to get timely decisions while respecting governance process PGEx Learning Event: Institute on Governance

65. 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 lives Respect 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) PGEx Learning Event: Institute on Governance

66. The Challenge: Reaching a consensus within a backdrop of continuous stakeholder debate Senior Management Board of Directors Ministry Parliament Bureaucracy Public Employees 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

67. 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! PGEx Learning Event: Institute on Governance

68. WRAP-UP AND EVALUATION Todd Cain, Vice-President, Public Governance, IOG PGEx Learning Event: Institute on Governance