The impish faces of Max and Moritz are cultural icons in Germany, Austria, Switzerland and other places where the German language is spoken.
They came into the world 150 years ago in the pages of Max und Moritz: Eine Bubengeschichte in sieben Streichen, considered a forerunner of newspaper comic strips.
In episode after episode, Max and Moritz engaged in cruel pranks that went unpunished until the duo was finally caught, thrown into grain sacks, delivered to a mill, ground into tiny pellets and fed to ducks.
Max and Moritz is often cited as an example of the folkloric cautionary tale.
There are usually three parts to such a tale.
First, a statement that some place, object or action is prohibited.
Second, someone ignores the warning and violates the taboo.
Third, this unfortunate person suffers a horrendous fate, usually described in grisly detail.
Since January of this year, SooToday readers have watched as Algoma Public Health's senior staff and four of its board members were ground up and fed to ducks.
We all know how the story ends: the forensic audits and provincial governance review following the discovery that interim chief financial officer Shaun Rootenberg had a criminal past; the subsquent resignations of Chief Executive Officer/ Medical Officer of Health Dr. Kim Barker, Board Chair Marchy Bruni and three other APH directors; and the related collapses of the Canal Village development and Amit Sofer's marijuana grow-op venture.
Can the APH fiasco serve as a cautionary tale for members of other local boards and commissions?
Yes, says Sault MPP David Orazietti.
Yes, says Sault Ste. Marie Mayor Christian Provenzano.
Yes, says Graham Scott, the former deputy minister of health who performed the provincial assessment on APH's governance.
Governance isn't easy
"There's a governance lesson here," says Mayor Provenzano, "not only for the board of health, but for a lot of the people that participate in governance in different agencies."
"You have a responsibility to be very active in your oversight. Governance matters and boards and committees matter. Ultimately, you're responsible," the mayor tells SooToday.
"Governance isn't easy and a lot of these positions are volunteer positions. So we have to make sure that we equip our volunteer directors and members with the right skill sets to do the job well.
"That's a takeaway for me and that's a takeaway for the city. We have to make sure that the people that we appoint to these agencies have the right skill sets to lead properly and to govern properly," Provenzano said.
"It's great that we have citizens that are well-meaning and committed to their communities, who put their hand up and say: I want to be involved in this board," adds MPP Orazietti.
"That's a big part of the process, because after all, these are voluntary boards. But we also want individuals that have appropriate skill sets for specific functions and specific types of boards. It's really important that they take the time to be familiar with the organization that they're overseeing," Orazietti said.
At APH, "the governance lapses were quite considerable," Provincial Assessor Graham Scott tells SooToday.
"You'd almost have to say that fundamentally, it was a rubber-stamp board. That simply meant it wasn't doing any of the kind of basic oversight it should do. Furthermore, they had failed as a board to keep in touch with any of the modern developments in relation to good governance practices and good governance procedures."
The following, collected by SooToday from Scott's assessment report and our own interviews, are lessons in leadership from the misadventures of Algoma Public Health.
Ontario boards of health operate under the provincial Health Protection and Promotion Act, but many of the lessons outlined here are also applicable to public and private boards governed by the Corporations Act.
- "Developing strong governance and management practices."
- "Improving outcomes, identifying gaps in training, leadership and resources, and encouraging collaboration to reaching goals."
- "Be aware of current and emerging best practices regarding board operations."
- "Board of health members must also have an understanding of their duties and responsibilities as individuals and as a group, and must have an understanding of evaluation to improve effectiveness as a board."
- "While the board of health as a governing body typically delegates the day-to-day management of the public health unit to the medical officer of health, chief executive officer and other senior management, board members retain responsibility for oversight and monitoring of the organization's operations and performance."
- Other requirements include fiduciary duties of care, loyalty and good faith.
"The principles laid out in the Ontario Public Health Standards and in common board practise are hardly new in the world of board governance and reflect practices that go back not just decades but centuries," Provincial Assessor Scott said.
Scott concluded that the APH board failed to meaningfully scrutinize the appointment process and qualifications by which Rothberg/Rootenberg was hired.
"Both the minutes and interviews showed that in matters of recruitment and reorganization the medical officer of health was largely left to her own devices," Scott said in his 56-page report.
Scott says the board is responsible for quality and success of health unit operations, while the medical officer of health must make sure the budget is sufficient to meet public health needs while managing a health unit that's efficient and cost-effective.
