Rich Gage, who relinquished his position as president and CEO at CBAA in October, will become a member of Nav Canada’s board of directors in April. Gage will succeed John Lawson, the former president of sales for Bombardier Business Aircraft.
Nav Canada is a not-for-profit, non-shareholder, commercial company that in 1996 acquired from Transport Canada complete responsibility for the country’s air navigation services. It is also the only totally privatized air navigation service provider (ANSP) in the world, although virtually all ANSPs–except the FAA–have now greater or lesser degrees of independence from their national governments, and all are slowly moving toward the Nav Canada model. But the company’s governance and modus operandi are different from many others, and therefore puzzling to many U.S. observers.
When the company was established, it was determined that its 15-member board of directors should include representatives from Canada’s airlines (four members), the Canadian government (three), Nav Canada’s labor unions (two) and the non-commercial sector (one). These 10 members would then appoint four independent directors from outside aviation, chosen for their overall experience in senior management or similar positions, and the 14 members would approve the appointment of a board president as the 15th member. In this way, no member group could exert undue influence over the remainder of the board. Members are initially appointed for three years, with extensions to a maximum of nine years.
Independence from Interference
Notably, federal, provincial or local legislators and their employees, along with officials or employees of any supplier to Nav Canada, are ineligible to be board members. Perhaps more than anything else, this condition exemplifies the company’s independence from external interference.
There is also an essential proviso to each board appointment. While individual members are chosen for their experience– Gage, for example, will bring extensive knowledge of non-commercial operations, as did Lawson–their primary fiduciary responsibility is to Nav Canada, and only secondarily to their previous constituency. “When we enter the boardroom,” said Gage, “we take our other hats off, and put on Nav Canada hats.” In other words, the board is there to run a commercial business in the best common interests of aviation, and confrontation is left outside.
So how do CBAA, COPA and other non-commercial entities make their views known to Nav Canada? As his predecessor did, Gage will liaise with those organizations to understand their positions on various issues and take them as broad guidance, but he will not be their official spokesman. That is the task of around 20 professionals–chosen by CBAA, COPA and similar associations, plus commercial carriers, labor unions, airports and other aviation groups–to represent their individual interests on Nav Canada’s Advisory Committee, which is charged with making reports and recommendations to the Board. But here again, officials and employees of the legislative and supplier communities are excluded.
Does Nav Canada’s approach work? It appears so. Traffic has increased and facilities have been expanded and upgraded, with fewer employees and with inflation-adjusted costs essentially unchanged for 10 years. Gage put it this way: “I just don’t know anyone in Canadian aviation who would ever want to go back to the Transport Canada system. Nav Canada has the agility to quickly adopt new technologies that are right for the aviation community at large, while providing leadership for the future.” Reflecting on his tenure on the Board, Lawson observed, “There’s no question that the model works. Nav Canada is the best managed company I’ve ever been involved with.”