In the memory of an attentive observer of the world of governmental and entrepreneurial affairs, never has a resignation as sudden as it was unexpected had as much media impact as the announcement made in early January by the President and Chief Executive Officer of Hydro-Québec. .
Leaving, in the middle of his first term, a job almost in osmosis with his career raises normal questions. But that the reactions are so numerous, it is surprising.
This hasty departure quickly overwhelmed the usual environment of government affairs. Several analysts are looking for the “real” reasons, developing scenarios… no need to add more. Everything has not been said and will not be. Let us recognize all the same the merits of this self-disjunction: never has Quebec talked so much about the governance of a state corporation and the limits of its mandate, or even begun to reflect on them.
Let us therefore take advantage of this opportunity to recall the powers and duties of shareholders, boards of directors and business and company managers, and compare everything with state-owned companies.
For public companies, whose shareholders elect directors annually, or for private companies where most of the managers are also owners, the big questions of power rarely arise in public. We know where the decisions come from, where we are going and who leads.
In contrast, a Crown corporation is owned by a government which generally owns 100% of the shares. A specific law (passed by the National Assembly) stipulates all the details of its management and control. This is the case for Loto-Québec, the SAQ and Hydro-Québec.
One vote every four years
Saying that Quebecers are all shareholders of these Crown corporations is true to some extent, but only by virtue of powers delegated to members of Parliament, then to the government and finally to a minister. No Quebecer is called annually to elect the board of directors of Hydro-Québec or to discuss its results, its budget and even less its strategic orientations. These powers are exercised only by the government, according to the law. Shareholders only vote once every four years, during general elections.
Sometimes a “question from the ballot box” is necessary. The answer then comes from the voter/shareholder. We must remember the 1962 elections, when the nationalization of electricity, making Hydro-Quebec a monopoly from the production to the distribution of electricity, was the subject of the hour. The choice was obvious. Another example, during the 1970 elections, the James Bay project was central, but shared the debates with the question of sovereignty. In both cases, the government fulfilled its energy commitments.
During the most recent election campaign, there was talk of evaluating the possibility of building new dams and giving Hydro-Québec the mandate to study the question.
This was not at the heart of the debates nor the issue of the elections. But following his unequivocal victory, the Prime Minister rose to the occasion with a commitment to move forward. Obviously, not all issues have the same importance, but that of “green economy 2030” seems to be one of the priorities.
So who proposes, who discusses, who recommends and who decides within the framework of a state corporation?
Now that the debate is launched, the calls for discussion will be heard and a vast project will be undertaken. Already Hydro-Québec provided, in its plan tabled in March 2022, that it was a roadmap to be adjusted over time, even over the next few decades.
When decisions have to be taken along the way, they will belong to the government, the holder of the power delegated by the voters. When these decisions commit Hydro-Québec, the government will play its role as shareholder. Obviously, everything will be in the way and the respect of the decision-making levels.
Hydro’s board of directors has an important role to play and it must be known. It is up to him to receive from his general management a plan for carrying out what is entrusted to him. Made up of people who are independent of general management and the government shareholder, the board of directors ensures the required objectivity. It is his responsibility to discuss with the managers and even to challenge them before presenting a recommendation to the shareholder. It is also by virtue of his role as facilitator and mediator that he presents the government with all the ins and outs of the case, without forgetting that at the end of the discussion, it is the shareholder who decides. .
Strengthening and renewing the powers of the board of directors and its chairman and making them known publicly would constitute an excellent bulwark against the absurd idea of making Hydro-Québec completely independent of the state.
Note: The simultaneous departures of the CEO and the chair of the board are puzzling. A new two-headed administration is only necessary when an electric shock must be administered to a society.