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The Opportunity in ONCA: Why and How to Approach the New Ontario Not-for-Profit Corporations Act From a Governance Perspective

December 16, 2021

Posted in: WATSON Views

Not-for-profit organizations incorporated in Ontario, including charities, sports organizations, and member-based associations, have just been presented with an incredible opportunity: new legislation. Some might react with surprise, as coming into compliance with new legislation involves effort and resources, but stay with us on this.

In October 2021, the Ontario Not-for-Profit Corporations Act (ONCA) came into effect. This is part of a broader movement to modernize previous outdated NFP legislation across Canada, similar legislative changes came into effect in BC and federally.

This is more than just an exercise in compliance. The transition also offers a chance to take stock, think strategically about how to improve the organization’s governance structures and processes, tap into the Board’s perspective, and engage the membership,

Getting started

You might be unsure if ONCA will impact your organization, as there are some exceptions and variations (for example, some NFPs headquartered in Ontario transitioned to the federal act while waiting for ONCA to come into effect). So, first things first, determine if your organization is impacted – most organizations currently incorporated under predecessor legislation will be.

If you organization is impacted, a key step to tackle this transition is to start with assessing your current state. Gather the corporate documents you may not have reviewed in a while (e.g., letters patent, bylaws) and get a sense of just how much of an impact this will have on your organization.

Review key features

The NFP sector is incredibly diverse, and the impact of the legislation will be wide-ranging. Each organization will vary in terms of which new provisions are most relevant to them. Some changes to flag include enhanced member rights, voting rights and requirements at Board and general meetings, and the introduction of a new Public Benefit Corporations category.

Bring the Board on board

Management and legal counsel can, and should, handle many aspects of the transition, but it needs to be on the Board’s radar from the beginning. This is an opportunity to take a long-term strategic approach to any changes that might need to be made, and it is crucial that the Board is engaged in these conversations early on.

Think critically about what changes need to be made, considering things like:

  • What has been working well/what has not been serving us well?
  • Is our governance structure fit for purpose?
  • Do we need to review the membership structure and explore options?
  • Do we need to review the board structure and explore options?

Think strategically about those changes, asking questions such as:

  • What should we hard wire?
  • Where do we need flexibility in our structure or approach?
  • Who do we need to consult or engage? What is the membership’s perspective?

Remember your members

Do not underestimate this piece. In our experience supporting organizations through transition, effective member engagement can be critical in certain contexts. For organizations with a substantial and potentially diverse membership base, you might find a membership that wasn’t highly engaged becomes very active and interested if they perceive they might gain or lose something in the transition. Take your members along with you, engage them at the right level, and all parties will feel more satisfied with both the transition process and the outcome.

Bespoke bylaws

Model or sample bylaws will be available, and they can be a good starting point, but they won’t speak to your organization’s complexities and nuances. Work with your legal counsel or an advisor to ensure your bylaws meet your needs and are relevant to your context. Think of it like buying a suit online vs having one tailor-made to your measurements; a bespoke suit takes more time and is a bigger investment, but it will be in your closet a lot longer than one that came with express shipping and is a bit too tight in the shoulders. You don’t want to go back to your membership year after year for amendments because those sample bylaws don’t quite fit the way you thought they would.

Ask the experts

As always, WATSON is here to help. We can support you through the governance aspects of this transition in many ways, be it a governance diagnostic, advice around membership engagement, or key considerations for your Board as the transition approaches.

Don’t wait

Your organization has three years to come into compliance – October 2024. That might seem like a long time, but the clock has already started, and you don’t want to find yourself in 2024 with ill-fitting bylaws and a dissatisfied membership. Plan now, you’ll thank yourself later.

 

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WATSON Webinar: Prepare to Transition – What the New Ontario Not-For-Profit Corporations Act Means For Your Organization’s Governance

November 26, 2021

Posted in: WATSON Views, WATSON Webinars

Prepare to Transition – What the New Ontario Not-For-Profit Corporations Act Means For Your Organization’s Governance

Did you hear? The new Ontario Not-for-Profit Corporations Act (the Act) came into force in late October 2021, reflecting an important move to modernize the corporate legislation for not-for-profits in Ontario.

Organizations incorporated under Ontario provincial legislation have three years to come into compliance (sigh of relief), but that doesn’t mean you shouldn’t be thinking about the transition now. With such diversity in the sector, the new legislation will have varying impacts, and this can be an opportune time to evolve your organization’s governance structure and approach, or to make long needed changes in these key areas.

Join WATSON’s Natasha Himer in conversation with fellow governance expert Teresa Budd as they host a webinar shedding light on key changes and answering your questions.

