Opaque executive appointments may be legal but can lead to ‘Why bother?’ culture, says employment lawyer
Prime Minister Mark Carney’s recent government appointments suggest a noticeable shift from Justin Trudeau’s merit-based appointment model toward a less visible system drawing from internal lists and candidate pools
The move has raised questions about how people attain top jobs in government — which can be applied to the private sector when it comes to issues around transparency, fairness and diversity, according to Fredericton employment lawyer Chris Pelkey.
He encourages employers to use an “open by default” approach to hiring at all levels.
“If you're not selecting diverse candidates, you can ultimately have weaker decision making … this does lead to downstream impacts,” he says.
“Your employees may become disengaged, there may be cynicism, they may be carrying out business decisions that are not optimal, which will lead to poor business results.”
Morale, engagement and 'why bother’ effect
As reported by CBC, new agency heads and other high-profile federal posts, including the newly created “foreign influence transparency commissioner”, have been filled in ways that largely bypass public competitions.
While this is legal, Pelkey points out that a lack of visibility into how senior officials are selected can threaten Canadians’ trust in leaders – and the same thing can happen within the private sector.
If a new vice president simply “appears” with no posting, no visible competition and no explanation, staff will draw their own conclusions, Pelkey says: “Employees are very quick to notice when your senior roles are filled without a transparent or open or visible process.”
That can show up in increased cynicism around internal applications, more turnover among rising talent and a drop in effort, he says. Crucially, the impact on high performers is especially worrying, when potential future leaders see roles that they’re aiming for filled by friends, for example.
“If they start to feel that the process isn't going to be fair, isn't going to be open and the company is just going to pick their best friend's kid or something like that, then there will be disengagement, and it will lead eventually to kind of a ‘why bother’ culture,” Pelkey says.
“Why bother applying to positions that are pre-decided? Why bother putting in the extra effort when it's not going to result in a promotion?”
Closed pools and leadership diversity
Carney’s appointments are being filled from existing talent pools and recommendations from senior officials rather than open competitions. For diversity advocates, that raises alarms about representation at the top of public institutions, and Pelkey says the same logic applies in corporate Canada – but with a clear business case.
“Diversity in leadership leads to better outcomes for companies and organizations, better decision making, better governance, better policy,” he says.
“Things tend to go better when you have diverse leadership.”
When senior roles are filled from a small group of people who look alike, share similar educational and career paths or move in the same networks, organizations miss out on what Pelkey calls “diversity of experience.”
Executive hiring in the private sector: legal versus recommended
However, many Canadians may be surprised to learn there is far less transparency in the private sector as well, he says.
“A lot of these safeguards that they think should apply around transparency and fairness and merit and in diversity … are actually policy choices and not hard legal requirements,” he says.
“Cabinet has a very, very broad discretion over who's appointed and how they're appointed, and there are very, very few legal constraints on those appointments outside of specific statutes.”
In the private sector, many larger employers have adopted internal policies around posting and competition for fairness and consistency reasons, Pelkey says, but the main legal limit for executive hiring is human rights legislation, which extends beyond hiring practices to the entire employment relationship cycle.
For employers, human rights laws are often misunderstood in corporate diversity conversations.
“It doesn't create an obligation to have a diverse workforce, it doesn't create any sort of transparency rights, or anything like that,” he says.
“All human rights legislation says is that an employer can't discriminate against a specific applicant based on a protected characteristic.”
That means an employer can run a completely closed executive search and still be legally compliant, as long as no one is screened out because of a protected ground, says Pelkey.
Unionized employers face more constraints, but those typically come from contracts, not statutes, he states: “Collective agreements typically include job posting requirements that specify how a job needs to be posted, where it needs to be posted, how long, who gets first access.”
‘Clear and transparent rationale’ recommended
Despite the risks, Pelkey does not argue that internal or limited pools are always wrong. He acknowledges legitimate exceptions, such as urgent interim appointments or highly specialized roles. In those cases, clarity matters, and he says the question for employers is how those processes are designed and explained.
“If a company is going to go that route, they need to make sure that they have a clear and transparent rationale for using the talent pool that they're using, and they need to have clear criteria for selecting candidates that are tied to job requirements,” he says.
“That just gives rise to more transparency, that gives rise to more accountability, and that gives employees more of an incentive to pursue these opportunities.”
