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Corporate Governance
The accountability and governance structure for DCC’s Board of Directors is set out in Part X of the Financial Administration Act. As a Crown corporation, DCC is also subject to other legislation, including the Conflict of Interest Act, Public Servants Disclosure Protection Act, Access to Information Act and Privacy Act, as well as corporate governance policy and practice guidance from the Government of Canada.
The Board reports to Parliament through the Minister of Public Works and Government Services. The Board is accountable to the Minister for the stewardship and governance of DCC. All directors are appointed by Governor in Council, on the recommendation of the Minister. The Board possesses the expertise that DCC requires.
The Board Competency Profile lists the skills, experience and competencies required to meet the governance requirements of a Crown corporation. DCC’s board members have a strong balance of public and private sector experience and knowledge of fields relevant to the Corporation’s business lines such as engineering, construction, law, finance, and public administration.
DCC’s Board is made up of seven members – three women and four men from across Canada – who are all independent of DCC management, except for DCC’s President.
To ensure that the Directors understand their roles and responsibilities, the Board relies upon a Board of Directors Charter. This Charter is reviewed regularly to ensure it continues to be relevant. The pertinent responsibilities outlined in this document are noted in the following section, along with some key 2008-09 Board activities.
The Board fulfills some of its functions by delegating a number of its activities to board committees. There are three Committees of the Board: Audit, Governance and Nominating. These Committees serve as the initial point of contact for key issues. Each Committee has its own charter. Details of the charter of each Committee, as well as the activities of the Committees, are outlined below.
Strategic Planning
The Board provides input into DCC’s strategic planning process. It reviews and approves the Corporate Plan, as well as the annual operating and capital budgets. The Board also reviews and approves DCC’s Annual Report. This year, the Board specifically acknowledged how DCC intended to respond to the results of the 2008 special examination of the Office of the Auditor General (OAG) in the 2009–10 to 2013–14 Corporate Plan and acknowledged that it will oversee DCC’s progress in this regard.
Governance and Public Policy Objectives
The Board reviews and evaluates the principal areas of risk for DCC—as identified by its senior management and outlined in DCC’s Corporate Plan—as well as current public policy objectives, to ensure that DCC management is maintaining a balance between public policy objectives and relevant private sector business practices. In 2008–09, the Board received regular reports regarding DCC’s risk management framework and ensured that the framework is appropriate for the Corporation. Further information on DCC’s risk management framework may be found in section 5.0.
Also, the Board oversaw the introduction of a new corporate activity—DCC’s first annual public meeting of stakeholders—that was recommended in a 2005 Treasury Board document, Review of the Governance Framework for Canada’s Crown Corporations.
Values and Ethics
In promoting a culture of ethical business conduct at DCC, the Board of Directors ensures DCC maintains and updates its ongoing programs and policies related to values and ethics. The Board has endorsed DCC’s Code of Business Conduct, which is based on best practices in accountability, transparency and fairness. The Board reviews this document regularly and receives an annual report on conflict of interest issues related to DCC’s people. The members of the Board each sign an annual declaration pertaining to the Conflict of Interest Act.
Audit
The Board assesses the integrity of DCC’s internal controls through the use of internal auditors. The Board receives regular reports from DCC senior management, the OAG (external auditor), as well as the contracted independent internal auditor. During this reporting period, the Board received the results of the 2008 OAG special examination.
Mandate
The Board regularly reviews DCC’s mandate. In this reporting period, the Board acknowledged that DCC continues to meet its mandate in an effective manner. It also noted the Minister of Public Works and Government Services’ ongoing work to articulate priorities and accountabilities for DCC, as recommended in the 2005 Treasury Board document, Review of the Governance Framework for Canada’s Crown Corporations.
Succession
The Board oversees DCC’s succession planning and management development to ensure that necessary skills are identified, maintained and developed as needed. During this period, the Chair of the Board and the Chair of the Nominating Committee, along with a representative from the Prime Minister’s Office, the Privy Council Office and the Office of the Minister of Public Works and Government Services, formed the Selection Committee for the recruitment of a new President and Chief Executive Officer for DCC, and participated in the selection process. The Board assisted its fellow members in this endeavour and readied itself to provide support for the new appointment.
