Governance Task Force Report

Date: May 23. 2014

Purpose:

The purpose of the Governance Task Force is to suggest best governance practices that may make the co-chair role less onerous and the management of PIA more effective. Best governance practices focus on making boards more efficient and accountable for the stewardship of the organization. These interrelated practices enable boards to govern more effectively, enrich the work of board members and enhance a board’s value to the organization it governs.

In January 2014, PIA established a Governance Task Force to address the fact that members are not willing to accept the co-chair role. This trend appears to be related to a fear that the role has become too large and overwhelming. As well, those who might assume the role are often at a point in their lives where it is not realistic for them to do so.

The Task Force makes the following recommendations to enhance the effectiveness of PIA’s governance.

1.  Support the Board’s mandate to steward PIA 

Recommendation:

The Task Force identified a need for PIA to pay closer attention to the organization’s evolving governance needs as it moves from infancy through adolescence to full maturity. PIA’s long-term health will turn on its effectiveness in stewarding the trust of its members, donors and, given its charitable status, the Canada Revenue Agency.

Usual responsibilities of a board of directors include the nomination of directors and officers, appointment of committees, hiring of the Chief Executive Officer, ensuring compliance with laws and regulations, risk management and overseeing the succession of the board and its committees. It is equally important for the board of directors to periodically revisit the organization’s mandate to determine its ongoing relevance and the organization’s commitment thereto.  As well, the board has responsibility for developing the organization’s strategic direction. Developing and adopting a strategic plan that identifies opportunities and risks is the most effective way to address this responsibility. PIA’s board carries out most of these responsibilities; however, it has not always ensured that board members are well versed in not for profit best practices governance.

It is important to note that in 2011 the new Canada Not-For-Profit Corporations Act was enacted. PIA operates under this Act and the new provisions require that we make changes to the composition of PIA’s board, our general by-law and related documentation. 

Leslie Giller is managing this for us and has drafted a revised general by-law for PIA that conforms to the new legislation. The revised by-law and related documentation will be submitted to the membership at the June 5 annual meeting for approval.

To date, the Board has been comprised of the two co-chairs and the treasurer, each holding both an officer and director position. Under the new legislation, PIA is characterized as a soliciting corporation and as such, PIA must have a minimum of 3 directors, two of whom must be “independent” which means that they cannot be officers or employees of PIA. Considering the new legislation, we are proposing that PIA’s constating documents provide for a minimum of 3 and a maximum of 10 directors and that the Board be granted the power to set the number of board members within this minimum and maximum.

In practice, we are proposing to have 5 directors consisting of a board chair who is ideally an independent, the treasurer, the secretary,  a director to liaise with the management committee (formerly the executive committee) and one other “independent” member who is not an officer or employee of PIA. However, the Board may choose to increase the size of the board up to the permitted maximum of 10.

We have provided in the by-law that the Board must meet at least quarterly and its key responsibility will be to manage or supervise the activities and affairs of PIA.

Suggested practices:

  • Ensure that at least one member of the PIA board is skilled in not-for-profit governance.
  • Alternatively, appoint and delegate specified governance responsibilities to a governance committee tasked with advising the Board on issues such as succession, nominations, board member education, personal liability, governance policies, procedures and best practices.
  • Regularly review PIA’s board governance practices and documentation.
  • Develop a skills matrix of requirements for board members to ensure that the Board as a whole is well rounded and has a wide range of skills required to make an effective board.

2.  Develop and adopt a strategic plan for achieving PIA’s long-term growth and sustainability

Recommendation:

PIA currently has a strategic planning process, however, the process has been interrupted pending the identification of new co-chairs. It is recommended that a) the strategic planning process be re-started; and b) the recommendations contained in this report, if acceptable to the strategic planning committee, be incorporated into the strategic plan. 

Suggested Practices:

  • Regularly review PIA’s strategic goals to determine the future needs of PIA.
  • Ensure that PIA’s strategic plan is implemented as part of an ongoing strategic planning and implementation process.
  • Adopt processes that measure PIA’s success in implementing each strategic goal.

3.  Develop an organizational structure designed to achieve PIA’s strategic priorities

Recommendation:

PIA’s current organizational structure is effective in meeting PIA’s operational needs but seems less effective in resolving strategic issues. This may be due to a) the lack of a current strategic plan and related policies to set direction; or b) a structure that places the responsibility for succession planning on the co-chairs rather than on an expanded board or the whole management committee. This results in “siloing” meaning that management committee members take responsibility for their area of responsibility but not for the sustainability of the organization as a whole.

