London, Ontario leading the way in boardroom incompetence

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A great deal of noise was made last week over those public officials who once again reminded us that they are entitled to have their cake and eat it too.  Heaven forbid if senators are served cold cheese and cabinet ministers definitely deserve only the best $13 orange juice. David Dingwall should have copyrighted his ‘entitled to his entitlements.’ And this week Mike Duffy will begin to dominate the media.

But along comes sleepy London, Ontario.  London is developing a reputation of public sector employees who eat, drink and sleep at the public trough.

First there was former London Health Sciences Centre and St. Joseph’s Health Care CEO Cliff Nordal who was given a $1.2 million bonus in 2010 in addition to his club memberships, luxury vehicle, two home computers plus a personal financial planner.

Next up is Western University President Amit Chakma who received nearly $1 million in 2014.  Chakma normally earns $440,000 but received more than double his annual salary for working through his planned administrative or sabbatical leave.  This special arrangement was negotiated when he walked away from the University of Waterloo to join Western in 2009 (Chakma received $972,000 in his final year at Waterloo) and this provision was once again included in Chakma’s Western negotiated contract for the next five years ending in 2019.

It was only after days of public outrage that Chakma decided to return his ‘bonus’ and stated in a written release that, “although contractually sanctioned, in hindsight, I should have carried over my administrative leave to the end of my current term.”  One might interpret Chakma saying he was sorry that he got caught however he still believes that he was contractually entitled to his entitlements.

Not wanting to be outdone, Colleen Hanycz, the principal of Western-affiliated Brescia University College was paid $444,386 in 2013 after earning an annual salary of $222,000 in the previous three years.  We still don’t understand the reasons behind this increase as Hanycz declined comment and the Brescia spokesperson was unaware.

The behaviour of Nordal, Chakma and potentially Hanycz is outrageous and their excess compensation should be returned to the public coffers.  With the exception of Chakma, it hasn’t.  Nordal took his bonus and left the city.  Hanycz is leaving London in July to become the President of Lasalle University in Philadelphia.

All have one thing in common… their compensation packages were negotiated and approved by Londoners who volunteered their time to serve as directors at the respective institutions.  It is becoming clear that these Boards are being filled with warm bodies, donors, fundraisers and community leaders who are unqualified to execute the responsibilities required as a director.

Listening to the statements by Western University Board Chairperson Chirag Shah has been like scraping  fingernails on a chalkboard.  Shah initially defended the contract with Chakma by saying that the double payment was “not unusual” among leading universities however the London Free Press couldn’t find such arrangements with Toronto, Montreal, York, Guelph, Ryerson, McGill, McMaster, Waterloo, British Columbia and Ottawa.  Shah also could not provide an example to The Free Press and indicated “the Board is very happy… we’re paying a fair and appropriate salary.”  Apparently not, given that Chakma has returned taxpayer funds.

The Ontario government is working on implementing legislation that will roll back public sector executive salaries that are excessive.  All very good, however the underlying issue in London is that numerous individuals sitting on these and similar Boards are unqualified and incompetent.

Better governance is required.  Institutions that are funded by the government should require their board members to be qualified via some type of certification. An example is the Chartered Director program created by The Conference Board of Canada and the DeGroote School of Business at McMaster University.

The consequence of unqualified volunteer Boards has cost taxpayers in excess of $2 million in London alone.  Besides asking these executives to return their bonuses, directors who made the decision to award these outrageous bonuses should be banned from serving on the Boards at institutions that rely on government funding.  The actions of these Boards are nothing short of disgraceful in a city where 15.2% of the population is now living below the poverty line.

 

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