Alberta suffering a governance crisis

There is a governance crisis in Alberta.

With the NDP government changing how it appoints individuals to the province’s agencies, boards and committees, vacant positions are not being filled, leaving budget approvals and committee work stuck in limbo.

The government needs to recognize several key issues about what constitutes best practices when it comes to governance.

First, is that most board work is done at the committee level. Underpopulated boards means these tasks cannot be accomplished and the efficacy of the entire organization is undermined.

This covers everything from strategic planning and human resources — including the hiring and evaluation of the CEO — to the approval of annual budgets.

Another issue is the attention board chairs and committees give to succession planning, ensuring the board is comprised of members with the right skill sets.

There is good reason board terms are longer than one year and tend to be staggered.

The intent is to ensure new members have time to understand the business of the organization they help oversee. This also provides continuity so there is sufficient institutional memory.

Ask anyone who serves or has served as a board director — in the public, private or not-forprofit sectors — and they will tell you it takes a year to run up the learning curve and more fully understand the organization.

Yet none of that seems to trouble the provincial government.

According to the government’s website, Premier Rachel Notley “would like to see the boards of the province’s many ABCs (agencies, boards and committees) filled with Albertans from all parts of the province, with all types of expertise, and from all ages and backgrounds.”

There is nothing wrong with diversity, but relevant skill sets are critical.

That’s why standing nominating and governance committees form part of a board’s structure — to ensure the necessary skills to help steward the organization are present.

As Albertans, all of this should be deeply troubling. We are not talking about trivial dollars or institutions.

The same government website says those serving on the ABCs “are involved in decisions relating to the management of Alberta’s over $50-billion budget.”

These organizations include the province’s post-secondary institutions, a number of which — including the University of Calgary, Alberta College of Art and Design, MacEwan University and the University of Lethbridge — are all still awaiting the appointment of board chairs.

SAIT’s board chair, Heather Culbert, was the last to be appointed in that position at a post-secondary school since June.

The Workers Compensation Board has six vacancies.

The Alberta Electrical System Operator board also has unfilled seats. Given the looming legal challenges over power purchase arrangements and the province’s transition to more renewable power, having an experienced, well-appointed board is critical.

For illustrative purposes, the U of C has a $1-billion budget and $1.3-billion endowment. SAIT’s budget is $350 million, while ACAD’s tops $20 million.

As taxpayers, Albertans need to ask whether those tax dollars are being properly stewarded.

Without appropriate governance, the answer is no.

The government is also meddling in organizations they do not fund, like the Alberta Energy Regulator, whose budget is underwritten by the energy sector.

The AER, when established, had a board of eight members. It has been reduced to five, and the only charter member still there is chairman Gerry Protti.

Those whose terms expired and re-applied under the new format were not accepted.

The new appointees not only lack relevant oil and gas expertise, they’re only in place for oneyear terms. Other than Cassie Doyle, who replaced Elizabeth Dowdeswell when she was named Ontario’s lieutenant governor, the current AER board is without much-needed institutional memory.

Moreover, a board of five individuals isn’t anywhere big or experienced enough to staff the AER’s standing committees, which is where the work gets done.

Companies need certainty for capital expenditure decisions, as do investors and employees.

Investment dollars are already leaving the province. Putting directors in place for one-year terms at a time when the industry itself is changing by the day doesn’t cut it.

Albertans deserve a healthy governance structure in place at all the ABCs to ensure the health of its institutions and the economy.

Those individuals the government rejected offered their time and expertise over the years because they believe in making things better for all Albertans. It’s not about privilege, power or padding one’s resume.

It will be interesting to see if the province meddles in the next round of appointments to the Alberta Securities Commission, whose chair previously headed the Institute of Corporate Directors, or the Alberta Investment Management Corporation, chaired by ARC Financial founder Mac Van Wielingen, also a very strong governance advocate.

For what appear to be purely ideological reasons, the government has fumbled the ball late in the fourth quarter. But this is no game.

It’s the underlying administrative structure of the province — of the ABCs, whose oversight and stewardship of the public institutions all Albertans depend upon — being seriously at risk because of a complete disregard for established best governance practices that ensure these organizations function in an effective, responsible and transparent manner.