governance

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Members of the Board of Management (left to right)

Bottom row: Sylvie Tessier, Linda Lizotte-MacPherson, Susan J. McArthur, Luce Samoisette, Fauzia Lalani.

Top row: Richard (Rick) Thorpe, James R. Nininger, Richard J. Daw, Norman G. Halldorson, Gordon Gillis, Raymond Desrochers, John V. Firth, Gerard J. Fitzpatrick, Robert (Bob) Manning, Myles Bourke.

overview

The Canada Revenue Agency Act provides for the establishment of a Board of Management consisting of 15 directors appointed by the Governor in Council. The Board oversees the organization and administration of the Canada Revenue Agency (CRA), including overseeing the management of its resources, services, property, personnel, and contracts.

In fulfilling this role, the Board ensures that the CRA has the strategic framework it needs to support its activities, that sound management practices are in place, and that CRA services meet the needs of Canadians in a fair, professional, and respectful manner.

introduction

The Governance chapter of the CRA's Annual Report to Parliament 2011-2012 briefly outlines the Board's contributions to ensure the CRA achieved the business outcomes identified in its Corporate Business Plan 2011‑2012 to 2013-2014, through a strong foundation of clear accountabilities, prudent financial management, sustainable technology, and a mobilized and productive workforce.

board's priorities and accomplishments for 2011-2012

As the CRA entered a period of significant change, the Board provided real-time strategic advice and input on key CRA and government–wide initiatives, while ensuring that management remained focused on core business and service commitments.

Against this backdrop, the Board closely monitored the following challenges:

• the need for the CRA to remain focused on its core business and maintain a sustainable tax and benefit system in the current environment;
• the sustainability and responsiveness of information technology mission-critical systems and infrastructure to ensure they remain secure and reliable, and respond to the increased expectations of Canadians; and
• the need to attract and retain the knowledgeable, engaged, and mobilized workforce required to preserve the trust of taxpayers and deliver core business operations.

The following pages briefly describe some of the Board's accomplishments for each of its five general areas of oversight:

• administration of the CRA;
• organization of the CRA;
• management of resources;
• management of services, and
• management of personnel.

The Board continues to oversee its own governance practices.

administration of the CRA

CRA strategy and strategic planning – In the last few budgets, the Government of Canada has committed to reduce government spending while providing quality, responsive, and transparent services to citizens. In doing so, it introduced a number of initiatives such as government–wide spending reviews and the creation of Shared Services Canada.

The CRA exemplified leadership and foresight in its response to the Government's spending reviews. Well before being asked to provide spending reduction proposals, the CRA had already started work to define its vision for 2020. A CRA-wide planning exercise called “CRA Vision 2020” was designed to lay out the future direction for the CRA and to engage employees in the transformation agenda that would keep the CRA in step with government priorities, technology, and changing citizen expectations. Vision 2020 was instrumental to the CRA in its ability to take a transformative approach to spending reduction proposals by modernizing service delivery, focusing compliance activities to where they add the most value, and maximizing productivity. In this respect, the Board provided guidance and insight on CRA's long term vision and on the development of its Corporate Business Plan for 2012-2013 to 2014-2015.

Furthermore, given the Board oversight responsibilities over the management of CRA resources, assets, and personnel, and because information technology is an integral part of the CRA's capacity to effectively and efficiently deliver its programs, in 2011-2012, the Board undertook work to review the impacts, opportunities, and risks associated with the transfer of CRA infrastructure services to Shared Services Canada. In collaboration with senior management, the Board was able to balance the best interests of the CRA with those of the Government of Canada. The Board worked with CRA management to help secure a mutually acceptable operating protocol with Shared Services Canada that would ensure stability during the transition and contribute to a strong and trust–based operating model between the two organizations.

