Hockey Canada accepts Cromwell report, vows to 'regain the trust of Canadians'

Hockey Canada says it accepts a former Supreme Court justice's report calling on the organizationto address alack of transparency and oversight related toa controversial reserve fund used to quietly settle uninsured liabilities including sexual assault allegations.

The hockey organization's response comes a day after CBC News reportedthat the new report, commissioned by Hockey Canada, found that its reserve fund is necessary.

But the report, drafted byretired Supreme Court justice Thomas Cromwell,also found serious flaws with how the fund is handled. Cromwell concludedthat there were no protocols or procedures in place to manage the fund, that detailed records of withdrawals were kept off the booksand that Hockey Canada broke disclosure rules by failing to notify members about large payouts.

"Hockey Canada is reviewing Mr. Cromwell's recommendations, with a view to implementing them as soon as possible," Hockey Canada said in a media statement Thursday.

The organization publicly released a full copy of the interim report.

The organization hired Cromwell in August to review its governance structure as politicians and sponsors called onHockey Canada's leadership team to resign. Hockey parents were outraged to learn that the National Equity Fundsupportedin part by players' registration fees was used to pay out a settlement for a $3.5 million lawsuit.

The claimant in that lawsuit alleged eight hockey players some of them members of the 2018 World Junior hockey team sexually assaulted her.

Cromwell concluded that the National Equity Fund has paid for21 settlements based on uninsured claims 11 of them related to sexual misconduct.

WATCH/ Hockey Canada's use of funds to pay sexual assault claims flawed: report

Hockey Canada's use of fund to pay sexual assault claims flawed: report

2 years ago

Duration 2:47

Hockey Canada said Thursday there are "systemic issues" plaguing hockey in Canada. It's urging the provincial hockey federations that will vote on the recommendations in the report to "consider accepting them in their entirety." The federations must approveany changes to Hockey Canada's bylaws.

"Hockey Canada has heard from many Canadians, including members, players, parentsand corporate partners, that change is necessary to make hockey a safer environment for all participants," Hockey Canada said in the mediastatement.

"We remain fully committed to making these changes necessary to regain the trust of Canadians and address systemic issues in and around Canada's game."

Cromwell's interim report found Hockey Canada broke the rules by failing to discloseto its members six instances since1999 ofsettlements using its National Equity Fund that exceeded$500,000.

The hockey organization also failed to post on its website or inform parents that $13.65 of every individual member'sannual insurance fee to Hockey Canadaended up in the National Equity Fund. That fund was set up to pay out uninsured or underinsured liabilities,Cromwell said.

"Participants, whose registration fees are the primary source of funding for the NEF, have not been adequately informed about what proportions of fees go to fund under- and uninsured claims," he said.

Cromwell concluded the fund itself isa sound way to address the risk of uninsured and underinsured claims and failing to haveone in place would be "a serious oversight." Cromwell said he was not commenting on any particular cases like using the fund for sexual assault claims because his mandate did not include an assessment of Hockey Canada's response to any particular incident or issue.

But Cromwell found there was a lack of appropriate oversight of payments out of the National Equity Fund because Hockey Canada has no written policy governing the fund.The fund also is not sufficiently transparent and all discussions about thefundhave been conducted by the board in-camera without any recorded meeting minutes, thereport found.

WATCH/ Hockey Canada CEO, entire board of directors step down amid political and corporate pressure

Hockey Canada also said it's calling onprovincial federations to pass changes to the organization's bylaws governing the nomination process for the new board of directors.In response tomounting political and corporate pressure, the entire board of directors announced Tuesday that they would resign. Scott Smith, president and CEO of Hockey Canada, also stepped down.

Cromwell assessed the composition and diversity of Hockey Canada's board of director. Hisreport found that only 25 percent ofboard members (two directors) are female. More than 60 per cent of the directors are over 55 years old and none of them are fluently bilingual in both French and English.

One board member identified as LGBTQ+, the report said. Seven out of the eight had a significant hockey background, Cromwell found.

The report recommends that bylaws be changed to statethat no more than 60 per cent of the directors can be of the same gender, which would bring Hockey Canada in line with the federal government's governance code.

Recommended changes also includedincreasing the board's size from 9 to 13 members due to their workload. (Hockey Canada has confirmed directors are volunteers who have "a range of expenses" paid for, "including meetings, food and travel costs.")

Cromwell said directors' terms should be increased from two to three years and the chair of the board should have a six-year term limit, rather than four. All nominations also should be vetted through a nominating committee with the authority to create a shortlist of candidates, the report found.

Provincial hockey federations are meeting on Saturday in Toronto to vote on a series of recommendations that involve changing bylaws before an election to select the new board of directors on Dec. 17.

Cromwell recommended that all nominations be run through a nomination committee. He also called for better gender parity on the board and increasing the number of board members from nine to 13.

Provincial federations are also expected to vote on a recommendation to extend the terms for the board of directors and its chair.