Summary of the Assessment Of Natural Resource Canada’s Departmental Governance

What the assessment found

1. Governance structure

The Department’s governance structure is composed of a set of Committees in place to aid in the monitoring and mitigation of risks; to inform planning and priority setting; and to support and oversee decisions related to public policy and the allocation of resources. Together these Committees directly support the Department in delivering on its mandate. Governance Committees – whether advisory or decision-making in their focus – should work together under the direction of the Chairs and ultimately the DM, to exercise a constructive challenge function and to inform decision-making. They are intended to add value to the organization by providing forums for the most important and relevant deliberations and decisions related to the Department’s mandate.

The assessment sought to determine if governance structures were designed efficiently and effectively to enable direction, priority-setting and oversight over key departmental functions, and were operating as intended.

Summary finding

• Structure - While a well-functioning governance structure is highly relevant to effective oversight of public spending, operations and results achievement, NRCan’s current structure is excessively complex and creates an oversight burden that is not commensurate with the value generated by the Committees.
• Scope and Coverage - Although the current Committee structures generally cover the key areas of the Department’s business, some important business functions do not have a governance body through which deliberations can take place. In particular, governance for integrated, horizontal matters is lacking in key areas.

2. Governance operating model

Complementing and supporting the governance structures are methods, protocols, processes and interfaces through which governance is enabled. Collectively, this suite of practices forms the Department’s governance operating model, providing the mechanisms by which governance is implemented.

In determining the adequacy, effectiveness and relevance of this operating model, the assessment examined if governance practices and controls that enable senior leaders and the Committees they participate in, to discharge their governance responsibilities are in place. This included examining if roles, responsibilities, inter-relationships and authorities of governance bodies are clearly and appropriately defined and communicated to all Committee members. The assessment also sought to determine whether well-functioning and robust processes to support effective, disciplined and value-added Committee operations were in place, to enable meaningful and relevant deliberations at the senior levels of management. The key process-related expectations included:

• Committee deliberations that are informed by timely, relevant and comprehensive inputs to better enable senior management to make informed decisions;
• Clear processes and channels of upwards, downwards and horizontal communication exist to inform employees, stakeholders and other implicated Committees on relevant decisions and/or actions taken;
• Defined and effective processes and controls exist to enable Committees to operate efficiently, effectively and transparently; and
• NRCan has mechanisms in place to ensure that Committee Chairs, Co-chairs and members adhere to the Government of Canada official language requirements.

Summary finding

• Clarity of Roles, Responsibilities and Authorities - Although most Committees are duly constituted with a formal Terms of Reference (ToR), in practice, the precise roles, focus and responsibilities of the Committees are unclear, resulting in uncertain expectations among members and an unclear value contribution to the mandate of the Department.
• Governance Administration and Meeting Management - Consistent and robust governance-related processes and protocols are needed to support the Committees’ effective and efficient operation and to foster relevant, meaningful discussions.

3. Governance culture

As noted, the Department’s governance structure and operating model enable the effective and efficient setting of direction and corporate oversight; but, by themselves, they are not sufficient to realize and sustain intended governance outcomes. Enabled by a strong “tone at the top”, the organization’s governance culture (i.e., its norms, preferences, values and behaviours) influence the way in which individuals and groups engage in matters of governance and are critical to:

• enable a strong and meaningful challenge function to be exercised by leaders, in relation to directions, operations and the management of results and risks; and,
• support the leaders in the exercise of their fiduciary duties to act in the best long-term interest of the Department as a whole.

In assessing the Department’s governance culture, the assessment examined if the Department’s governance arrangements were characterized by strong individual and Committee engagement, collegiality and constructive dissent; and a “whole of NRCan” perspective on the part of Committee members that supports broad, integrated and horizontal thinking.

Summary finding

• Engagement - NRCan’s governance culture is characterized by collegiality and a general willingness to engage in debate and offer differing opinions, all of which provides a good foundation for a well-functioning governance culture. However, because of structural and functional gaps in the governance model, the Department is neither harvesting nor benefitting from these diverse perspectives. As a result, the governance culture is not fully supporting departmental oversight and decision-making.
• Whole of NRCan Perspective - Departmental siloes perpetuate a governance culture that is not sufficiently characterized by a “whole of NRCan” perspective. A strong and consistent tone at the top is needed to address this mindset.

Recommendations and Management Action Plan