Management oversight – An important tool the Board uses to assess CRA's management performance is the Board of Management Oversight Framework (BoMOF). Over time, the framework has evolved in concert with management best practices. This past year, the Board and CRA management collaborated in moving the framework to a risk-based assessment approach. Doing so allowed the Board to focus on areas of strategic importance, such as the CRA's readiness for change and the need for a robust measurement framework that supports the CRA business priorities. This year was the Board's fifth assessment of the CRA's management performance and it focused on 14 management expectations. See the details of the assessment at the end of Chapter 5, “our corporate foundation”.

organization of the CRA

One of the Board's responsibilities in making sure that the CRA has an appropriate internal accountability structure is to set key commitments in senior executive performance agreements. In 2011-2012, the Board set clear performance expectations for the Commissioner/Chief Executive Officer (CEO) at the beginning of the year, monitored progress throughout the year, and assessed performance at the end of the year.

The Board set the following key objectives for the Commissioner/CEO for 2011-2012:

• discussing the CRA's long term strategic direction with the Board;
• improving the CRA's performance measurement framework;
• overseeing the completion of the CRA's Integrity Framework; and
• continuing to align the CRA's human resources planning with its business planning.

The Board also continued to provide input into the performance agreements and assessments of key senior executives including the Chief Financial Officer (CFO), Chief Audit Executive, Chief Risk Officer, and assistant commissioners of the Information Technology, Human Resources, and Strategy and Integration branches.

management of resources

Each year, the Board assures itself that the CRA has a rigorous approach to resource management. This was particularly important this past year, given the context of fiscal restraint which meant CRA would review its programs and operations to see how it would contribute to deficit reduction targets. To this end, the Board monitored CRA's planned allocation of resources, performance, and spending; oversaw the approach used by the CRA to arrive at its expenditure reduction targets; and reviewed both the CRA's overall long term Strategic Investment Plan and its Information Technology Strategy and Plan for 2011-2014.

In addition, the Board assured itself that the CRA continued to improve its controls over financial management and reporting, and the security and protection of taxpayer information. The Board did this by overseeing such matters as the implementation of the CEO/CFO certification process, and approving the CRA's updated Internal Fraud Control Policy; the Policy Framework for the CRA Security and Emergency Management Programs; and the CRA Policy on the Protection of Employees, Information, and Assets.

management of services

Since the Canadian tax system is a self-assessment system, it is essential for the Board to ensure that the CRA has a sound management framework for the services it delivers. Such a framework includes performance targets and measures.

The Board oversaw the CRA's provision of services, including the security of tax and benefits information, to ensure the needs of taxpayers and clients were met in a fair and respectful manner. In doing so, the Board reviewed annual updates regarding CRA service standards, reviewed CRA service strategy, and addressed service complaints at the CRA. It also reviewed the third annual report of the Taxpayers' Ombudsman on service-related concerns and engaged with CRA on its efforts to address concerns.

The Board continued to place a focus on the CRA's pursuit of the optimum use of technology, including evolving social media, to provide timely and accessible service offerings and an integrated multi-channel service delivery approach that directs Canadians to the most effective service channel.

management of personnel

Against a backdrop of change and workplace renewal, the Board continued to monitor and provide direction to CRA's efforts in talent management, succession planning, and knowledge management.

The Board provided guidance and monitored the CRA's human resources change management strategy to ensure that the CRA was adopting an enterprise-wide approach to manage the people dimension of change, while effectively managing the human resources impacts of deficit reduction initiatives, the transfer of employees to Shared Services Canada, and the return of British Columbia provincial employees following the province's decision to restore the provincial sales tax.

The Board also provided direction and guidance on the evolution of the CRA's Integrity Framework, which formalizes the CRA's culture of integrity through workplace policies, programs, and processes. This entailed the review and approval of an updated discipline policy and discussion surrounding necessary revisions to the CRA's Code of Ethics and Conduct.

