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

Recommendations	Management Response and Action Plan
To improve the governance structure, it is recommended that the Assistant Deputy Minister, Strategic Policy and Innovation, in collaboration with the Assistant Deputy Minister, Corporate Management & Services Sector design a simplified departmental governance structure for approval by the Deputy Minister and implementation by all of senior management. The structure should be focused on a limited number of core Committees essential to informing strategic policy development, strategic decisions and the management of risks and resources in relation to the Department’s mandate and priorities. The new structure should ensure that all important perspectives related to the Department’s mandate and regulatory/policy requirements are reflected in the Committees’ composition– especially those related to all facets of security, including cyber security, Indigenous matters and NRCan’s Regions.	Management agrees. Deputy Minister's approval was obtained in December 2020 to renew NRCan’s governance structure. The new structure provides a simplified but comprehensive corporate governance structure, with a limited number of targeted Committees. Chairs and Co-Chairs have been identified, and membership established with Regional representation where relevant. Clear mandates, roles and responsibilities and linkages between Committees have also been identified in the Terms of Reference for each Committee. Together, the new core governance structure captures key perspectives related to the Department’s mandate and regulatory/policy requirements, including for consideration of key lenses such as Indigenous interests and obligations, diversity & inclusion, security and Regional perspectives. Completed renewal of the core governance structure is anticipated to be finalized by the end of March 2021. Position Responsible: Director General (DG), Planning, Results and Delivery (PDR), Strategic Policy and Innovation (SPI), in consultation with Executive Director, Planning and Operations Branch, Corporate Management & Services Sector (CMSS) and Deputy Minister's Office. Timing: March 2021.
To improve the governance operating mode, it is recommended that the Assistant Deputy Minister, Strategic Policy and Innovation: Implement a central secretariat function to provide strategic oversight, coordination and support to the core governance Committees; and Develop and implement standard operating procedures, guidance, processes and tools for the central secretariat function and the Committee Chairs to support consistent Committee administration and monitoring.	Management agrees. A Corporate Governance Secretariat (CGS) has been created and will serve as secretariat for the Strategic Management Committee (SMC). The CGS will also serve as the strategic oversight coordination and support body for the new corporate governance structure. It will monitor and report on the results of committees' activities, including through an annual ''pulse check'' to determine how effectively the new governance structure and processes are functioning. It will liaise with all corporate governance secretariats to facilitate their interconnections and sharing of information with NRCan employees. Development and implementation of standard operating procedures, processes, standard templates and guidance documents are underway. The CGS is also establishing an inventory of other existing governance entities in the Department in order to assess their relevance and ensure effective linkages with the existing core corporate governance committees. The CGS will report regularly results to SMC to ensure continuous improvements of corporate governance. Position Responsible: DG, PDR, SPI. Timing: by March 2022, to ensure full alignment/integration of other governance entities to the core corporate governance structure.
To improve NRCan’s governance culture, it is recommended that the Assistant Deputy Minister of Strategic Policy and Innovation lead the development of and, together with all Committee Chairs, implement the following mechanisms needed to ensure strong tone at the top and a mature, cohesive governance culture that provides for: a strong value proposition for Committees, anchored on a common, shared long-term vision for the Department and annual Committee plans that align with the Department’s priorities; meaningful engagement of Committee members, fostered by the Committee chairs; and, a “whole of NRCan” mindset through Committee deliberations.	Management agrees. Each corporate governance Committee has developed Terms of Reference with clear mandates, roles, responsibilities, linkages and expected outcomes to support effective and efficient decision-making in the Department, in support of NRCan’s vision, mandate and the achievement of Departmental results. Each Committee is also required to develop an annual plan with clear objectives, a forward agenda and alignment with departmental priorities. These annual plans will be presented to SMC for review and approval. Corporate Committees have also clearly defined membership lists, with identified participation requirements by alternates and delegates to focus participation and foster meaningful dialogue. Key governance principles, including expected behaviours, are captured in all Committee Terms of Reference. A Governance Charter is also under development to ensure that a ''whole of NRCan'' mindset is adopted through all Committee deliberations and will be finalized after a pulse check in the Summer of 2021. Position Responsible: DG, PDR, SPI. Timing: September 2021.