In this session, you will:

  • Learn about key provisions in the new Act
  • Think about the transition from a governance perspective
  • Hear lessons learned from similar transitions in the BC and federal jurisdictions
  • Explore what your board should be thinking about now as your organization prepares for this transition

Date: November 30, 2021

Time: 9:00 – 9:50 am PST / 12:00 – 12:50pm EST

Cost: FREE

Register here: https://us02web.zoom.us/webinar/register/6516365815082/WN_M3FfysUJRGaotRejYKQ53A

Change comes with a lot of questions, and we want to get to them all. Send us yours in advance at academy@watsoninc.ca

 

 

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Good Governance is Not About Rules, Votes and Control

October 29, 2021

Posted in: WATSON Views

Have you, like me, been glued to the Rogers saga playing out in the media?

As a lawyer, mediator and governance advisor who has worked with hundreds of boards across sectors, including many controlled companies, it is sad to witness the dysfunction that has been laid bare for all to see.

The parties are headed to court next week to determine the legal board composition of Rogers Communications Inc. By the time this kind of action is taken, you know that something has gone sorely wrong in governance functioning.

This story reminds us that while legislation and regulatory schemes are an important part of the governance framework, good governance is more than compliance, and more than rules, votes and control.

Common vision, strong relationships, objective and rigorous decision-making processes – what have long been seen as the “soft side” of governance – are, in fact, fundamental to strong governance functioning.

Governance is about how people work together for the company to achieve success. It requires:

  • Alignment on vision and strategies, and on the values that underpin how things are done.
  • Healthy decision-making processes, particularly around potentially touchy subjects such as CEO evaluation.
  • Mature leadership, good communication, and pro-active team building to build consensus and cohesion among board members, and between the board, management and owners. Dynamics and culture rule.

This so-called soft side of governance is hard work and requires intentionality, not just from the chair, but from all members of the board and, in the case of a controlled company like Rogers, from the controlling ownership group.

Once the legal decisions are made, there will still be a lot for the Rogers board, owners and management to sort out for governance to become effective again.

I am confident there is a way forward despite this, assuming there is a presiding will to act in the best interests of the company (yes, I know it’s their duty).

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WATSON Becomes a BC Benefit Company

October 28, 2021

Posted in: WATSON Views

WATSON is thrilled to be part of the first wave of BC companies to become a Benefit Company. This further reinforces WATSON focus to work with organizations who enhance Canadian society.

 

 

FOR IMMEDIATE RELEASE – October 26, 2021

Canada’s largest multidisciplinary governance and leadership firm doubles down on its focus on promoting social value and sustainable business for Canada.

Vancouver, British Columbia – Watson Advisors Inc. (WATSON)–Canada’s largest multidisciplinary governance and leadership firm–announced it has officially become a Benefit Company. Benefit Companies, like B Corps, help redefine the role of business in Canadian society by keeping
for-profit companies accountable to conduct their business in a responsible and sustainable way and promote one or more public benefits

“We’ve always been a values-based firm,” said WATSON CEO and Founder Elizabeth (Liz) Watson, QC. “We take our purpose statement, ‘to enhance the capability of our client organizations so that they can contribute positively to Canadian society and beyond,’ very seriously. Benefit Company status is our way of further formalizing our purpose and being accountable to deliver.”

WATSON has a history of supporting organizations who are committed to a more sustainable society in the areas of leadership and governance. Its client base ranges from not-for-profit organizations who serve society to public and private corporations who incorporate social conscience and environmental impact into their corporate mission. Internally, WATSON supports employees to bring their authentic selves to work, strives for a caring and equitable work environment, and matches employee contributions to charitable causes.

“We’re now more accountable for measuring our success through service to the community and not just profits.” Liz Watson added. “And we’re excited and proud to be part of the first wave of BC companies to become a Benefit Company.”

About WATSON – https://www.watsoninc.ca/

Established in 2005, WATSON has helped hundreds of organizations establish or improve their approach to governance and leadership. We are Canada’s largest multidisciplinary governance and leadership firm (with offices in Vancouver and Toronto) and work with Canadian corporations from coast to coast. We work closely with the clients in six distinct areas: recruiting director and executive talent; establishing effective governance structures and practices; guiding boards in their role in CEO and human capital oversight; elevating board and director effectiveness; and providing approachable and practical governance education and peer learning.

About Benefit Company

In June 2020 BC Finance Minister Carole James announced that B.C. has introduced historic and collaborative legislation to become the first province in Canada allowing companies to create a corporate structure that includes giving back. A benefit company is a for-profit company that commits to conducting its business in a responsible and sustainable way. British Columbia is the first Canadian jurisdiction to implement legislation to establish benefit companies.

 

Client Contact:

Rachel O’Connor

Practice Lead | Leadership & Performance

604.283.6260

Rachel.oconnor@watsoninc.ca

Media Contact:

Suzie Cho

Practice Lead | Academy & Learning

604.283.6193

suzie@watsoninc.ca

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