Date Published: 
03/01/2012

There are a lot of bad scenarios out there for Directors.  Most Directors have to ‎stare down the reality that no matter how hard they work, they only focus on a ‎company for perhaps 200-400 hours per year. There is simply no way you can ‎keep on top of everything management does and even if you could, it would ‎not create the climate and culture of trust and empowerment that you probably ‎want to foster. ‎

And yet the nightmare remains. The “I was misled” headline that makes ‎national or international news.  A number of recent examples jump out: ‎

  • Scouts Canada is currently embroiled in accusations that it not only did ‎not do everything in its power to keep pedophiles out of the ‎organization and protect its boys, but that it also covered up its actions ‎‎(or alleged inactions).  In December 2011, the Chair of the Board of ‎Governors of Scouts Canada (Steve Kent) assured the news media that ‎every suspected incident of child abuse or abusers in the ‎organization had been reported to police.  ‎
  • Ornge, Ontario’s Air Ambulance service, sent its very credible Chairman ‎of the Board to meet with the Ontario Minister of Health to assure the ‎Minister that “No public funds were being diverted to private purposes” ‎in the increasingly complex Ornge arrangement.  ‎

In both cases, the assurances turned out not to be so well-founded. In the case ‎of Scouts, a review initiated by the Governing Board has indeed found new ‎information that is only now being sent to police for their review. At Ornge, a ‎team of forensic auditors called in after things seemed to be spinning out of ‎control has referred a number of matters to the OPP for possible consideration ‎of criminal charges.  ‎

In both cases, the Chair of the Board has been caught saying something to the ‎effect of I was misinformed when I last spoke on this matter. The Scouts ‎painted it as an error arising from lost knowledge of old events and recently ‎discovered by a thorough review.  In Ornge’s case it was reported with a little more ‎of a sense of deception. ‎

In either case, the “I was misled story” has a nasty history. It is routinely what ‎people say when testifying in parliament to parliamentary commissions. Think ‎Rupert and James Murdoch testifying the British Inquiry into phone hacking. ‎Think of the chair of the eHealth Ontario who said “We asked and they told us all ‎procurement was being done properly….”

Risk Management Perspective: 

The Dilemma for Directors is as acute as ever.  An effective risk management ‎approach is a key tool that Directors can use to ensure that their questions and ‎concerns are addressed in comprehensive and satisfactory way, and still build ‎the right culture and governance models.‎

 

Industry Group: 
Crown Corporations and Government Agencies
Industry: 
Other
Country: 
Canada
Risk Class: 
Strategic
Risk Type: 
Board Risk Processes
Risk Type: 
Leader Risks

Copyright © 2010 RiskOnBoard All rights reserved. Designed by CERAiT.com v2.1 Feb 02, 2011