Agency Governance and the Board of Management

In 1999, the Canada Revenue Agency Act established a unique governance structure for the Canada Revenue Agency (CRA). This structure encompasses a direct, legislated relationship among the Minister of National Revenue, Board of Management, and Commissioner, as well as specific, legislated roles and responsibilities for each.

Under the CRA Act, the Minister retains overall responsibility and is fully accountable to Parliament for all aspects of the CRA's operations and administration.

The Commissioner of the CRA has a dual accountability, serving both the Minister and the Board of Management. As Chief Executive Officer (CEO), the Commissioner is responsible for the day-to-day management of the CRA. The Commissioner-CEO is accountable to the Minister for the administration of program legislation and is accountable to the Board of Management for the administration of the human resources, financial, and administrative authorities granted by the CRA Act. The Commissioner-CEO is also responsible for consulting with and providing information to federal institutions, provinces, and territories for which the CRA administers tax and benefit programs.

The Board of Management is responsible for overseeing: the organization and administration of the CRA; the management of its resources, services, property, personnel, and contracts; and the development of the Corporate Business Plan.

Under the CRA's unique governance structure, the Board has taken on many of the oversight and control functions that were formerly performed by the Treasury Board of Canada Secretariat, the Public Service Commission, and Public Works and Government Services Canada.

The Board can offer advice to the Minister, but it does not have the authority to administer legislation or to access confidential taxpayer information.

Information about Board and committee membership, as well as directors' participation rates, is presented in Schedule A.

The Board's Influence on the CRA

The Board of Management performs an effective review and approval function within its areas of responsibility. In 2005-2006, the Board provided oversight and guidance on issues such as succession planning, accounting and financial systems, infrastructure management, information technology, and performance reporting.

For CRA managers, the discipline inherent in bringing issues before the Board has strengthened the rigour of internal reviews. The Board's guidance and direction have, in turn, directed managers to pursue and implement more effective strategies.

Two key developments in 2005-2006 that will shape the Board's priorities in the years ahead are: a five-year corporate strategy for the CRA; and an enhanced focus on Board governance.

Much of the Board of Management's work focused on four priority areas, each of which is examined in more detail below:

• CRA Corporate Strategy;
• Risk Management;
• Human Resources Management; and
• Board Governance.

CRA Corporate Strategy

At a Governance Committee meeting in May 2005, Board members and CRA managers reflected on the CRA's first five years and together began developing a new, five-year corporate strategy that became known as “Agency 2010: A Blueprint for the Next Five Years”.

The three strategic themes identified in Agency 2010 are to build on the strength of our core business expertise, mature the governance model, and expand business opportunities.

Risk Management

Risk management is a key element of business sustainability, and the Board's Governance Committee guided the development of an integrated risk management policy in 2005-2006. In March 2006, the Board approved the new CRA Integrated Risk Management Policy, which formally establishes the Board's important oversight role for risk management within the CRA.

The Board will continue its role in overseeing risk management as strategies and methodologies are developed to support implementation of the new policy.

Human Resources Management

The Board's input regarding human resources management is particularly important because of the CRA's legislated flexibility and autonomy in this area.

Due to anticipated demographic shifts in coming years, the Board increased its focus on succession planning in 2005-2006. The Board reviewed a detailed report on succession plans for management positions at the CRA's most senior levels. As well, the Board reviewed strategies to support succession planning, including demographic analyses, leadership competency profiles, training programs, and the identification of high-potential employees.

The Board established selection criteria for the positions of Commissioner-CEO and Deputy Commissioner-COO (Chief Operating Officer). For the first time, the Board participated in the evaluation of the Commissioner-CEO's performance and also established measurable performance objectives for 2006-2007. These Board activities complemented the federal government's performance assessment process for deputy heads.

In 2005-2006, the Board also oversaw two key human resources initiatives: job classification reform; and the new compensation service delivery system that is being implemented at the CRA.

Board Governance

In 2005-2006, the Board's focus on governance led to the adoption of a number of best-practice principles and processes.

The Board of Management Governance Manual was revised, and a formal process was adopted for preparing Board resolutions. As well, the Board's Permanent Guidelines on Conflict of Interest were amended to reflect the October 2004 revisions to the Government of Canada's Conflict of Interest and Post-Employment Code for Public Office Holders.

The Board developed a three-year work plan to align Board planning and priorities with the three-year horizon of the CRA's Corporate Business Plan.

The Board's four committees undertake a detailed review of many items before they are brought to the full Board. In 2005-2006, the committees were restructured to better manage the business of the CRA, and each committee developed its own formal charter (available online at www.cra-arc.gc.ca/board ) and work plan to guide its activities.

Under the restructuring, the former Finance Committee was reconfigured into two new committees, namely, the Resources Committee and the Audit Committee.

The Resources Committee's mandate includes oversight of information technology, which is recognized as a top priority as the CRA deals with key legacy systems in the coming years.

The Audit Committee's mandate is to review the CRA's: accounting framework; financial and performance information; internal controls and risk tolerance; and compliance with financial and environmental legislation. The Audit Committee's charter positions the CRA to be at the forefront of the Government of Canada's agenda to strengthen accountability and audit controls.

In line with best practices in governance, all members of the Audit Committee are financially literate and all are independent of CRA management. The Committee has instituted regular in-camera sessions that exclude CRA management with the exception of the head of Internal Audit.

A Partnership that Works

Since its inception in 1999, the CRA Board of Management has evolved into a cornerstone of the management regime that effectively guides this large and diverse organization.

The Board works in partnership with CRA executives to maximize the benefits of the CRA's legislated autonomy in the management of its resources, services, property, personnel, and contracts. This partnership approach is especially important in a time of fundamental change, such as the upcoming five-year period encompassed by the “Agency 2010” corporate strategy.

As noted in this report's Introduction, no other federal entity touches the daily lives of Canadians more than the CRA. While the Board of Management is not directly involved in the delivery of tax and benefit programs, the high-level, strategic nature of the Board's work means that its influence is felt throughout the CRA's internal operations and external service delivery. Ultimately, the benefits of our effectively managed organization are felt by the clients served by the CRA and by the taxpayers and benefit recipients we deal with.

Unaudited

Date modified:

2006-11-23