Public agency governance policies

Public agencies fulfil a mandate prescribed through the Government of Alberta. These organizations operate at arms-length and outside the traditional government department structure, with accountability in accordance with their corresponding legislated mandate and to their responsible minister. Information is provided in the following guidebook and paragraphs to inform the creation, review or dissolution of public agencies in Alberta.

Creation

Public agencies provide an efficient and effective service or function for Albertans. The level of autonomy is often a key consideration in terms of identifying the mandate, role and effectiveness of the public agency.

To inform the establishment of a public agency, a well-articulated business case is developed by the responsible department. This includes:

• the rationale for the public agency
• the mandate and function
• risk and cost analysis
• a description of the structure that demonstrates:
• roles and responsibilities
• interactions with government
• authority
• accountability mechanisms, and
• reporting requirements

Review

Regular reviews of the public agency mandate and purpose assists in determining if the work or function of the agency is still relevant, fulfills the required provincial need and is aligned with government’s priorities.

All public agencies subject to Alberta Public Agencies Governance Act (APAGA) (section 19) must be reviewed minimally every 7 years to ensure the mandate is aligned with government’s direction. A review is also required if there is a significant reorganization of government functions, or if there is a need to realign the agencies’ priorities. It is also best practice for non-APAGA public agencies to conduct regular reviews of their mandate and structures.

The department is responsible to lead the public agency review and meet the legislative requirements. In addition, the responsible minister may have additional requirements to be included for review.

Dissolution

Government may choose to dissolve a public agency once it has determined that the public agency has fulfilled its mandate, or no longer serves its intended purpose. The dissolution of a public agency involves:

• review of the legislation
• dissolving the board
• rescinding members
• if applicable, repealing or amending any relevant governing legislation

If the public agency was established by order in council or ministerial order, these mechanisms would be used to dissolve the agency.

The Government of Alberta establishes public agencies primarily through legislation, which includes identifying the mandate and scope of activity. The public agency, through the board chair, is directly responsible to the minister to ensure the agency’s strategic policy direction aligns with government’s provincial goals and outcomes for Albertans. Specifically, public agencies are established at ‘arm’s length’ from government, and are provided a level of autonomy required to fulfill their mandate while being accountable to the responsible minister and Albertans.

Overall, clear roles and responsibilities are essential for effective public agency governance. The public agencies level of autonomy and accountability are also 2 key aspects of the agency-government structure. Ensuring these 2 aspects are balanced contributes to the effectiveness of agency governance.

Autonomy

Although public agencies are established to fulfil the mandate of government, they have autonomy to make decisions regarding strategic and operational direction within their scope. Effective public agency governance requires that public agencies understand the extent of their authority and work within its limits.

Accountability

‘Accountability’ refers to the responsibilities of a public agency, which includes:

• reporting to, and communicating with, the responsible minister and department regarding operations, outcomes and finances
• maintaining clear and effective communication with the responsible minister and department
• demonstrating fulfillment of the agency mandate and achievement of the organizational goals and objectives

The Government of Alberta uses a competency-based process for the recruitment and appointment of board members to public agencies, boards and commissions (public agencies).

The centralized recruitment approach ensures effective, consistent, and efficient processes are being used to fill board vacancies, including matching skills, knowledge and competencies to the requirements of each public agency board. Competency-based recruitment and appointment processes directly contribute to public agencies fulfilling their mandates and increasing public confidence. By utilizing a competency matrix and identifying skill requirements, agency governance is strengthened.

Centralized recruitment

To further increase opportunities for efficiencies and consistencies across the government, the recruitment process for public agencies is centralized through the Public Agency Secretariat (PAS).

Centralized recruitment ensures effective processes are in place in order for vacancies to be filled efficiently and with certainty that the appropriate skills and competencies are represented on boards.

Pre-appointment conflict screening

By assessing real or apparent conflict of interest of individuals before being appointed to a public agency, it is determined if a conflict impacts the decision to pursue the appointment or if it can be adequately managed. Where members are appointed with manageable conflicts, the board is made aware to make informed decisions about mitigation strategies. Where it is determined that a conflict cannot be mitigated to an acceptable level to the board or minister, the appointment should not proceed.

Board chairs and members should be familiar with the requirements under the Conflicts of Interest Act as well as the obligations for designated Senior Officials where applicable.

Competency Matrix and Definitions Library

The Competency Matrix and Definitions Library supports public agencies by contributing to effective recruitment activities, member evaluations and succession planning.

A competency matrix tool includes provides a detailed table for public agencies to identify and evaluate the critical skills required for their organization and members.

A competency definitions library supports the organization to create a common language and shared understanding of the requirements for effective board governance and member evaluation. The library is a collection of competency categories, specific skills and attributes, and corresponding definitions.

Public agencies and ethics

Public agencies and board members are required to operate in the public interest and conduct themselves in an ethical manner. More specifically, board members have a duty to act honestly, in good faith, and in the best interests of Albertans and their public agency.

An organization’s code of conduct:

• demonstrates a commitment to ethical behaviour
• ensures public agencies work in the public interest, and
• puts systems in place to manage conflicts of interest if they arise

Board members are screened for potential conflicts of interest as part of the board member appointment process.

