05 June 2006

Good governance: goose and gander

The Canada-Newfoundland and Labrador Offshore Petroleum Board regulates the offshore oil and gas industry. The senior administrative position is chairman and chief executive officer.

The provincial government is refusing to issue an order in council appointing a new chairman and CEO arguing that the positions should be slit as a matter of "good corporate governance." A panel appointed under the legislation governing the offshore board recommended the appointment of a single individual to the combined position but added a recommendation that both the feds and the province consider splitting the job. The key thing to bear in mind is that the panel performed its function and, as the legislation provides, its appointment is binding on both the Government of Canada and the Government of Newfoundland and Labrador.

The Board of Commissioners of Public Utilities, commonly called the public utilities board regulates a variety of activities in the province including electricity prices.

The House of Assembly just passed legislation establishing that the senior administrative position at the PUB will be a chairman and chief executive officer. "The chairperson shall be the chief executive officer of the board and shall have full authority for the overall operation, management and financial administration of the board."

So why is it good governance to split the job at one regulatory board but combine the two jobs of chairman and chief executive officer at another?