Friday, November 2, 2012

ICBC desperately needs real management

Ten months ago, I published Talking tough, empty words and empty head, a piece mocking Attorney General Shirley Bond in her role as lead ICBC overseer. Shortly after, Finance Minister Kevin Falcon took responsibility for the insurance company from Bond.

In August, a Ministry of Finance review confirmed what Northern Insights readers already knew from Where the money goes - ICBC top 50 - 2010. The not-so-secret story was that senior ICBC executives were plundering the corporation.

Of course, management claimed entitlement because they'd met or exceeded operating targets. This was my comment last February:
"They're running a monopoly insurance company selling liability insurance that every driver in the province must buy, by law. They can set rates at whatever level it takes to earn a profit but even that is irrelevant because the ICBC accountants have reserves for reserves and they can even defer their deferrals and come up with a paper profit. It's a well practised art where they build wiggle room into wriggle room.

"Of course, you say, executives don't earn full bonuses unless they meet their targets. That brings forward a simple question. Who set the targets? Well, the executives who take home the bonuses set the targets. It works the same way at PavCo where the top folks earn regular bonuses despite unending financial losses from operations. Amazingly though, they always make their targets."
When the ministry review was published, ICBC President and CEO Jon Schubert resigned. However, his generous friends agreed to continue paying him as a consultant until summer of 2013. (What's another half million when they've paid out $25 million in severance during the last five years?)

Pushing the CEO out the door was a start but the Board of Directors is in need of an overhaul. They collectively failed to manage and supervise the activities and affairs of the corporation. Perhaps this is not surprising because there seems to be a distinct shortage of experienced managers of organizations actually involved in tangible activities.

The recent ICBC Board included chartered accountants, finance industry people, an advertising man, an HR person and two prominent political hacks: Paul Taylor and Rick Thorpe.

Imagine how different ICBC would be if the Board of Directors included a couple of single moms who have been raising three children on about $1,000 a month or a pensioner trying to survive on even less. I guarantee the company would not have paid $25 million in severance pay or allowed one executive hired to cut costs to bill $188,681 in expenses in his second year of employment.
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3 comments:

  1. ICBC has been turned from "not a bad place to work" into a parking place and cash cow for Lieberals needing rewarding. My hubby worked there from 2000 until 2010 when he was let go. WEll, he wasn't actually let go. He was told that they were reclassifying his job and he was welcome to take the new one, which of course, was lower paid, or he could leave. I told him to tell them to stuff it where the sun don't shine.

    Shortly after he started they switched from a fair benefit package to a "performance-based" model. During his tenure, he witnessed the actual work force declining rapidly while management grew in leaps and bounds. No one knew what these managers actually did every day. But the remaining departments were consistently down-sized and eventually wiped out entirely, while ICBC kept hiring more and more managers. And when that wasn't moving along quickly enough for them, they brought in their hatchet people to find more people to cut. His department had about 20 employees when he began. By 2010 there were two, and now there are none. His department? Employee Wellness, which included employee safety, return to work, emergency management, ergonomics, etc.

    As hard as it is to believe, ICBC has an even more poisonous work culture than BC Ferries. The number of people on stress leave was absolutely astounding. People didn't want to return to work after being injured. No matter how hard a person worked, they simply couldn't keep up with the work load, as the actual workers were cut to the bone. It's a disgusting, dysfunctional mess over there and the NDP are going to be lucky if they can salvage it.

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  2. What is described by cherylb is what happens in many government orgianizations. When the federal government decides to "reorganize" to make things more efficient, you bet! First the clerks, who actually do the work are laid off, then you look around & the managers have been reclassified upwards & two new supervisors are in place.

    when a politician says, cut, they tell that to the deputy minister & their cirle. What they do is circle the wagons to ensure they & theirs keep their jobs. As they go down the food chain, in the end the only group which doesn't have enough clout in an organization to circle the wagons to protect themselves are the clerks, who do the actual work.

    What cherylb describes in very correct. One of the problems is, governments will tell organizations they want 50 positions cut. They don't say where they have to come from or what salary they are paid. So there go the service providers & the managers stay. Works every time.

    What we see at ICBC is what we see at all the health autorities & hospitals. Where once less than a dozen administrative types did all the paper work, we now have a hundred or more, with fewer beds, fewer doctors, fewer nurses, etc. The "administrators" spend all thier time in meetings analyzing the computer reports everybody loves so much. The patients, well who cares. if they die, another patient will be along in 10 minutes.

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  3. Everything Cheryl B has said is correct.

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