The Conflicts of Interest Act (COIA) applies to public agencies subject to APAGA, agency members and employees. It is best practice and recommended that all non-APAGA public agencies also adopt similar conflict of interest measures.

COIA requires APAGA public agencies to have a code of conduct that requires members and employees to conduct themselves impartially and disclose real and apparent conflicts of interest. The code also sets clear expectations for senior officials, members and employees to act with integrity and impartiality, and prevent conduct that violates the public trust. In addition, senior officials in public agencies are subject to specific conflict of interest obligations under COIA.

Code of conduct review

It is best practice for codes of conduct to be reviewed and re-affirmed (or amended if required) as part of any overall review of the public agency. This may include addressing issues that have emerged regarding real or perceived conflicts of interest, mitigation, and communication within the public agency and with the respective department and Minister.

Senior official obligations

In addition to the obligations in public agency codes of conduct, COIA places statutory obligations and restrictions on senior officials, including chairs and CEOs.

Designated senior official obligations

COIA applies a higher level of scrutiny to CEOs (or equivalents) of public agencies the government has deemed to be significant. These CEOs are designated by Order in Council as ‘Designated Senior Officials’ (DSOs) and have further statutory restrictions.

Ethics Commissioner

COIA empowers the Ethics Commissioner to approve public agency codes of conduct and investigate alleged breaches.

If a code of conduct requires amendments, public agencies are required to notify the Ethics Commissioner of the changes and seek advice regarding re-approval.

Public agencies perform a significant number of services and functions on behalf of government. All agency members are provided with documentation and information through the orientation to public agency governance. A thorough orientation and a commitment to ongoing training contributes to clarity and increased understanding of roles, responsibilities and accountabilities. This strengthens the knowledge and abilities related to public agency governance, contributes to continuous improvement of the function and success of Alberta’s public agencies.

Public agencies and their respective departments are required to incorporate orientation into the onboarding process for new members. This includes information specific to their agency, and explanation of the public agency’s governance practices and expectations for their individual role.

Guided by the public agency’s identified competencies, the board and individual members should identify the areas for development and learning. This may be:

• mentorship
• conferences
• workshops
• opportunities to lead in other capacities
• formal education
• a combination of these approaches

Governance guidebooks have been developed to increase newly appointed board members’ knowledge of public agencies and their role in the Government of Alberta.

Strong and effective governance includes a strong understanding of roles, responsibilities and accountabilities. All public agencies should have clear understanding of the roles and responsibilities for its members, CEO (if applicable) and the responsible minister and department. For public agencies subject to Alberta Public Agencies Governance Act (APAGA), this occurs through a mandate and roles document (MRD).

Public agencies not subject to APAGA should have a clear understanding of their mandate, role with government, and members’ responsibilities. Such agencies and their responsible minister may develop an MRD, terms of reference, memorandum of understanding or similar document to ensure clarity of roles, responsibilities, accountability mechanisms and mandate.

Mandate and Roles Document (MRD)

Public agencies subject to APAGA are required to have an MRD developed through collaboration with their respective department and minister. APAGA (section 3) provides a description of required contents for the MRD. Specifically, this includes describing the mandate, role of government and the agency, as well as accountabilities. MRDs may also include additional content appropriate to the public agency’s purpose and structure. Overall, the MRD describes how the legal framework underlying the public agency will be applied in practice.

Succession planning for board members involves analyzing the current state of the board while also forecasting future needs. The process involves using the public agency’s identified competencies to assess the strengths and areas of development of current members in making recommendations to reappoint or recruit new members. A competency matrix has been developed to support consistency and efficiency in succession planning and member evaluation for public agencies, boards and commissions.

Importance of succession planning

Best practices requires that all public agencies engage in regular, ongoing succession planning. Succession planning includes:

• identifying the competencies required to fulfill the agency’s mandate
• informing the recruitment approach for future vacancies
• ensuring appropriate transfer of knowledge within the agency

Competency identification

A competency matrix identifies competencies and the evaluation process to identify strengths, gaps and areas of board development. This matrix will assist in identifying the skills required when recruiting new members (See also centralized recruitment above). To support effective succession planning, public agencies need to consider their current competencies as well as forecast their needs and anticipated changes for the next 3 to 5 years.

Knowledge transfer should include considerations and processes for record keeping as well as in-person transference through orientation and mentoring. A best practice for knowledge transfer and processes specific to a public agency involves current members mentoring new appointees.

Member evaluation

Succession planning is directly linked to member evaluations and informs recommendations for reappointment. The results of board member evaluations are used for:

• recruitment
• strategic planning
• education
• succession planning
• reappointments
• identifying any competencies required

Annual member evaluations are encouraged for all Alberta public agencies to also assess the performance of their boards.

Annual member evaluation is key to succession planning, as it assists in determining whether the current public agency members have the competencies required to meet the agency’s needs over the next several years. A Member Evaluation Guide (see resources below) has been developed to increase awareness of policy and best practices for evaluation of public agency members to support improved governance and competency-based recruitment.

In addition, as part of the succession planning process, and if applicable, public agencies need to anticipate whether they expect to have executive leadership changes within the next 3 to 5 years. If so, the public agency also needs to consider how the board will complement the skills of the incoming leadership.