Board Governance Stream: How It Works Speakers: Hon. Reg Alcock

1. Board Governance Stream: How It Works Speakers: Hon. Reg Alcock Executive in Residence, I.H. Asper School of Business Sheryl Feller Board Chair, Red River College; Fellow Certified Management Consultant, Bluebear Enterprises

2. Session Overview • Key issues in board governance • A brief history of government and change

3. Session Overview • The board landscape in Manitoba • “One size does not fit all” - why imposing post-Enron private sector processes and practices on public and not for profit boards may not work so well

4. Session Overview continued • Recognizing how governance needs to change with the growth and maturation of the organization • What this means for optimizing your board’s effectiveness including practices such as recruitment and retention

7. Knowledge-based Economy Scientific Mgmt. Quality The Rs Continuous Chng Three Deaths Time Distance Deference WWW 1994 Digital TV Sats 500 stations CBC TV On Air - 1952 1957 85% coverage IBM PC 1980 Cable News, Drudge First Commercial use of a Computer 1951 Broadband Internet 1969 Blogs, Wikis Youtube, Facebook

8. Organizational Responses to Three Deaths • Time: • Speed, agility, responsiveness, Corporate reorganization, Focus on Core LOB, Process re-engineering, Lean,6 sigma, • Distance: • Globalization on Steroids, new competition, outsourcing, supply-chain, J.I.T. new partnerships, new forms of governance, • Deference: • Transparency, need to constantly prove value, PSAB, IFRS - new forms of control/oversight, SOXs, Enhanced Role of Audit

9. Agencies, Boards & Commissions in Manitoba

11. Traditional View of Government PSAB Definition of Government (GRE) Gov’t Dep’ts * 23 17,010* Crown Orgs 153 95,372 Crown Bus’n Ent’p 5 11,742 Gov’t Legisl’d Regul’d 60+ ??? Gov’t Funded ? ???

12. Direct Control Influence Indirect Control Accountability D.M.’s Boards Boards Boards Boards Gov’t Dep’ts 19 17,010 Crown Orgs 153 95,372 Crown Bus’n Ent’p 5 11,742 Gov’t Legisl’d Regul’d 60+ ??? Gov’t Funded ? ???

13. Where does your organization fit into the Manitoba landscape? • Looking beyond the simplicity of the private sector is essential • Consider the public sector and its unique characteristics

14. It’s Government not the Private Sector - citizens (who have rights) Henry Mintzberg: Professor of Management: McGill, in the Harvard Business Review. We are not merely “customers” of government. We are also - clients (who have complex needs) - subjects (who have obligations)

15. Why do Governments Create Boards? • Focus – Narrower scope – better quality • Specialization versus equity – community empowerment • Validation – community support • Leadership • Optimizing Org. Mission (replace markets) • Innovation • Assuming Risk • Strategic Communication

16. In determining a governance model, consider ….

17. Organizational Size Matters Large Complexity Governance Boards Regulatory Adjudicative Medium Small Management Boards Micro

18. Sector Matters Function Matters Private for Profit Not for Profit Public Sector Publicly Traded Privately Held Large Business Enterprise Service Delivery Medium Medium M Service Delivery Small Small Public Trusts Regulatory Adjudicative Advisory Personal Micro

19. The Need To Evolve • Think about where your organization is now - with respect to complexity, function, depth and skills of staff. • Have you evolved? • Consider some local examples of evolution or the need to evolve – municipal councils, credit unions, WECM

20. The Challenge for Directors • Complex Organizational Structures • Weak or non-existent market signals • Multiple Accountability Relationships • Minister/Legislature • Department • Citizens • Profession • Limited Time • 70 – 120 Hours per year

21. A Hierarchy of Board Activities Not a Governance System A Model/Standard Leadership Oversight Hygiene Factors

22. Allocating Board Time Time Allocated To Hygiene Factors Time Allocated To Leadership Activities Leadership Board Governance Activities Oversight Time Allocated To Oversight Activities Allocation Of Board Time Hygiene Factors

23. Leadership from the Board • Holder of the Mission • Planning ?? Years out • Developing the Strategic Plan (with PS characteristics) • “Optimizing the mandate” • Horizontally / Vertically • The Board is about: Culture, Ethics & People • The Board owns Strategic Communication • The Board assumes Risk for the Staff • The Board helps the Minister be a champion of the organization • The Board has a “mission”

24. What is your board’s mission? • Imagine that your board disappeared for a year or two? • Would anybody notice? Who? • What would be lost? • What do your answers tell you about your board’s key contributions, primary purpose?

25. Essentials of Effectiveness Build the Board Mission • Creating a Culture of Governance • Changing tires on a moving car • Once mission is clear, consider impact of this on recruitment – do you need certain skill sets? Do you need critical connections? • Emerging recruitment practices: advertising and application processes • Strategies for involving the next generations

26. Essentials of Effectiveness • Moving to a new model • New Governance • New Legislation • New Relationship with Government • Retention issues: We need creative ways to address them – typical challenges here include: • Pluses and minuses of term limits - Do you have them? Too short? Too long? • Compensation – Alternatives to money • Time – Provide supports to the board

27. Essentials of Effectiveness • Communication is critical • Strategic • Internal • Branding

28. Suggested Ways to Take the Plunge… To do’s: • Be clear about what kind of board you are – a board is not a board is not a board • Identify what actions you will take to strengthen your board’s leadership role and overall effectiveness . .