Director Journal - May/June 2020

Director Journal

A P U B LI CAT I O N O F T H E I N ST I T U T E O F C O R P O R AT E D I R E CTO R S

THE FUTURE OF WORK

How boards can ease the coming labour transition

By Matthew Fortier

MAY/JUNE 2020

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CONTACT THE ICD AND APPLY TODAY. 1.877.593.7741 x230 I education@icd.ca I icd.ca/DEP

CONTENTS

Director Journal Editorial EDITOR Simon Avery ART DIRECTOR Lionel Bebbington CONTRIBUTORS Richard Blackwell, Jeff Buckstein, Guy Dixon, Jane Gadd, Virginia Galt, J.P. Moczulski, Serge Rivest, Barbara Smith, Prasanthi Vasanthakumar, Heather Wilson

Executive Lead

Departments Editor’s note No quick fixes

CEO insights

Rahul Bhardwaj highlights compassionate leadership during Covid-19

Dispatches

Password protection, questioning capitalism and female directors’ environmental wisdom

Matthew Fortier Vice-president, policy and public affairs

Issues

Institute of Corporate Directors

Directors’ dilemma

Rahul Bhardwaj - President and CEO Patricia Fletcher - Vice-president, education Ken Gibson - Chief administrative officer Jan Daly Mollenhauer - Vice-president sales, marketing and membership Kathryn Wakefield - Vice-president, chapter relations

Finally Content Eric Schneider - President Abi Slone - Creative director Dana Francoz - Advertising sales dana.francoz@finallycontent.com 416-726-2853

Corporate citizenship at its best

Should board assessment processes include feedback from the senior management team?

Directors on the move

Recent board appointments across the country

ICD happenings

Just before chapters shuttered, an informative discussion on boards and social media

COVER PHOTOGRAPHY BY UNSPLASH

Bâtir la confiance envers les organisations canadiennes est primordial. À l’Institut des administrateurs de sociétés (IAS), nous croyons que cela commence par un bon leadership et une bonne gouvernance. Les administrateurs doivent gouverner en étant informés, préparés, intègres, connectés, courageux et ouverts sur le monde.

Dans les pages qui suivent, vous trouverez des articles réfléchis et provocateurs qui explorent ces qualités de leadership essentielles.

2701 – 250 Yonge Street, Toronto, Ontario M5B 2L7 T: 416-593-7741 F: 416-593-0636 E: info@icd.ca ISSN 2371-5634 (Print) www.icd.ca ISSN 2371-5650 (Online) The ICD welcomes a diversity of opinion for inclusion in Director Journal. The contents of this publication do not necessarily reflect the opinions of the ICD, its partners, its sponsors, or its advertisers. Readers are encouraged to consider seeking professional advice and other views.

To request reprints of articles, please contact info@icd.ca

06 11 12 45 46

Policy perspective

49

Parting shot

50

Matthew Fortier on how newly empowered employees are getting it done

Remembering another time Building trust and confidence in Canadian organizations is imperative. At the Institute of Corporate Directors (ICD), we believe that this starts with the right leadership and good governance. Directors must lead by being informed, prepared, ethical, connected, courageous and engaged with the world. In the pages that follow, you will find thoughtful and provocative articles that explore these essential leadership qualities.

04 05

Features ICD Fellow’s profile

14

Cover story

20 28

David McAusland’s unpredictable career path has given him a broad perspective on business, government and society

Governing the future of work

Legislation

What boards need to know about recent amendments to the Canada Business Corporations Act

In conversation

Margaret Franklin is the investing world’s new social champion

Not-for-profits

The art of good governance

34 38 ICD.CA | 3

EDITOR’S NOTE

No quick fixes How this pandemic will change society is up to all of us

DIRECTOR JOURNAL is a bi-monthly publication that tries to take a long view on timely issues. Most often the schedule accommodates this approach, but when ICD’s editorial team sat down to plan this issue in early February, we were all living in a different world. You’ll remember that place – busy work spaces, crowded streets, after-work socializing and weekend restaurant meals.

The stories here were written in a different light than we see today. Subsequent issues of Director Journal will explore the new and emerging demands that the global pandemic has foisted on boards and leaders in business, government and the not-for-profit sector.

One thing we already know is that there is no quick fix for the crisis. No matter what the most bullish of stock market pundits say about quarterly forecasts and a “V-shaped” recovery, the effects of Covid-19 and all the measures of protection we are taking will reverberate for a long time, and when the global pandemic is one day behind us, our world will have changed for good. Canada will become a more independent country, the workplace more digital, and our health-care system made more robust. There will also be mountains of debt and perhaps a shift in societal values about what’s truly important in our lives and for the country.

