New governance model forms foundation to achieve strategic and organizational excellence: CMA Canada is introducing an innovative governance model that will enhance the organization's decision-making capability and increase the influence of the management accounting profession in the global marketplace.

At its September 2005 meeting, CMA Canada's National Board of Directors approved in principle conceptual changes presented in a new governance model aimed at enhancing the organization's decision-making capability, increasing effectiveness and efficiency in identifying and responding to market changes, and achieving organizational excellence. The CMA Canada partners are currently providing feedback on the proposed governance model, which will ultimately be presented to the CMA Canada membership for approval.

"The new governance model defines the roles, responsibilities and governance objectives and structure of each of CMA Canada's three governance constituents: national, the partnership, and each province and territory," said Ron Stoesz, Chair of CMA Canada's National Board of Directors. "Under the new model for the national and partnership constituents, three governance entities will be created: a reconstituted National Board of Directors, a Council of Chairs consisting of the chairs of the provincial and territorial partners, and a Partnership Council comprising the national, provincial and territorial chief executives. The new structure will improve the way decisions are made at every level of the CMA Canada partnership, define accountabilities, facilitate communication, and make optimum use of the skills and expertise of each constituent."

New Board

The Board of Directors, after some consultation, have determined that a governing Board of 12 members is an optimum size. A "Pan-Canadian" perspective will be enshrined in the structure to ensure that there is balanced and equitable representation of each region. A Chair and Vice Chair positions will be included in the reconstituted Board, as well as two non-member (public) positions.

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It has been proposed that Board members be appointed through a recruitment process that is based on extensive consultation with the provincial/territorial partners and their respective regions. A major factor influencing this decision is the fact that the provincial/territorial affiliates are, in fact, the major stakeholders.

The eight regional and partnership members and public representatives will be appointed for a three-year term and the terms will be staggered to ensure continuity and consistency. The Chair and Vice Chair will each have two-year terms. The two nonmembers, Chair and Vice Chair, will be appointed by the Board on the advice of the Nominating and Governance Committee. Governance and leadership qualifications, as well as Canadian demographics, will be among the criteria for appointment.

The Chair and Vice Chair will be required to have CMA Canada National Board experience to ensure familiarity with the issues. Prior to the completion of the Chair's two-year term, the Board will embark on a process of selecting from among the eight appointed members an individual for the position of Vice Chair. The province/region from which the Vice Chair is selected will appoint a member to replace the Vice Chair.

"The CMA Canada National Board is not losing any power, but the paradigm shift is significant," said Stoesz. "The new structure simply removes partnership issues from the current CMA Canada National Board agenda and places them within the partnership arena. The new CMA Canada National Board will focus on the issues for which it is directly accountable: selecting and evaluating the CEO of CMA Canada, setting the strategic direction of CMA Canada, evaluating, measuring and mitigating risk, and monitoring CMA Canada's financial accounting and internal controls. The National Board will continue to play a major role in partnership issues; however, it will now have the ability to participate in those discussions as an equal partner and not in a muddy role as overseer and partner at the same time."

Council of Chairs

The Council of Chairs represents the governance of the CMA Canada partnership. The critical management concerns of the provincial/territorial and national affiliate framework will be addressed at this level. It will include within its ranks each provincial/territorial Chair and the National Chair.

The Chair will be the CMA Canada National Board of Directors' Chair and the Vice Chair will be a chair of one of the 12 provincial/territorial partners. The Vice Chair of the Council of Chairs will be elected from the Council.

The primary responsibility of the Council of Chairs is to provide a "check and balance" to the partnership. Its two major roles will be final responsibility for dispute resolution, and ensuring the partnership's strategic consensus. Essentially, it will be accountable for ensuring that there is congruency with the direction of all partners. It will therefore develop performance measure targets for the partnership. The performance measures include brand equity levels, membership growth and employer recognition.

It is important to recognize in this context the diversity of Canada. Therefore, a decision-making process will be included in the council that recognizes that the will of the majority of affiliates must be considered.

The members of the Partnership Council (Chief Executives) will attend all meetings of the Council of Chairs as non-voting participants. It is expected that the Council of Chairs will meet a minimum of two times per year.

