On June 8, the Progressive Conservative government appointed Bonnie Mitchelson as board chair for Manitoba Liquor and Lotteries Corp. and Edward Kennedy as chair of the board of Manitoba Hydro. The role of the chairs of the boards of directors of Manitoba’s five main Crown corporations is not well defined in law, has not been studied extensively, and is not well understood by most members of the public.

The role of the chair is shaped by both law and politics. This reflects the fact Crowns are legally part of government but are meant to have a measure of independence from political involvement with their ongoing operations. The result is confusion and debate over whether the role of chairs, and the boards they lead, is to promote the long-term interests of the corporation or to support the short-term political interests of the governing party.

While the position of a board chair of a Crown bears some superficial resemblance to the board chairs of private corporations, there are several fundamental differences.

It starts with the government’s control over the appointment, compensation and removal of chairs. The long-standing tradition in Manitoba is for governments, regardless of the party in power, to appoint “political friends” as chairs and members of Crown boards. Appointments occur through cabinet decisions based on recommendations from the premier. In private firms, the board itself usually selects the chair.

Even though the chairs and board members sign multi-year contracts, they serve “at pleasure,” which means they can be removed by governments at any time. When governments change, the chairs and boards are usually replaced, which means there is less continuity than on private boards.

In 2017, all but one of the nine members of the board of Manitoba Hydro resigned to protest the refusal by then-premier Brian Pallister to meet with them to discuss the future of enterprise, which was unprecedented in the history of Manitoba Crown corporations.

Compensation for chairs is set by the government, and is modest compared to the sums paid to leaders of major corporate boards. This is partly because the job is not meant to be full-time, is assumed to involve a component of public service, and is intended to prevent a public backlash for what might be seen as a lucrative patronage appointment.

Mitchelson will be paid $35,000 and Kennedy will be paid $50,000 a year, amounts many will see as generous for a part-time job.

There is authority under the Crown Corporation Governance and Accountability Act for the government to direct boards through mandate letters, which were made public under Pallister. If letters were issued by Premier Heather Stefanson to the new appointees, they have not been publicly released.

The act also allows governments to issue binding public-policy directives to Crown boards. Rather than go public, governments have been known to rely on private pressures on chairs and, given their political backgrounds, chairs may feel compelled to persuade their board colleagues to follow the government’s informal instructions, which leads to blurred accountability for actions by Crown corporations.

The chair is the main communications link with the government. Regular interaction is intended to ensure the board is aware of government thinking on key issues and to ensure there are no unwelcome surprises arising from board decision-making that might embarrass the government.

The chair designs the board agenda, ensures it focuses on strategic decisions (not on narrow operational matters), runs efficient meetings, encourages the involvement of all directors, and looks for ways to improve board decision-making.

There are clear ideological differences between the two main parties over the appropriate role of Crowns. For example, under the Pallister government’s budgetary restraint policy, Crowns were forced to reduce their management ranks by 15 per cent, reflecting the view that Crowns often seek expanded mandates. In contrast, NDP governments have used Crowns to promote broad economic and social policy goals.

Mitchelson is a former PC MLA and cabinet minister who will identify strongly with the government’s agenda. Kennedy is the former CEO of the Northwest Company who describes himself as a “neutral outsider” who would strive to balance divergent perspectives on the future of Hydro.

It will be interesting to observe how each balances the legal role of trustee of the long-term interest of the corporation with the political role of being responsive to the policy and other short-term concerns of the government.

Paul G. Thomas is professor emeritus of political studies at the University of Manitoba. He served as chair of a Crown corporation board and of several independent advisory boards to government.