The expansion and enhancement of the board’s responsibilities described above require a rethink of the composition and role of the former executive committee vis-a-vis the board’s role.  It is recommended that a full assessment of PIA’s organizational structure be a priority in the coming year and that further changes, if any, be recommended to the membership at next year’s AGM.

Suggested practices:

  • Annually assess whether each PIA committee continues to be needed to achieve PIA’s strategic objectives and make adjustments, if appropriate.
  • Where appropriate, appoint task forces charged with investigating specific strategic issues and making policy recommendations to the board and administration. Once the task force’s mandate is achieved, it can be disbanded.
  • Ensure that PIA’s board meetings are focused on issues that further PIA’s mission and vision, evaluate current policies and assess the performance of PIA’s staff and the board itself.
  • Use of a repeatable annual calendar that schedules tasks that repeat every year.
  • Assign the responsibility for developing and maintaining the annual calendar.

4.  Establish policies and practices that meet PIA’s needs

Recommendation:

Adopting a more comprehensive set of policies and practices could enhance the ongoing leadership of PIA. Policies and practices create continuity, consistency and stability in board operations. They also help form an institutional memory making it easier for new leaders to take over from outgoing ones.

Suggested practices:

  • Develop and regularly review written policies and procedures to ensure they are sufficient for the proper governance of PIA. 
  • Develop and maintain a PIA binder containing the mission statement, the strategic plan, the articles, the by-laws, and policies that address governance, board and committee composition, board operations, organizational structure, committee responsibilities, roles, membership selection criteria and process, risk management, succession planning and accountability.
  • Ensure proper financial control systems are in place.
  • Ensure procedures for identifying, assessing and managing risk are in place and followed.
  • Identify someone (or a committee) to develop and maintain the board binder
  • The PIA binder should be a digital file.   

5.  Plan for the selection, orientation, education and succession of PIA’s executive positions

Recommendation:

To be sustainable, it is essential that PIA excel at recruiting skilled and committed members to take board and committee positions. At the same time, it is important that positions be vacated to provide opportunities for others to take leadership roles and share diverse perspectives. Creating change in leadership is essential to evolution.

PIA’s recruitment and retention process for co-chairs, committee chairs and staff is fragmented. To be effective, board members must understand not only the role and responsibilities of each of these players, but also their own role and responsibilities and act accordingly. Creating limited terms and adhering to them will result in new opportunities for others. Addressing these issues will  result in stronger PIA leadership and alleviate some of the succession planning issues.

Suggested practices:

  • Develop a process to recruit new board and management (formerly executive) committee members with skills that are needed by the committee and who also fit the culture of the committee.
  • Develop a skills matrix setting out various skills required for each executive position
  • Maintain a profile on each PIA member including their skills set to identify and facilitate members’ succession to executive positions.
  • Reach out directly to identified candidates.
  • Educate new board and management committee members about their roles and responsibilities.
  • Ensure that board members are conversant with the business of operating a not-for-profit charitable organization.  
  • Encourage external professional development for staff and co-chairs on governance topics and current issues and challenges facing organizations like PIA.
  • Develop an active succession plan for co-chairs and committee chairs.
  • Set and adhere to term limits for board and committee positions. Consider a term-of-office of two years which is renewable once for a second two year term. Also consider whether the general by-law should stipulate the above noted term provisions.
  • Conduct exit interviews with outgoing board and management committee members directed at identifying the organization’s strengths and weaknesses.
  • Ensure that Directors and Officer’s Insurance is maintained.

6.  Enhance PIA’s communication and transparency with members and other stakeholders

Recommendation:

Transparency and communication is about accountability to stakeholders, a cornerstone of governance best practice. The Task Force believes that transparency and communication are paramount and should be acknowledged as a fundamental PIA practice.

PIA has a well-developed communications strategy, however, the extent to which PIA should communicate with its stakeholders (donors, members, staff, etc.) on the board’s stewardship of the organization needs to be determined.

As well, PIA would benefit from some of “Me Time”. It needs to look after its own internal needs and those of its membership by committing itself to follow best governance practices that will result in PIA being a stronger, more efficient and effective organization.

Suggested Practices:

  • Use the annual meeting as a means of reaching all stakeholders.
  • Ensure that candidacy for membership and co-chair positions is an open, transparent process.
  • Publish all relevant performance information and audited financial statements usually in the form of an annual report.