Keep meddling out of Crown corporations

Edward Kennedy’s thoughtful and detailed summary of Manitoba Hydro’s infrastructure predicament (Manitoba Hydro plus growing debt: a bad equation, July 18) points to an issue of concern to all Manitobans — since we individually rely on dependable electricity, as well as collectively benefiting from hydro exports.

His overview, however, alludes to a more fundamental issue: that being the independence of Crown corporation boards. Readers may recall that the Hydro board — appointed in May 2016 by a Conservative government — resigned en masse in March of 2018, stating its “serious concerns regarding the circumstances surrounding the governance at Manitoba Hydro,” and that the board “had been offered no support or guidance on how to attempt to tackle those financial challenges.”

Not to be outdone, in December 2023 the NDP government in turn replaced the entire Hydro board. News reports indicated that Adrien Sala, the minister responsible for Manitoba Hydro, said the new board will focus on keeping rates low for families.

Having spent eight years on the board of the federal government’s Business Development Bank of Canada (BDC) — some of that time during the 2008 financial crisis — I’ve had the opportunity to understand the delicate balance that exists between Crown corporations and their shareholder governments.

Quite simply, “Crowns” can be very effective agents providing fiduciary oversight of situations where there may be temptation for politicians to intervene, to advance what may be objectively seen as a populist.

Another way of looking at the issue Crown corporation independence involves casting our eyes south, where U.S. President Donald Trump has been berating Federal Reserve Chair Jerome Powell — his own appointment — jawboning him to lower interest rates. History will be the ultimate judgment whether Powell and his colleagues are doing the right thing. However, with the economy performing well in spite of Trump tariffs, and U.S. inflation beginning to nudge higher, the “Fed” has shrugged off Trump’s badgering.

This is not a simple question of Powell having a strong personality. The Federal Reserve was designed to withstand baseless pressures, through multiple safeguards such as length of terms of board members, and a structure that makes sure Powell is no more than “first among equals” at the Fed board table. I suspect that many Manitobans appreciate how Powell has withstood Trump’s insults and personal attacks.

Manitoba Crowns, as evidenced by actions of both Conservative and NDP governments, have no such design safeguards. Whether it is Hydro, MPI, or Liquor & Lotteries, politicians of both stripes have shown an unfortunate tendency to meddle — not only with board composition, but even deeper into management, as evidenced by the termination of former Hydro CEO Jay Grewel.

Well-run Crowns can play an important role in the delivery of public services. The government of the day can provide nuance, through so-called “mandate letters” which suggest areas of emphasis and priority. For instance, during my time with BDC — which covered time periods where both Stephen Harper and Justin Trudeau were prime minister — the board was encouraged to prioritize digital investments. We did so, without the calvary riding in firing muskets.

The matter of Crown corporation independence is not unique to Manitoba. Politicians should respect that directors, as fiduciaries, have a duty to act in the best interest of the Crown corporation, which at times, and short term, may be at variance with what is electorally popular. Indeed, politicians should embrace and celebrate the design of governance safeguards that prevent anyone — my party or yours — from tinkering and meddling in the functioning of institutions that are critical to the general public. To follow on from Edward Kennedy’s overview, it is time for the government of the day to initiate an independent review of Crown governance processes — to build in appropriate safeguards in the interest of all Manitobans.

If Manitobans truly wish to see their Crown corporations thrive — delivering essential services with both efficiency and accountability — then reforming governance structures must be a priority. This could involve establishing fixed terms for board members, independent nominating committees, and explicit protections against arbitrary dismissal. Transparent, merit-based appointments would foster a culture where expertise, not political loyalty, becomes the chief criterion for stewardship.

Moreover, public confidence is built when Crown corporations are allowed to operate at arm’s length, guided by clear mandates but free from shifting political winds. International experience demonstrates that such models lead to long-term stability, innovation, and a focus on the public good rather than short-term electoral gains.

Ultimately, Manitobans deserve Crown corporations that are resilient, principled, and responsive to the needs of the province — not beholden to the temporary priorities of any government.

By fortifying the independence of these institutions, we invest not only in sound governance but in the future prosperity and reliability of our most vital public services.

» Brian Hayward is author of “The Great Chair: A Window on Effective Board Leadership” and a governance expert, having served on over 20 boards in Canada and internationally. He was CEO of Agricore United and United Grain Growers for over 17 years. This column previously appeared in the Winnipeg Free Press.