For the moment, the best advice we can offer at Director Journal is to look after yourselves, your families and your communities, and do your best to stay resilient in the face of coming challenges. DJ Le Director Journal tente de poser un regard à long terme sur les questions d’actualité. La plupart du temps, l’échéancier. Mais lorsque l’équipe éditoriale s’est réunie pour préparer ce numéro, début février, nous vivions tous dans un univers différent : celui des bureaux animés, des rues bondées, des activités sociales et des repas au restaurant.

Les articles de cette édition ont été rédigés sous un jour différent de celui qui s’impose à nous aujourd’hui. Les prochains numéros exploreront les exigences nouvelles et émergentes que la pandémie mondiale a laissées aux leaders d’affaires, aux gouvernements et aux organisations à but non lucratif.

Mais ce que nous savons déjà, c’est qu’il n’y a pas de solution miracle. Peu importe ce qu’affirme le plus optimiste des experts du marché boursier sur les prévisions trimestrielles et une reprise en V, les effets de la Covid-19 vont se prolonger longtemps et quand cette pandémie mondiale sera derrière nous, notre monde aura changé considérablement. Le Canada deviendra un pays plus indépendant, les lieux de travail seront plus numériques et notre système de soins de santé plus robuste. Il y aura aussi une montagne de dettes et peutêtre un changement des valeurs sociétales à l’égard de ce qui est véritablement important dans nos vies.

Pour l’instant, le meilleur conseil que nous puissions offrir est de prendre soin de vous, de vos familles et de vos communautés et de faire de votre mieux pour demeurer résilients face aux défis à venir. DJ

4 | DIRECTOR JOURNAL

Simon Avery Editor savery@icd.ca

CEO INSIGHTS

Compassionate leadership

ILLUSTRATIONS BY AARON MCCONOMY

In a time of crisis, many Canadian companies are doing the right thing

THE EFFECTS OF COVID-19 will be felt across LES EFFETS DE LA COVID-19 seront longthis country for a long time. But it is importtemps ressentis dans l’ensemble du pays. ant to know, as we weather this global panMais il est important de savoir, alors que demic, that Canada has many strengths from cette pandémie nous frappe, que le Canada which to draw – from effective government peut puiser dans une foule de ressources, and laws, to resilient people and businesses. dont l’efficacité de ses gouvernements et de More than ever, the strong leadership in ses mesures législatives et la résilience de our director community is a national asset ses citoyens et de ses entreprises. today. With public anxiety at an extreme Plus que jamais, le solide leadership de high, well-run boards can help to instill notre communauté d’administrateurs est broad confidence. I am confident that conaussi un actif national. Alors que l’anxiété du tingency planning, business continuity and public est à un sommet, des conseils d’adthe health, safety and trust of stakeholdministration bien dirigés ont une influence ers will rise to the top, and leadership and apaisante et sont des facteurs de confiance. compassion will be the order of the day.

Durant la période précédant l’apparition Rahul Bhardwaj In the runup to when the first cases of de la Covid-19, un changement culturel LL.B, ICD.D Covid-19 appeared in China, a cultural shift s’était déjà produit au Canada, alors que les President and CEO, was already underway here in Canada, with investisseurs et autres parties prenantes emThe Institute of Corporate Directors investors and other stakeholders increasbrassaient avec enthousiasme les principes ingly keen to embrace ESG (environmental, ESG (Environnement, Social, Gouvernance). social and governance) principles.

Une bonne partie de ce que nous avons Some of what we have been seeing in recent vu récemment se déployer au Canada est au weeks is at the very heart of this new thinking. For instance, some comcœur de ce nouveau mode de pensée. Certaines entreprises ont fait panies have moved quickly to do the right thing, putting community ce qu’il fallait en plaçant les besoins de la communauté au-dessus needs ahead of immediate profitability. These decisions come out of a de la rentabilité immédiate. healthy corporate culture, and they make Peter Drucker’s famous obLes leaders gouvernementaux ont aussi pris le relais en plaçant servation that “culture eats strategy for breakfast” ring clearer than ever. les besoins immédiats des Canadiens au-dessus des idéologies poliGovernment leaders have also stepped up, putting the immediate tiques et des objectifs fiscaux à long terme et en adoptant rapideneeds of Canadians ahead of political ideologies and long-term fisment des mesures d’urgence. cal goals, and getting emergency measures in place rapidly. À l’Institut des administrateurs de sociétés, nous suivons la crise At the Institute of Corporate Directors, we are keeping a close eye de près et demeurons engagés à aider les conseils à livrer un solon the crisis and remain committed to helping board members deide leadership et des prises de décision efficaces. Les événements liver strong leadership and effective decision-making. exceptionnels des dernières semaines nous rappellent que nous The extraordinary events of recent weeks serve to remind us that ne savons pas vraiment de quoi nous sommes faits tant que nous we don’t know what we’re truly made of until we’re tested. In the n’avons pas été testés. Dans ce bouleversement que nous vivons, upheaval around us, we can rest assured that the level of leadership soyons assurés que le niveau de leadership démontré face à la crise, demonstrated in the face of this crisis, by both the political and coraussi bien par le monde politique que celui des entreprises, est de porate worlds, bodes well for the long term. bon augure à long terme.

