THE HARBOUR AUTHORITY
The following thoughts on governance of public bodies, with particular reference to the Greater Victoria Harbour Authority , were written about June 17, 2005, when I was not on Council. I had been previously involved in harbour divestiture negotiations, and was also a former alternate director on the GVHA Board. A version of this was published by the Times-Colonist.
Since I wrote this the Victoria Airport Authority, sad to say, has moved in the same direction as the Harbour Authority – that is, it has insisted on its right to reject municipal appointees and to require “experts” for the board. It has met entirely in secret.
Victorians who share the Times-Colonist’s concern (Monitor, June 12) about the restructuring of B.C. Ferries to an independent body with little apparent accountability to the taxpayers should look a little closer to home at what is happening in our own harbour.
Local control of Victoria’s harbour, achieved when the Greater Victoria Harbour Authority (GVHA) was established three years ago, is in danger of slipping away. The GVHA’s board of directors is transforming itself into an entity that will be effectively unaccountable to any group of voters. Local citizens may end up with less influence over the harbour than when it was run by distant federal bureaucrats.
The board model that the GVHA appears to be embracing is that used by Crown corporations and health authorities. These boards must “speak with one voice”, according to the Provincial government’s guidelines. “Once debate in the boardroom is over and a decision is made, that decision stands as a united position of the board.” Discussion at board meetings must be confidential, for the obvious reason that board unity is impossible if a board member expresses a contrary opinion at a board meeting held in public.
This kind of board, operating in private, unified before the public and collectively responsible, is the basis of our cabinet form of government, and it is entirely appropriate for such a board to exercise authority delegated to it by a government. The provincial crown corporations are the creations of the Province, and their successes or failures are ultimately the Provincial government’s (deny it as they may). The airport boards are dependent on the federal government as both landlord and legislative authority, and the federal government will be responsible if the boards should ever fail to represent the public interest.
The GVHA is different. It was simply never intended that the federal, provincial or a local government would step in and assume responsibility should the GVHA be unsuccessful in meeting its mandate. Legislative and financial responsibility is shared among every level of government, including First Nations. True, municipal governments, business associations, and First Nations will be able to appoint well-qualified individuals to the GVHA board, but this is far different from knowing what those appointees are actually voting for.
Further insulating itself from any control from outside, a few weeks ago the GVHA Board increased the number of directors that are not appointed by any government or community group at all, but rather by the Board itself. At some point the Board could become completely self-perpetuating!
In the private sector boards that meet in private and barely answer to outsiders are the norm, but in the private sector a board that is lazy or incompetent is eventually snuffed out of existence as it takes its company into bankruptcy. The public monopolies are too vital (and in some cases too profitable) for this to be a solution. If there is a true public interest in the operation of a company or service, then an elected government must ultimately be responsible (if there is not, there is no reason for public ownership).
It is foolish to expect to appoint a public board that will never make mistakes – what we must fear is a board that can hide its mistakes, or a board that we cannot change. Before supporting further divestiture of lands and authority to the GVHA the local governments and business groups that appoint directors should ensure the GVHA re-establishes the open and responsive board it was intended to have.
The following extracts from a letter to the Council expands on my thoughts on board governance (when the letter was written I was not a council member).
Mayor and Council,
City of Victoria,
1 Centennial Square
Dear Mayor Lowe and Council members,
I would like to thank you for appointing me as an Alternate to the Board of the Greater Victoria Harbour Authority. I enjoyed observing the meetings of the Board and filling in for Councillor Holland once or twice when she was unable to attend. At its May 11 meeting the Board made a decision to eliminate the position of Alternate so I will no longer be serving in this capacity.
It appears that the Board felt that elimination of the Alternates was a step in a continuing process of change resulting from its examination of governance issues. The direction of these likely changes is fairly clear because the Board’s Governance Committee (as reported in the Board Minutes of December 9, 2004, posted on the GVHA’s web site) has approached the Premier’s Office for assistance. The board model supported by the Office of the Premier for use by Crown corporations, educational institutions and health authorities is outlined in detail in its Best Practice Guidelines (a similar board model is used federally by the airport boards). In this type of board directors are appointed as individuals rather than as representatives of the appointing body, and there are no alternates.
I strongly disagree with the GVHA’s apparent intention to continue to move in the direction of adopting the board model outlined in the Best Practice Guidelines.
A central principle of this board model is board unity. Board unity requires that board meetings be private, because obviously a board member cannot be required to observe the principle of board unity and refrain from expressing contrary opinions publicly if board meetings are themselves public. The GVHA’s original bylaws, in contrast, generally require that all issues save legal, land and personnel issues be discussed in public (although in practice already the majority of discussion in GVHA meetings is in camera).
The “unified board” model prescribed by the Guidelines is entirely appropriate where the board is exercising management authority delegated by a government. The Provincial crown corporations, health authorities and educational institutions are the creations of the Province, and their successes or shortcomings are ultimately the Provincial government’s. Similarly, the airport boards are dependent on the federal government as both landlord and legislative authority, and it is well understood that the federal government will ultimately be responsible if the boards should ever be seen to fail to represent the best interests of the public.
This is as it should be. If there is a public interest in the ownership of a company or institution, then an elected government should ultimately be responsible. If there is no compelling public interest being served by public control of an operation, then there is no need for public ownership.
The major problem with the GVHA becoming a unitary board is that it is not entirely clear which level of government must step in and assume responsibility should the GVHA ever be unsuccessful in meeting its mandate. The GVHA’s properties came from the federal government, but its constitution and bylaws are governed by Provincial legislation. As divestiture continues and the GVHA assumes responsibility for the seabed and for vessel movements that are now under federal jurisdiction, citizens and harbour users should know whether to complain to their MP (or perhaps MLA) or to their municipal council, business association or First Nations government if they disagree with GVHA policies.
If the “unified board” model with private discussion is adopted, the extent to which the board will be responsive to any government or local interest group will decline. A municipal government, business association, or First Nation can appoint a well qualified individual, but this is much different from knowing whether their appointee is actually representing their interests. Further, some GVHA Board members are not appointed by any government or community group at all, but rather by the Board itself. When it eliminated the Alternates the Board also increased to four the number of these directors. While the Board is not yet completely self-perpetuating, this change further dilutes the responsiveness of the GVHA to the local governments and other appointing bodies.
If the GVHA adopts a “unified board” model a city council member, band leader or association executive who disagrees with a GVHA board policy, but is forced to support it in public, will be placed in a difficult position. This kind of conflict led me to resign from the PCC when I was a Council member, and it is why municipal councillors and staff are barred from sitting on the airport boards.
The GVHA can fill an important role in advocating for the development and best use of waterfront sites, and it has already undertaken valuable improvements on its properties. It was intended to be open and accountable to the community organizations who appoint directors, but if it continues on its present course local citizens may end up with no more influence over the harbour than when it was run by distant federal bureaucrats. Before supporting further divestiture of lands and authority to the GVHA the City should ensure a return to the GVHA’s original board membership structure and to the openness of the board that was intended. The “unitary board” model advocated by the Premier’s office is inconsistent with this intent.
Thank you once again for the opportunity to serve Victoria on the Harbour Board. I should mention that should Alternates be reinstated I now feel that a member of Council should be appointed as Alternate in my place. Alternates were created to ensure that significant decisions affecting one of the appointing municipalities, First Nations or stakeholder groups could not be made with that body unrepresented because of illness or unavoidable absence, and for the City I believe this role is best filled by a Councillor.
I would be happy to further discuss my views on GVHA board governance with Council if you wish.