Partnership Council

The Partnership Council will consist of the Chief Executives of the national, provincial and territorial partners, and report to the Council of Chairs. This formalizes the roles of the Chief Executives. The agenda of the Partnership Council will include the following major items:

* The long-term plan of the partnership;

* The implementation of the partnership's initiatives;

* A comparison of the partnership's performance measures compared to targets; and

* Issues that affect the partnership.

The President and CEO of CMA Canada will be the Chair of the Partnership Council. The National Chief Executive or a delegated Chief Executive will be responsible for the lead role in coordinating and implementing specific partnership projects. Accordingly, a functional relationship will exist among the provincial/territorial Chief Executives and the National Chief Executive. A Vice Chair will be elected by the Chief Executives annually. The Partnership Council will likely meet 6-8 times annually.

CMA Canada's role

CMA Canada is accountable for the issues in the Affiliation Agreement and other matters, including the development and oversight of the Strategic Plan, research, national and federal government relations, examination marking, syllabus development and magazine publication. Other initiatives require a high degree of collaboration among the partners. CMA Canada will therfore be an equal partner in the partnership and approve initiatives, including the Strategic Plan, related strategies, standards and major initiatives such as branding. Just as importantly, the CMA Canada National Board will have its related oversight and governance responsibilities, and evaluate the performance of management through established performance measures to ensure its objectives are achieved.

The co-ordinating role for the partnership will be assigned to CMA Canada. This is why the Chair of the CMA Canada National Board will be the Chair of the Council of Chairs, and the President and CEO of CMA Canada will be the Chair of the Partnership Council. The Chair positions are not meant to reflect authority or power, but a recognition that CMA Canada is responsible for ensuring that co-ordination and integration issues are owned by a constituency whose attention is not focused on or diverted to provincial or territorial matters.

CMA Canada will continue to act as the voice of the partnership on the many issues that it will continue to face. The issues include:

* Position papers and associated reporting on accounting, management or public policy issues;

* Representing the partnership in federal government, Canadian and international initiatives;

* Representation at provincial and territorial events;

* Ensuring that CMA research related to management accounting is aligned to the CMA mission and vision; and

* Assuming the lead role in the partnership governance and management through the chair of the appropriate constituencies.

The benefits

The benefits of the new structure were clearly delineated in a task force report presented to the board.

* Provincial and territorial representatives will now have an equal voice within a structure that focuses on the direction and related issues of the partners. Rather than acting as one voice in a governance structure of 26, each province and territory will contribute to decision making in a council that is one-half the size. The opportunity for meaningful dialogue is therefore raised.

* CMA Canada Board members will now have the opportunity to focus on matters for which CMA Canada is accountable. Issues relating to governance such as strategic direction and risk can now dominate the agenda. As well, the Board can focus on the performance measures that are linked to the Strategic Plan.

* The Chief Executives will now have a formal role within the partnership governance structure. The Executives currently meet and address senior-level partnership issues; however, their role had not been formalized.

"The impact on the CMA partnership will be a positive one," said Stoesz. "Members will realize increased benefits as the Council of Chairs delves into partnership matters where the synergies and best practices of the partners can be optimized. Because of the clear delineation of accountabilities, issues can now be categorized and dealt with in the appropriate forum, rather than all being consolidated into one comprehensive and exhaustive agenda."

CMA Canada is obtaining an evaluation of the proposed new governance model from The Directors College, which was established by The Conference Board of Canada and McMaster University's Michael G. DeGroote School of Business in 2003. The college offers a comprehensive professional development program leading to the Chartered Director (C.Dir.) designation, Canada's first and only designation for corporate directors.

Contingent on approval by the CMA Canada constituents, the finalized governance structure for the CMA Canada National Board of Directors will be established through new bylaws that will be presented to CMA Canada members. Since there is no requirement for the Council of Chairs or the Partnership Council to be formally approved in the organization's by-laws, the partnership has the opportunity to test and evaluate these components of the new governance model immediately.

"The governance structure recognizes the importance of the partners' synergies," said Stoesz. "It provides for effective delegation of CMA Canada and partnership accountabilities to the appropriate constituencies, and recognizes that a formal forum for the partners must exist to enable each jurisdiction and the partnership to be more efficient."