June 5, 2017
Ian Warner

Best Practices That Strengthen Crown Agency Boards

The structure of a crown corporation board, and how its members manage and conduct themselves, are key to its success.

A Canadian crown corporation — sometimes called a crown agency — is a corporation owned by either the federal or provincial government. Because crown agencies generally use public funds to operate, they’re under intense scrutiny from taxpayers. They have the unique challenge of balancing the needs of public policy and commercial objectives.

Establishing a series of best practices is a way for crown agency boards to ensure they meet their goal of serving the public interest and maintaining good governance.

Weve consulted a variety of sources to come up with five best practices for crown corporation boards:

  1. Establish clear board responsibilities

It’s the board’s role to provide strategic leadership to a crown corporation and make sure it complies with legal and regulatory requirements, instead of getting caught up in day-to-day managerial tasks.

The agency should create and publish a charter that outlines its roles and responsibilities, and how they will execute them. The more defined these roles are, the better the agency is able to make strategic decisions and account for how they use public funds.

  1. Pay attention to board composition

A board is stronger when its members are diverse in gender, age and race, but also when its members come from different professional backgrounds. They should have both the skills and behavioural traits that align with the crown agency’s mission.

As a group, the board will be better able to tackle the complex strategic and financial challenges that a crown corporation faces.

  1. Create and follow a code of conduct and ethics

Board members are the leaders of an organization and their conduct is (and should be) under the microscope. Their conduct also sets the tone for how crown corporation employees conduct themselves. Because of the nature of crown agencies, board members are often subjected to the same intense scrutiny as politicians or civil servants.

A code of conduct and ethics should provide a framework that establishes clear ethical boundaries that reflect the needs and values of the particular agency.

  1. Set performance expectations

In the private sector, board members are generally motivated and measured against what the marketplace is doing. A measurement for performance is obvious: if they go out of business, they have failed. Performance expectations are less clear in a crown agency.

It’s up to the board to set performance expectations that fulfill the crown corporation’s mandate and can be appropriately measured. As examples, these could be related to financial, service quality or environmental compliance performance.

  1. Prioritize transparency and security

Ultimately, crown agencies answer to the government and to members of the public. Using public funds requires transparency about sensitive issues like compensation and vendor contracts. Aprio software makes it easy to generate reports of director renumeration and expenses, should the board need to present these documents in a short time frame.

In the same vein, boards must prioritize protecting sensitive data. Aprio software has built-in safeguards to prevent accidental email transmissions, and can provide secure access to select people only.

It’s also vital that all internal communication between board members be fair, accessible and transparent.

Because Aprio software offers every member the same access to updates or alerts, every director, no matter their opinion on an issue or where they are travelling in the moment, will receive electronic notifications of meeting times, key votes and issue progress. This eliminates any risk of bias in communication.

Curious about how Aprio can enable best practices for your board? Book a demo.

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