Decision on U of C governors troubling

Governance is a hot topic across the country these days.

Whether it's the corporate, notfor-profit or government realm, ensuring individuals with diverse skills and experience are at the board table has taken on great importance. Gone are the days — mostly, anyway — where there was a tap on the shoulder and a pal was named to an organization's board.

Having chaired a governance committee at one of Calgary's larger not-for-profit organizations, I am intimately acquainted with the time required and consideration given to ensure board appointees are properly equipped to carry out their responsibilities.

There is nothing random about this process.

A governance committee, in addition to evaluating the organization's CEO and the performance of its board, must be very deliberate in considering the skills needed around the board table related to the environment in which the organization operates and its strategic plan.

It's as much about a snapshot in time as it is about preparing for the future.

This process also involves recognizing the skills and expertise that will be lost when board members step down and having a deliberate process to stagger appointments to prevent too many from leaving at once. It's just as bad to lose the institutional memory as it is the number of experienced board members available to mentor newcomers.

There also needs to be an appropriate balance between the number of independent versus non-independent nominees; a complement of outside board members is critical to avoid 'group think.'

It's for all of these reasons the Alberta government's recent decision not to re-appoint three University of Calgary governors whose terms expired is particularly troubling.

The university's board of governors has 21 members, including president Elizabeth Cannon who sits as ex officio member. Of the 20 voting board members, 10 are defined as public, or outside, directors. The other 10 are insiders employed or affiliated with the U of C.

Of the 10 independent board members, seven are leaving, including the three whose terms were not renewed. This has the potential for big problems, starting with the fact the group includes the chairs or vice-chairs of four important U of C standing committees: human resources and governance, finance and property, investment and audit.

Bonnie DuPont is also among those leaving after serving for 10 years, the last four as board chair.

Those leaving include a retired vice-chairman of RBC Capital Markets; a recently retired tax partner with a major accounting firm; an insolvency and corporate restructuring expert who’s the former Stampede board chairman and current chair of Calgary Economic Development, and a former member of Suncor’s executive leadership team.

In all, that’s 31 years of experience walking out the door.

The audit, finance and property and investment committees require individuals with financial expertise. The U of C’s annual budget is $1.3 billion. Its investment committee stewards endowments amounting to about $1 billion. Not exactly a corner-store operation.

Albertans should be concerned the right kind of oversight will not be present to help steward the U of C, which kicks off its 50th anniversary celebrations this weekend. The Alberta government, which lacks much private-sector expertise, is missing the mark on this one.

Some will inevitably bring up the controversy of the Enbridge Centre for Corporate Sustainability that erupted last year, but there is nothing to suggest sound governance has not been in evidence at the U of C.

The board of governors includes representation from the public, students, faculty and the Alberta Union of Provincial Employees. It does lack gender parity, but the U of C board is otherwise diverse. In the absence of an endless pit of government funding, post-secondary institutions are increasingly reliant on the private sector to enhance the student experience, whether it’s generous individuals such as Dick Haskayne, Mac Van Wielingen, Ron Mannix, the Taylor family, Seymour Schulich, Geoff Cummings, Alvin Libin, and the Hotchkiss, McCaig, Westman and Hunter families — to name but a few — or numerous companies that have stepped up to fund research undertakings, lectureships and program chairs.

They all expect a high level of governance to ensure their donations are appropriately stewarded. Under president Cannon’s tenure, $650 million has been raised. That’s not small change, especially in today’s cash-strapped environment.

It’s also important to note these are volunteer positions. Those who put their names forward are not in resume-building mode.

A lack of confidence in the board could not only cause donations to dry up but might also lead to a lack of qualified candidates coming forward as potential nominees. That’s because the buck stops, so to speak, at the board level. If something goes wrong, the board is held liable.

No one takes these appointments lightly.

Minister of Advanced Education Marlin Schmidt has said he wants to get people under the age of 65 on government boards, but this isn’t about age. It’s about experience, diversity, institutional knowledge and the skills needed to guide a complex organization.

It can be argued this is of paramount importance for Alberta’s post-secondary institutions charged with the mandate of educating the next generation of Albertans at a time when technology is set to dramatically disrupt the traditional educational delivery model.

Good governance today matters more than ever, and the outcome of the government’s zeal to expunge the fingerprints of prior governments by not renewing well-considered appointments could have far-reaching consequences.