Finally, the Board closely monitored collective bargaining negotiations with the Audit, Financial and Scientific Group of the Professional Institute of the Public Service of Canada, including the review and approval of the CRA's negotiating mandate. As was the case last year when negotiating with the Public Service Alliance of Canada, these negotiations required that the CRA and the Board carefully balance the interests of the CRA while keeping in mind government-wide considerations, including the elimination of severance. A tentative agreement, which has since been ratified, was reached in March 2012.

board governance

To maintain leadership in adopting board best practices, the Board continued to examine its governance practices and looked at ways to enhance the effectiveness and efficiency of its processes, while increasing its engagement in key strategic discussions.

In 2011-2012, the Board leveraged its members' expertise and struck two ad-hoc subcommittees, the Operations Review Advisory Subcommittee and Information Technology-Focussed Operations Review Advisory Subcommittee. Both subcommittees provided time-sensitive strategic advice, insight, and guidance to management. Given the challenging environment, a number of ad–hoc teleconferences were held to engage the Board on real-time strategic discussions, in addition to the regularly scheduled teleconferences and meetings.

The Board also held its annual strategic planning meeting with the CRA's senior management to engage in discussions about the CRA's ambitious transformation agenda.

conclusion

In 2011-2012, the Board continued to provide strong oversight of the organization and administration of the CRA, including the management of its resources, services, property, personnel, and contracts. The Board also provided management with real–time strategic insights and guidance, positioning the CRA so it can advance its strategic vision, while remaining focused on its core business and mandate.

board membership

The Board of Management of the CRA is made up of 15 members appointed by the Governor in Council. They include the Chair, the Commissioner and Chief Executive Officer, a director nominated by each province, one director nominated by the territories, and two directors nominated by the federal government. Members of the Board bring an external and diverse business perspective from the private, public, and not-for-profit sectors to the work of the CRA.

The following are the Board members, as of March 31, 2012.

Susan J. McArthur, B.A., ICD.D
Chair, Board of Management
Senior Investment Banker
Jacob Securities Inc.
Toronto, Ontario

Myles Bourke, B.Comm., FCA
Corporate Director
Lethbridge, Alberta

Richard J. Daw, CFP, CMC, FCA
Executive in Residence
Faculty of Business Administration of Memorial University
St. John's, Newfoundland and Labrador

Raymond Desrochers, B.Comm., CA, CFE
Partner
BDO CANADA LLP Chartered Accountants & Consultants
Winnipeg, Manitoba

John V. Firth, BFA, EPC
Financial Advisor
Roche Firth Financial Services Ltd.
Whitehorse, Yukon

Gerard J. Fitzpatrick, FCA, TEP
Partner
Fitzpatrick & Company Chartered Accountants
Charlottetown, Prince Edward Island

Gordon Gillis, B.A., LL.B.
Corporate Director
Eureka, Nova Scotia

Norman G. Halldorson, B.Comm., CA, FCA
Corporate Director
Clavet, Saskatchewan

Fauzia Lalani, P.Eng.
Executive Consultant
Suncor Energy Services Inc.
Calgary, Alberta

Robert (Bob) Manning, BBA
Associate
Owens MacFadyen Group
Saint John, New Brunswick

James. R. Nininger, B.Comm., M.B.A., Ph.D
Corporate Director
Ottawa, Ontario

Luce Samoisette, LL.M., MS Taxation, DDN, LL.B.
President
Université de Sherbrooke
Sherbrooke, Quebec

Sylvie Tessier, B.Sc, M.B.A., P.Eng., ICD.D
Director of Professional Services
Hewlett Packard
Toronto, Ontario

Richard (Rick) Thorpe, CMA, FCMA
Corporate Director
Penticton, British Columbia

Linda Lizotte-MacPherson, B.Comm.
Commissioner and Chief Executive Officer
Canada Revenue Agency
Ottawa, Ontario

committee membership and director participation

The Board of Management is supported by four committees that undertake much of the detailed review of items brought before the Board for the Board's consideration. The following table shows the membership of each committee as well as directors' committee attendance over the course of the 2011-2012 fiscal year.

board compensation

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Date modified:

2012-11-08