A Deficit of Savvy
This year the Alberta government will spend $5.6 billion educating Alberta’s 590,000 kindergarten through grade 12 students
by Marzena Czarnecka
Information is key to the effectiveness of both school boards and corporate boards, says Randall Morck. “The one thing that we have seen over and over again in the corporate scandals is one dominant personality, often the CEO, who turns the board into a nice, cosy meeting at which everyone does basically what that one person wants,” says Morck. “When you have a board in which someone feeds information to a board… the directors or trustees rely on that information. Somebody very well informed has to be in the background, making presentations to the board. Then the issue is are the directors informed enough to ask intelligent questions, or do they just sit back and say yes to everything.”
Among publicly listed corporations, says Morck, a “creative tension” between different power centres – above all the chair of the board and the CEO – is critical. “The chairman of the board and the CEO should be in a position so they can fight with each other if necessary… so they can challenge each other and ask the tough questions. If you walk away from any board meeting thinking, ‘Gee, that was a comfortable meeting,’ something is wrong.”
In other words, the job’s not supposed to be easy. School board trustees know this before they stand for election.
“We are accountable to the parents, to the community, we are accountable to the public for the provinicial dollars, we are accountable to the government,” says Bev Esslinger, chairperson of Edmonton Public. “There are no hidden numbers here. We submit our budgets to the government for approval, and if we have a deficit, it has to be an approved deficit, with a negotiated plan on how we pay it back.” Edmonton Public Schools is still paying off the deficit it incurred in 2003; the Calgary Board of Education announced in November that it’s on track to eliminate its accumulated operating deficit this fiscal year.
“We’re continually educating ourselves, taking additional training on audit committees and things like that, always continuing to bring in more information,” continues Esslinger.
This is one best practice the corporate world is also employing. “Both in the public sector and in the capital markets, boards are becoming acutely aware of the importance of orientation and continuing education for board members and directors,” says Simm. But a crash course at the beginning of term is not enough. “An emerging best practice is conducting annual self-assessments. They assess themselves individually, they assess themselves as a board, and they create a framework against which they assess themselves. The purpose of that is to really identify where the holes are and where potential holes are that need to be filled before they cause problems.”
“You always want to be current, want to make sure you’re doing everything correctly. You want to make sure you are as knowledgeable as possible when you make your decisions,” agrees Esslinger. Because you will be taken to task – by the public at large or the provincial government. In 1999, Oberg dissolved the Calgary Board and forced a byelection, calling the board “dysfunctional” (reportedly for non-financial reasons, although at the time the board did have that $30-million-plus deficit). Provincial Tory leadership candidate Mark Norris threatened to do the same to any board that operates with a deficit if he became premier.
Oberg was also on the campaign trail recently, but not picking a fight with school boards. “You either don’t like the idea of having school boards, in which case you get rid of them, or if you agree with them, give them tools to do their job properly,” he says. “I agree with them, and I think for the most part they are doing a good job. They’ve got a fair amount of tools available to them…. They have to do conservative budgeting… and plan to utilize their dollars in the right areas.”
And, as the experience of Edmonton Catholic has painfully illustrated, they must also be vigilant. And not just once a year.
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