It’s important to remind ourselves that there will be a tomorrow Nous vivons incontestablement une période difficile. Mais il y aura and when it comes we will be that much stronger thanks to the un lendemain. Lorsqu’il arrivera, nous serons beaucoup plus forts leadership that we are seeing today. DJ grâce au leadership dont nous sommes témoins aujourd’hui. DJ

ICD.CA | 5

COMPILED BY Prasanthi Vasanthakumar

Dispatches A digest for diligent directors

HOW CYBERCRIMINALS ARE GETTING SMARTER Contrary to what it sounds like, credential stuffing isn’t a matter of inflating one’s résumé.

It’s a far more insidious activity in which hackers get their hands on e-mail addresses, user names and passwords to crack into your virtual identity – potentially infiltrating everything from your Twitter profile to your bank account. And it’s on the rise because people reuse the same passwords, while more companies are having their data breached, according to CPA Canada.

Hackers have wised up since the old days of the “Nigerian prince” scam. They’re writing e-mails with proper spelling and catchy subject headings, and using sophisticated approaches such as artificial intelligence, to encourage you to click on infectious links.

People keep falling for these tricks because of human curiosity, greed, fear and embarrassment. According to cybersecurity experts interviewed by CPA Canada, some of the best ways to outsmart these fraudsters is to avoid using Google and Facebook credentials to log into other accounts, take advantage of two-factor authentication, and clear your inbox of old statements with personal information. An obvious but oft-ignored tip is to use complex and different passwords.

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THE FEBRUARY BLUES Mired in a post-holiday haze with long nights and costly bills, January often gets flak for being the most depressing month of the year. However, musical moods suggest otherwise. Using data from the music-streaming service Spotify, The Economist found that, globally, the top 200 songs are gloomiest in February.

Spotify rates the happiness of a song, its “valence,” from zero to 100, using an algorithm based on positivity ratings by music experts. For example, it gives Pharrell’s Happy a cheerful 96, while Adele’s Make You Feel My Love scores a heartbreaking nine.

According to The Economist’s calculations, the valence of the top 200 songs is 4 per cent lower in February than the annual average, while in July, it is 3 per cent higher.

Christmas enjoys the merriest spike of all.

Strangely, the February blues appear to hit countries with long, sunny days such as Singapore and Australia. Perhaps it all comes down to timing. For many, the high of the new year has worn off, leaving behind nothing but unattainable resolutions.

NEWS

PHOTOGRAPHY BY CLINT PATTERSON/UNSPLASH (TOP LEFT), MOHAMMAD METRI/UNSPLASH (BOTTOM LEFT), DANE MARK/ISTOCK (TOP RIGHT)

WHEN FREE SPEECH COMES AT A PRICE Late last year, the Toronto Public Library was criticized for hosting Meghan Murphy – who argues that transgender women endanger women’s rights – in the name of free speech. At the time, Edmonton Public Library (EPL) CEO Pilar Martinez tweeted her support of the Toronto library’s commitment to freedom of expression. Dozens slammed her stance, but she didn’t falter, stating, “I am not anti anyone. I am pro free-speech.” And professionally, she’s right – one of a library’s core responsibilities is to support intellectual freedom.

Months later, Jill Scheyk, an EPL trustee, told the Toronto Star that she was forced to resign after she spoke out against Martinez’s position. She also tweeted about the library’s upcoming public board meetings, inviting Edmontonians to speak up. However, she was later informed that her actions breached the trustee code of conduct.

Scheyk says she hopes her resignation will bring about change.

As a child, the library was her safe space, she told the Star. “I desperately want it to be that way for everyone.”