"The combination of board oversight and the operational leadership of the medical officer of health should provide the province, the municipalities and their residents with assurance that they are receiving their public health programs and that they are delivered at reasonable cost," Scott wrote.
'The governance and accountability of all corporations - private, public and not-for-profit - has been a subject of intensive debate and reform for the last two decades and has seen considerable work on 'best practices' to advance the quality of governance oversight and the accountabilities expected of boards,." said Scott.
At Algoma Public Health, Scott found that governance for many years was essentially provided by a triumvirate consisting of the board chair, the medical officer of health and the business administrator.
This dated back, he said, to the reign of Dr. Allan Northan (20 years as medical officer of health) and Guido Caputo (13 years as board chair).
Dr. Northan was known to run a tight ship, but that didn't justify passivity by board members, Scott said.
"No board with good oversight would have been content to rely on an unquestioned administration," he said.
"Generally, a more accountable process of oversight strengthens the performance of an organization and helps enhance its efficiency and effectiveness."
"Ask the questions that need to be asked," adds MPP Orazietti, "because that's the only way they will know as a board member whether or not the money that they're spending or the person that they're hiring or the property that they're buying is exactly what they intend to have happen. It is a very important lesson and unfortunately, we've seen it too many times across the province in different organizations and at different levels of government."
Lesson #2: Follow the money
The provincial assessor faulted APH board members for over-reliance on Chair Marchy Bruni and Dr. Barker to get the health unit back on solid financial footing after the loss related to Jeffrey Holmes.
The board should have moved quickly to set up an audit and finance committee, Scott said, and ought to have been more involved in filling the interim chief financial officer position that ended up being occupied by Shaun Rootenberg.
"Given what took place with Mr. Holmes, the previous financial officer and the previous organization over a lengthy period where people thought there was accountability, they thought there was transparency," said David Orazietti.
"But apparently over $400,000 of taxpayers' resources were not going to people in the community who relied on these public health programs. That cost the community and that's not right.
"Coming on the heels of that, you would think that the new administration and the new organization would have been more attentive to governance issues, to transparency issues, to greater involvement and accountability
"The process by which the individual was hired was completely unacceptable," Orazietti said.
Lesson #3: Pay attention to operations
Scott expressed criticism of the APH board for generally failing to oversee health unit operations, except through reports from Dr. Barker, an inexperienced medical officer of health who was clearly struggling in her attempts to lead APH's management team.
In his report, Scott described how, just five days before Christmas in 2013, Barker brought together her senior managers and accused them of insubordination for meeting behind her back.
Dr. Barker accused them of preparing a letter to the health board challenging her leadership and told them "that she had the right to fire them all," Scott reported.
"The development of such a letter has been strongly denied by all witnesses I interviewed," Scott insisted.
Barker proceeded to unilaterally reorganize her management team without "any meanginful consultation" with senior staff, he said.
She selected four executives as directors who would report directly to her, laying off three managers and demoting other program directors to managers.
She didn't post the four new positions and didn't meet individually with the three managers who were dropped.
These actions, Scott said, "immediately created a serious trust problem among all senior personnel."
Within one month, a series of meetings between senior managers, Dr. Barker and Board Chair Bruni "resulted in the final loss of confidence in Dr. Barker by both the senior management team and the board chair," Scott said in his report.
The problem, Scott said, was the board's belief that as long as it had confidence in the medical officer of health as the "one employee of the board," it was fulfilling its oversight obligations.
"This is particularly puzzling given the arrival of a new, inexperienced medical officer of health who might have benefited considerably from constructive board oversight and the ability to take advantage of the potential value-added experience of the board."
Lesson #4: Keep an eye on senior personnel decisions
"A prudent board would have probed as to the reasons for the changes and expected to hear of advantages and potential disadvantages flowing from them. This is appropriate oversight. It does not interfere with the responsibility of the medical officer of health to make personnel decisions, but takes an interest in the rationale and potential implications for the future effectiveness of the operations." Scott wrote.
"This lack of interest in how the new medical officer of health addressed personnel issues left the board largely ignorant of the impact of the changes that occurred.
"Greater interest might have resolved serious problems.The lack of board interest may also have indirectly weakened the sense of accountability of the MOH to the board in addressing personnel decisions."
Lesson #5: Open-meeting laws are important
Except for limited circumstances, Ontario public health boards are generally required to hold their meetings in public.
