CHPC Committee Report

Current Situation

Crown corporations are distinct legal entities wholly owned by the government. They operate in many sectors, including transportation, agriculture and culture. They have more managerial autonomy than most other government entities, so they can operate in a more commercial manner. A board of directors oversees the management of each corporation and holds management responsible for the corporation's performance. Through the Crown corporation's chair, the board of directors is accountable to a minister who represents the government and acts as the link between the corporation and both Cabinet and Parliament. The government retains power and influence over Crown corporations in areas like appointments, remuneration for chief executive officers and directors, and approval of plans and budgets.[292]

CBC/Radio-Canada is a Crown corporation that belongs to Canada and all Canadians. The Broadcasting Act includes provisions that define the Corporation's powers, financial situation and constitution, as well as the mandate and responsibilities of its board of directors.

The CBC/Radio-Canada Board of Directors consists of 12 members, representing the public, who have qualifications in different sectors such as business, economics, marketing, accounting, the arts, information technologies, law and broadcasting. They are appointed by the Governor in Council for a renewable five-year term.

The vast majority of witnesses called for CBC/Radio-Canada's governance to be given greater independence from the government of the day. It was recommended that there be no partisanship in the selection of Board members. As well, only the Board of Directors should have the right to hire and fire the Corporation's President/CEO.

According to the organisation Our Public Airwaves, the current process for appointing Board members completely lacks transparency and, over the years, a number of people of dubious competence have been appointed.[293]

The Syndicat des communications de Radio-Canada put recommendation 18.1 of the June 2003 report of the Standing Committee on Canadian Heritage back on the table. The recommendation urged the Department of Canadian Heritage to work with the Committee to develop criteria and guidelines for appointments to the CBC's Board of Directors by June 30, 2004.[294]

For its part, the Communications, Energy and Paperworkers Union (CEP) suggested that CBC/Radio-Canada's governance structure be modified so that the Board of Directors must answer more directly for their decisions to Canadians and respect their wishes more fully.[295]

Friends of Canadian Broadcasting also recommended the adoption of an independent appointment process for members of the CBC/Radio-Canada Board, "drawn from the advice of eminent Canadians, such as, for example, Officers and Companions of the Order of Canada. Such an arm's length process could guide appointments under the authority of the Privy Council."[296]

Professor Catherine Murray made a similar recommendation by suggesting that the CBC's Board of Directors be "more broadly representative of all levels of scientific, cultural and creative, technical, and business leadership in this country."[297]

[T]he CBC will only be better if it has true independence from the government, if it's perceived to be independent from the government, and if it operates in such a way that people are accountable for their decisions.

Canadian Media Guild, April 20, 2007, 1020.

Anthony Manera, a former Chair of CBC/Radio-Canada, finds it inconceivable that the Board of Directors does not have the authority to hire and fire the President/CEO. The Board of Directors cannot be responsible for the effectiveness of its corporation if it has no say in the hiring, evaluation, compensation and firing of the President/CEO.[298]

Mr. Manera also recommended that the employees be represented on the Corporation's Board. His argument was that the employees could express the viewpoint of the people who are in the field and doing the day-to-day work.[299] The Canadian Conference of the Arts made a similar recommendation.[300]

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Committee's Position

The Committee notes the repeated criticisms from witnesses about CBC/Radio-Canada's governance structure. These contradict the conclusions of the most recent special examination of CBC/Radio-Canada conducted by the OAG in 2005. In its report, the OAG wrote that, since 2000, "the Corporation has put significant effort into enhancing and modernising its governance structure, systems and practices, and improving relationships between the Chair and management as well as with external stakeholders."[301] Overall, the OAG concluded it had found "the core elements of a good governance framework in place."[302] The sole exception concerned the declarations of conflict of interest of two Board members that had not yet been presented to senior management in June 2005.

The Committee recognises that it is essential to ensure that CBC/Radio-Canada has a solid Board of Directors, where the directors have an effective role to play. The broadcasting system is undergoing major technological changes and it needs to recruit directors who are on the cutting edge of these changes. At the same time, the size and complexity of a Crown corporation like CBC/Radio-Canada also demands directors with knowledge of other areas of expertise: marketing, management, and so on.

In March 2004, the government presented a new framework for the appointment of directors of Crown corporations. The boards of directors of Crown corporations may now establish a permanent selection committee to assist them with the appointment process. This selection committee can also include eminent individuals from outside, to support the board's work. In the final analysis, it should be noted that it is still up to the Governor in Council to appoint members to the board of directors and appoint their chair.[303] The Committee believes that it is possible to have a solid board of directors without in any way diminishing the government's prerogatives.

We also come back to the evidence of the Auditor General, who expressed reservations about the idea of having CBC/Radio-Canada employees on the Board of Directors. There are very few examples of Crown corporations where the employees are represented on the board: "It is not a model for a large Crown corporation. According to current practices, employees are not represented on boards."[304] The Committee agrees that an employee presence may undermine the necessary independence of a board of directors. There is, however, nothing to prevent the creation of an advisory committee of CBC/Radio-Canada employees who would, at regular intervals, present the employees' perspective on the operation of the Corporation to the Board.

The appointment of directors is a fundamental prerogative of the shareholders of private and public corporations, including Crown corporations. Thus, as shareholders in Crown corporations, we feel that the Government of Canada should continue to appoint chairs and members of boards of directors by Order in Council.

We do feel, however, that the Board must take a more active role in the process of the selecting the Board Chair and the Corporation's President/CEO. If the Board is not part of this process, it is difficult for the Corporation's President/CEO to feel a sense of responsibility toward it. The Corporation's governance is thus weakened.

The Committee's proposed seven-year memorandum of understanding between the CBC/Radio Canada and the Government of Canada would provide an opportunity for a clear interpretation of the governance relationships between the Corporation, the Board of Directors, and the Chairperson and CEO, as well as the duties and functions of these bodies.