GLOBAL WARMING A HOT ISSUE IN 2020 Climate change dominated the World Economic Forum’s latest Global Risks Report – a first in its 15-year history. A decade ago, environmental issues weren’t even on the map, with risks such as asset price collapse and chronic disease taking the top spots.

But how times have changed. In the past year alone, floods and droughts devastated many parts of the world, Australia was on fire, 17-year-old climate activist Greta Thunberg was Time’s 2019 Person of the Year, and BlackRock’s Larry Fink identified lack of sustainability as an investment risk in his annual letter to CEOs. More recently, economists at JPMorgan penned a hard-hitting report on global warming, warning clients of “catastrophic outcomes where human life as we know it is threatened.” Closer to home, Teck Resources suddenly pulled the plug on its massive oilsands project in Alberta. As politicians squabbled over who was to blame, the company itself mentioned the word “climate” eight times in its official statement.

Top 10 Risks Over the Next 10 Years LONG-TERM RISK OUTLOOK: LIKELIHOOD

Extreme Weather Biodiversity loss Climate action failure Natural Disasters Human-made environmental disasters Water crises Data Fraud or theft Involuntary migration Social instability Cyber Attacks

Environmental

Societal

Technological

ICD.CA | 7

QUESTIONING CAPITALISM The 2020 Edelman Trust Barometer for Canada paints a bleak picture. Nearly three-quarters of Canadians feel a sense of injustice, while 69 per cent desire change. Trust has fallen across all sectors since last year, with technology, telecommunications and fashion taking the biggest hits. In this world of doubt, however, there is a role for business leaders. Most Canadians believe CEOs should initiate change instead of waiting for governments to step in. Edelman concludes that leadership should be redefined, and notes the battle for trust will rest on integrity, dependability and purpose.

47% Believe capitalism, as it exists today, does more harm than good in the world

91% Rank stakeholders, not shareholders, as most important to a company’s long-term success

74% Agree that a company can simultaneously increase profit and improve the communities in which it operates

89% Believe it is important that CEOs speak out on societal issues such as climate change, income inequality and training for jobs of the future.

Source: 2020 Edelman Trust Barometer

SPY GAMES AT CREDIT SUISSE This Swiss banking giant has had a tumultuous year. In February, Credit Suisse CEO Tidjane Thiam suddenly quit after being dogged for months by a spying scandal worthy of James Bond – complete with a cocktail party scuffle, a car chase and a dead private eye.

The story goes that two of Thiam’s senior executives were covertly tailed by private detectives – unbeknownst to him, or so he says.

Many suspected a cover-up, but others rushed to Thiam’s defence. One of the bank’s largest shareholders charged that the French-Ivorian CEO was the victim of a racism-fuelled campaign in the Swiss media. The board chair retorted that race had nothing to do with the directors’ decisions.

It must have been tough to let Thiam go. He was a star performer, seemingly fixing most of the bank’s problems in the past four years, reports Fortune magazine. At the same time, the never-ending drama was tarnishing the bank’s reputation. As with many tales of espionage, the truth remains frustratingly unclear.

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PHOTOGRAPHY BY DENIS LININE/ISTOCK (LEFT), BILL OXFORD (UNSPLASH)

NEWS

ARE FEMALE DIRECTORS BETTER FOR THE ENVIRONMENT? A study by researchers at the University of Calgary’s Haskayne School of Business indicates that boards with women boost a firm’s sustainability performance, especially in industries that leave a bigger environmental footprint, such as resource extraction and manufacturing. The reason? Women have more diverse experience when it comes to green matters. While some had worked for environmental organizations, many had complementary experience with government and public affairs – which proves valuable for navigating environmental regulations and stakeholder demands.

Other researchers have also found that women are more likely to frown upon unethical behaviour and risky business practices.

As a result, female executives tend to play it safe when it comes to climate change. “They would be quicker to say it is best to try to reduce our greenhouse gas emissions,” Irene Herremans, a professor of sustainable energy development and co-author of the study, told UCalgary News.

This is not to say that male executives are less skilled or environmentally responsible, she notes. What’s important is that women often bring different experiences to the table.

ICD.CA | 9

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ISSUES

BY Virginia Galt

Good corporate citizenship Ingenuity and compassionate leadership on display during Covid-19 crisis

AS BOARDS OF DIRECTORS WORK TIRELESSLY to guide their own organizations through the Covid-19 crisis, many are also playing a crucial leadership role in the broader national effort to contain the disease and set the stage for economic recovery.

