We found a need for special attention in three areas that are central to the way Crown corporations are governed:

* Boards of directors of Crown corporations need to be strengthened. They reflect Canada's diversity but lack other key skills and capabilities that are needed to function effectively and to carry out their important responsibilities under the Financial Administration Act for the affairs of the corporation. Corporations need to better define their requirements for skills and capabilities and communicate them to the government; the government needs to act on those requirements. Boards of directors also need to be more engaged in the selection of their chair as well as the corporation's chief executive officer (CEO). Without meaningful board involvement in the selection of the chief executive officer, his or her accountability to the board is weakened and corporate governance as a whole suffers.
* Audit committees in Crown corporations play a crucial role in financial reporting, risk management, and internal control. They are the "engine" of the board of directors. Yet half of the audit committees we examined were operating below an effective level. Serious weaknesses in an audit committee can undermine the overall strength of the board.
The government has a limited capacity for reviewing and challenging Crown corporation corporate plans as a basis for approving them. Corporate plans set out the strategic direction of a Crown corporation and are intended to be the cornerstone of the Crown corporation control and accountability framework under the Financial Administration Act. The government needs to strengthen its capacity to review and challenge these plans since, once approved, they are the basis for holding Crown corporations accountable for conforming to government policy and for their overall performance. Furthermore, there is a need for a more systematic and regular review of the relevance of Crown corporation mandates.
18.2 Weaknesses in all of these areas impede the successful implementation of Part X of the Financial Administration Act and the quality of Crown corporation governance. They have been raised many times before, in Auditor General reports and other external studies and reports, but the weaknesses remain."