Five years after the adoption of Bill 53

In a report the IGPPO recently assessed the progress of governance modernization efforts in Quebec state-owned corporations since the establishment of modern rules and new disclosure norms five years ago.

According to the report, Quebec-government owned corporations have conformed well to the disclosure provisions of Bill 53, which was adopted in 2006.

However the IGPPO believes that some improvements are needed. Bilan de la Gouvernance des Sociétés d’État, which was prepared by the IGPPO’s chairman Yvan Allaire, puts forward ten recommendations to improve governance quality:

The current law only targets 23 provincially-owned corporations however there are dozens of other organizations with large budgets that should be subject to greater transparency norms.

The law states that 2/3 of board members need to be independent, however the government still has not provided a definition of independence.

The boards of directors should make public profiles that list the expertise and competencies sought out in board members. The organization should also indicate how existing members’ qualifications rate relative to the targeted profile.

The IGPPO provides guidelines for analyzing candidacies from persons identified with the political party in power and/or who have continued financially to it.

State-owned corporations should all make public their strategic plans on the Internet and mention whether they have been approved by government.

The annual reports of state-owned corporations should be published quickly and the constraining requirement that these be tabled in the National Assembly while it is in session be removed, because this requirement imposes unnecessary delays.

The Internet sites of state owned corporations should include on the main page a button-link labeled “governance” where pertinent information can be found.

The government should better respect the governance of state-owned corporations and no longer repeat the experience of Bill 100, where specific budget cut measures were imposed without distinction between organizations. Each board of directors should decide on its own the organization’s way of contributing to the government’s objectives.

The Quebec government should consolidate its operations in a “State Ownership Agency,” through which politicians and civil servants can liaise with the heads of the state owned corporations.

The IGPPO wishes to highlight the exemplary efforts made by the government, which enabled the percentage of women on boards to increase from 27.5% to 45.8% in just 54 months. The parity objective as outlined in the law will thus likely be met by December 14, 2011.