Status of Crown corporations directors and officers under the Conflict of Interest Act

Crown Corporation Issue Note

Issue:

Are directors and chief executive officers of Crown corporations subject to the Conflict of Interest Act?

Context:

The Conflict of Interest Act (COIA), created through the Federal Accountability Act, establishes the regime that governs the ethical conduct of public office holders, both during and after employment. 

Prior to the COIA, the principles, rules and obligations for public office holders were laid out in the Conflict of Interest and Post-Employment Code for Public Office Holders.  The COIA introduced a number of changes to the guidelines set out under the former Code, including the establishment of two definitions that identify to whom the Act applies: "public office holder" (POH) and the new category of "reporting public office holder" (RPOH).  While all POHs are subject to conflict of interest rules, most of which are set out under Part I of the COIA, those who are described as RPOHs are subject to additional measures with respect to disclosure, divestment and post-employment.

Under the COIA, all Crown corporation directors and chief executive officers (CEO) who are Governor in Council appointees, or ministerial appointees with Governor in Council approval, are designated as either an RPOH or POH.

The only exception are Governor in Council appointees to the Canada Pension Plan Investment Board (CPPIB), as subsection 108(2) of the Federal Accountability Act notes that the COIA will only come into force for the CPPIB with approval of two thirds of the provinces with two thirds of the population. The remaining Crown corporations are subject to the COIA.

Analysis:

An individual's status under the COIA, either as an RPOH or a POH, is based on the method of appointment as well as the form of remuneration provided:

• The RPOH designation captures individuals who are appointed by the Governor in Council or whose appointment is approved by the Governor in Council, and who work full-time (or work part-time but receive a salary and benefits).
• The POH designation captures individuals who are appointed by the Governor in Council or whose appointment is approved by the Governor in Council, and who work part-time.

If an individual is appointed by the board of directors (with the Governor in Council only stating the remuneration), the position does not qualify as either an RPOH or POH and therefore is not covered by the COIA.

Conclusion:

Whether Crown corporation directors and officers are captured by the Act depends on the method of appointment to the position.  In general, directors are classified as public office holders, while CEOs are identified as reporting public office holders.  Where Chairs or CEOs are appointed by the Board directly, they are not subject to the COIA.

Further Information:

Updated

July 2008

Prepared by

Treasury Board of Canada Secretariat,
Government Operations Sector,
Governance Directorate

Consultation

Office of the Conflict of Interest and Ethics Commissioner