The provincial assessor found that starting two years ago, the Algoma Public Health started dealing with most controversial matters of substance in camera (behind closed doors).
"An overview of the minutes supports the view that almost half the items were in-camera and most would not fall under a category such as a confidential personnel matter, a planned purchase of land, labour negotiations etc. that would suggest an in-camera meeting was necessary," Scott said.
"The test seemed to be that if it might be controversial it went in-camera. This raises the question of whether they missed the point of having public meetings if they used them simply for standard reporting."
Scott was also critical of Barker and Rootenberg for interviewing one provincial appointee to the health board and then complaining to Sault MPP David Orazietti about the qualifications of appointees.
"Formally passing judgment on the skills of board members is not a management role but the occurrence certainly speaks to attitudes as to the role of the board," Scott remarked.
Lesson #6: Briefing materials should be provided well in advance of discussions on major issues
During its Barker-Rootenberg days, Algoma Public Heallth board members received little useful information in advance of meetings.
"Material was light to non-existent for some of the important in-camera meetings," Scott said.
Barker and Rootenberg demonstrated a tendency to "move quickly to act in some cases without appropriate consultation or caution," Scott added.
"Given the importance of the subject matter and a new medical officer of health, the steady hand of an experienced, questioning board could have made a difference."
One such case cited by Scott was a closed meeting on February 14, 2014 at which the APH board was asked to vote on appointing Marchy Bruni to the board of Amit Sofer's medical marijuana grow-op.
"No documentation had been provided in advance so the directors were being confronted with the proposal and related issues without advance warning," Scott said.
Lesson #7: Avoid conflict of interest
The APH board didn't take adequate care to avoid conflicts of interest, the provincial assessment concluded.
"Conflict of interest was forgotten in some crucial aspects of the work of the board and the medical officer of health. In the case of the board, conflicts of interest were not pursued in relation to the work of the auditors or of [legal] counsel to the board," Scott wrote.
"Clearing the air may have been all that was required but the failure to note conflicts, real or potential, and to adequately discuss them, falls well short of the board's fiduciary responsibility."
Amit Sofer's Algoma Medicinal Alliiance Ltd. was again cited by Scott as posing potential conflict-of-interest issues.
Lesson #8: Governance training is important
Concern was also expressed about failure of the APH board to take advantage of governance training.
Two board members were sent to a governance program and reported back to fellow board members, but there was no meaningful response, action or follow-up.
"The ministry of health had produced a number of guidelines and standards and had a major seminar, all of which was kind of ignored by them," Scott told SooToday. "So it was kind of: 'We're all right, Jack. We don't need any advice.' Which is kind of amazing, considering that all this happened shortly after you had a board problem with regards to loss of some $600,000 through a member of management. Why that wasn't a wakeup call is beyond me," Scott said.
Added David Orazietti: "In terms of governance and training, that needs to be an important part of the process of new individuals coming on boards."
Looking forward
Scott's report concluded that the APH board's failure to provide good corporate governance contributed substantially to the problems it experienced from 2013 to 2015.
"Major corrections need to be undertaken in board governance if future problems of recent magnitude are to be avoided in the future," he said.
Scott recommended that APH immediately hire a governance consultant to introduce appropriate best practices.
He also suggested merging Public Health Algoma with the District of Sudbury Public Health Unit, a move that would significantly erode local autonomy over public health and that was not immediately adopted by the province.
"The province has the authority to have dissolved the board if it so chose, but it didn't," Mayor Provenzano told SooToday.
"I respect Minister Hoskins for respecting the jurisdiction of self-governance and local government to make some decisions," the mayor said.
"There's 36 health units in the province of Ontario," said David Orazetti.
"If we want to keep this health unit in Sault Ste. Marie, with the governance and the structure that it has, then it really needs to run more efficiently and more effectively like many of the other health units in Ontario, or it won't be around," the MPP said.
"It will be around in the sense of public health programs in the community. They'll be delivered by the staff that are here. But in terms of that governance and the board and the level of administration, in terms of management, that is obviously a huge question mark," Orazietti said.
"No organization is immune from these types of challenges and it does take consistent vigilance from board members to make sure that they keep the organization on track."
So has Algoma Public Health changed anything at all?
Are local boards and committees more likely to take their governance responsibilities more seriously?
"Absolutely," Orazietti says.
"Individuals who participate on boards are becoming more aware of their responsibilities and their obligations as board members."
"We're raising the bar. Raising the standard."