Governance in the Public Service

I’m feeling disheartened and concerned tonight.

Over the past decade, we have pushed and voted for accountability, transparency and good governance.  We’ve embraced the Neil McCrank Report on Boards, Agencies and Commissions, and legislated a Governance Secretariat.   We have moved to a world of Results-Based Budgeting and have graduated numerous elected officials and public servants with ICD.D (Institute of Corporate Directors) designations.

So much progress and ambition … to build a better Alberta.

Yet tonight, I have learned that the Alberta Health Services (AHS) Board stood by their conviction that certain bonuses were deserved by public officials, and now risk termination because they defied the demands of the Minister of Health.  The Minister stated that “We cannot and will not accept AHS’s decision.  It is completely out of steps with the times” and “we will ensure … they live within their means.”

This is where I’m challenged.

I watch the unplanned budget cuts to the health and education system like the rest of you.  I struggle reading Cam Tait’s articles on PDD.  I have friends whose jobs have been eliminated.  And I’m starting to feel this isn’t my Alberta anymore.

But … we put these Boards, Agencies and Commissions in place to steward these complex organizations on behalf of government.  We do so to de-politicize the decision making, and to increase accountability to us, the taxpayers.  We appoint good people, citizens of Alberta, to do five main things: (1) Hire the CEO and hold him/her accountable for performance; (2) Shape the strategic plan that delivers on the expectation of the Shareholder; (3) Approve the business plan and operating budget; (4) Assess and ensure organizational risks are adequately managed; and (5) Ensure the policies are in place to prevent risk, fraud or mismanagement.

By in large, these boards do a great job – AIMCo, ATB, AFSC, AGLC, AITF, ERCB, UofA, UofC and all the other acronyms.  So when the Minister … any Minister … decides to undermine these Boards and declare that they will make the decisions on budgets, programs or staffing, the whole concept of governance gets thrown out the window.  When such occurs, there is no longer a role for an independent Board, and the organization is nothing more than a department of the Ministry.

And I’m not just being hard on the government in power.

When the leader of the opposition states that “The Minister has to assert his authority and he has two ways to do it … he can issue a clear directive telling the Board to rescind the bonuses, or he has to fire the Board” she is equally as wrong, as both these options are also blatant political interferences.

Recent assault on Boards, Agencies and Commissions comes (1) When the government is not clear on their expectations for performance prior to budget approval; (2) When they use the budget as the tool to imply policy; or (3) When they change the rules mid-course.  Whatever the case, if Alberta is going to mature into a beacon of good governance, then we need to shift the blame away from Director education … and toward clearly articulated Shareholder expectation.

Cash Cows in FunkyTown

“Talk about it, talk about it, talk about it, talk about it, talk about it … FunkyTown.”

It was 1980.  Disco was mainstream.  John Travolta was had just released Saturday Night Fever, and a band called Lipps released this catchy tune that hit #1 on the Billboard Top 100.  Alberta was a boomtown.  People were flocking to the province, as the price of oil had risen to $37 from $3 a decade earlier.  Life was grand, and nothing could stop us.

FunkyTown was a wild success.  Fans couldn’t get enough of it, and Lipps raked in the money from royalty sales that was then spent on concert after concert where people came to hear that one song … FunkyTown.  Unfortunately, the cash and the glamour was all consuming, and Lipps never really made it back in the recording studio to make another hit.  They tried … kind of … but they had to keep feeding the FunkyTown cash cow, and eventually after five years they packed it in … and now will forever be known as a one-hit wonder.  Sad.

Cash cows are both wonderful and dangerous things.  Microsoft is a great example.  At first they generate extraordinary profits and everyone is feeling funky and can do no wrong.  Profits are used to fund experiments in other areas – but those experiments are unfortunately just that … experiments … that are started then stopped, funded then under-funded, prioritized and then deprioritized.  You see, cash cows often produce wasted efforts across organizations, as they fund experimental opportunities for diversification but as soon as the cash cow hiccups, everything is shut down and all the resources come running back to protect the beloved bovine.  Diversification never happens, and cash cows often end up being one-hit wonders.

In Alberta, we suffer from our own cash cow system, our own one-hit wonder, our own FunkyTown.  We use our cash cow to create one of the finest universities in the world.  We seek out the best and the brightest talent and encourage them to come here to create opportunities for diversification – in areas like medical devices, heart transplants, nanotechnology, engineering, cardiovascular diseases, metabolomics, virology and islet cell transplants.  And just as they are hitting their stride … just as they are moving toward commercialization … what do we do?  We see our cash cow hiccup, we shorten our breath and immediately cut budgets to the very things that could bring us our second hit song, leaving the best and the brightest in our recording studios feeling like they are nothing more than an experiment.  Sad … once again.

The winning formula for attracting investment and people to Alberta is to create a stable environment for greatness to occur.  We need to understand that our cash cow is a blessing if we are smart, and a curse if we are complacent or inconsistent.  We have a winning formula for producing second, third and fourth hit songs … but it requires commitment and dedication to the investment; a stable environment for musicians to generate hits.

So let’s stop “talking about, talking about, talking about, talking about, talking about” disrupting the winning formula we are creating … and let’s commit ourselves to establishing a stable environment that generates multiple-hit wonders.