Performance
The Board monitors and evaluates DCC’s performance against the strategic initiatives outlined in the Corporate Plan. In the fall of 2008, the Board reviewed and approved DCC’s 2009–10 to 2013–14 Corporate Plan, which articulates specific strategic initiatives and performance measures for the next five years, as well as the operating and capital budgets for 2009–10. The Board also acknowledged that DCC noted in this plan that it intends to review the performance measures it currently uses. In the spring of 2009, as it does every year, the Board evaluated the President’s performance against corporate performance and his specific objectives.
Communications
The Chair of DCC’s Board of Directors maintains open communication with the Minister of Public Works and Government Services, as well as with DCC’s various stakeholders. For example, to better understand stakeholder needs, DCC’s Board conducted a site visit in September 2008 and saw some of the activities in which DCC’s people are involved on behalf of DND and the CF. To enhance stakeholder communications, DCC held its first annual public meeting in March 2009, which fostered open discussion among key stakeholders, the Board of Directors and DCC’s senior management. This outreach activity will be held annually.
DCC’s Board receives both initial orientation and continuing briefings about DCC’s programs and services, as well as presentations on subjects of interest to the Board. They all serve to increase the Board’s knowledge and to solidify its understanding of DCC and its operations.
Committees of the Board of Directors
All members of the Board of Directors sit on at least one of the three Committees of the Board: Audit, Governance and Nominating. The Charters of each of these Committees are outlined in the following section. The Board and the Committees meet in camera as required.
Audit Committee
The Audit Committee oversees DCC’s internal operations and provides guidance on standards of ethics, integrity and behaviour. All Audit Committee members are independent of management and are financially literate. This Committee met twice during this reporting period.
Chair: Kris Matthews. Members: Shirley McClellan and Robert Presser.
Key issues: This Committee reviewed the recommendations arising out of the OAG’s 2008 special examination of DCC, and DCC’s response to them; approved the 2008–09 audit plan of DCC’s internal audit consultants; and reviewed the new International Financial Reporting Standards.
Governance Committee
The Governance Committee develops DCC’s approach to corporate governance. This Committee evaluates DCC’s corporate governance practices and ensures they are in line with current best practices, including those of the Treasury Board, other Crown corporations and private companies. This Committee is also responsible for maintaining the board competency profile and conducting the annual board self-assessment process, which includes questions related to committees and to individual directors. This Committee met once during this reporting period.
Chair: Nancy Penner. Members: Lloyd Callahan and Robert Presser.
Key issues: This Committee initiated a new annual sign-off process for all board members concerning the Conflict of Interest Act; adopted a shortened Board Competency Profile document; oversaw the annual board assessment and individual director survey, and established a plan to implement recommendations for improvement; and reviewed two new Treasury Board draft guidance documents, published in January 2009, regarding Crown corporation governance.
Nominating Committee
As part of its mandate, the Nominating Committee advises the Minister of Public Works and Government Services regarding the appointment and re-appointment of the President and Chief Executive Officer. There was one formal meeting of this Committee during this period.
Chair: Nancy Penner. Member: Ross Nicholls.
Key issues: This Committee oversaw the initiation of the selection process for a new President for DCC and drafted the selection criteria and job description for this position.
Attendance for Board of Directors and Committee Meetings from April 1, 2008 to March 31, 2009
| Board meetings | Audit Committee | Governance Committee | Nominating Committee | |
| Callahan, Lloyd | 5/5 | 1/1 | ||
| Matthews, Kris | 5/5 | 2/2 | ||
| McClellan, Shirley | 5/5 | 2/2 | ||
| McLure, John * | 1/5 | |||
| Nicholls, Ross | 5/5 | 1/1 | ||
| Penner, Nancy | 5/5 | 1/1 | 1/1 | |
| Presser, Robert ** | 5/5 | 2/2 | 1/1 |
- * John McLure was Chair of the Board until April 10, 2008.
- ** Robert Presser was appointed Chair of the Board as of June 18, 2008.
Pursuant to the Privy Council Office’s document, Remuneration Guidelines for Part-Time Governor in Council Appointees in Crown Corporations, DCC falls into Group 3. This document sets out the retainer and per diem amounts for DCC’s board members.
| Annual retainer | Per diem | |
| Callahan, Lloyd | $ 3,800.00 | $ 300.00 |
| Matthews, Kris | $ 3,800.00 | $ 300.00 |
| McClellan, Shirley | $ 3,800.00 | $ 300.00 |
| Penner, Nancy | $ 3,800.00 | $ 300.00 |
| Presser, Robert | $ 7,500.00 | $ 300.00 |