Canadian distillers, for instance, are making hand sanitizer out of high-proof alcohol. Canada Goose Inc., famous for its designer parkas, is now producing and donating medical scrubs and patient gowns to hospitals.

“Across Canada, there are people risking their lives every day on the front lines of Covid-19 in health-care facilities, and they need help. Now is the time to put our manufacturing resources and capabilities to work for the greater good,” says Canada Goose CEO Dani Reiss. In addition, he said he will forgo his salary for at least three months, with the money going to support a fund for company employees affected by the closing of stores and manufacturing facilities.

Researchers at the Canadian Nuclear Laboratories in Chalk River, Ont., and the TRIUMF particle accelerator in Vancouver are collaborating on the development of an easy-to-manufacture ventilator to treat the most critically ill victims of the virus. Professors in the biology and chemistry departments at Ryerson University collected and donated 15,000 pairs of nitrile gloves to St. Michael’s Hospital and Women’s College Hospital in Toronto.

Other organizations are addressing customers’ financial distress caused by widespread layoffs and “state of emergency” orders that have prevented non-essential employees from going to work. Canada’s chartered banks are allowing hard-hit customers to defer their mortgage payments rather than default. Ottawa-based e-commerce multinational Shopify Inc. has added $200-million to the Shopify Capital fund, which provides small loans to help struggling merchants. The relief is currently available to Shopify customers in the United States and Britain. The company is working with regulators in Canada and other countries to expand the coverage. “Together we’ll make it through,” Shopify says.

There is little or no economic gain for the organizations involved in these initiatives, but their acts are inspiring and impactful.

The last word goes to Mitch Frazer, a partner and chair of the pensions and employment practice in the Toronto law office of Torys LLP. He also serves as chair of the North York General Hospital Foundation board, Ryerson University and the Toronto French School Foundation.

An emergency campaign to support North York General Hospital – co-ordinated by phone and video conferencing because Frazer was in self-isolation after a vacation – raised $1-million in its first week.

“Everyone wants to help. It blew me away,” he said in a recent interview.

Frazer says he was inspired by the Ryerson science professors who donated their gloves, and moved by the generosity of Toronto French School supporters who established a bursary fund for families that might need tuition help next year.

If there is a silver lining to the Covid tragedy, this is it, he said. “It’s pretty amazing to see all the good that’s being done.” DJ

Labatt Brewing’s Mill Street hand sanitizer is just one example of companies using their manufacturing facilities to make emergency supplies to donate in the fight against Covid-19.

VIRGINIA GALT, a former business and education reporter for The Globe and Mail, covers legal, education and management issues for a number of publications.

ICD.CA | 11

The dilemma Should we expand our board assessment process to include feedback from our senior management team?

Heather Wilson ICD’s director of research services

SOME DIRECTORS MAY have reservations about being assessed by their senior management team, but individuals who regularly report to the board are likely to have insights that would be beneficial. An openness to feedback from executives also demonstrates the board’s commitment to continuous improvement.

“In my opinion, all boards should welcome management input,” says Wendy Evans, who serves on the boards of the Canadian Executive Service Organization (CESO), North West Co. and the Toronto and Region Conservation Foundation.

In particular, the CEO and her team may be able to identify key areas of expertise that the board should fill in order to provide more effective oversight. “The board is elected to oversee the business and affairs of the company, and the CEO and other members of the executive team have a unique line of sight into how effectively the board is discharging that responsibili-

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ty,” says Adrienne DiPaolo, a partner at the Toronto office of the law firm Torys LLP. By helping the board understand what expertise it may be missing, the feedback allows it to recruit new directors or find other ways to fill any knowledge gaps.

If the board decides that senior management feedback would be worthwhile, the process should be carefully managed so that it produces constructive criticism of the board’s performance and helps to identify areas for improvement. According to Evans, these areas may include planning effectiveness, risk management, and long-term strategy and business development. Executive team suggestions can help the board assess where members are providing the most value and where more could be provided.

Organizations may be tempted to use the same questions for both directors and senior management, but they should be reviewed to make sure they are appropri-

ate. Additional questions should be developed specifically for the senior management team. “For example, a key role of the board is to help the executive team frame issues and develop strategies,” DiPaolo says, “so one way of gauging the value of the board’s effectiveness would be to ask executives if they regularly leave board meetings with different ideas or directions based on the questions and insights provided by the directors.”

Evans also recommends that senior executives be asked about ways to improve the relationship between the board and the management team, as well as about steps to take to help the board better understand the key drivers of the business. On her board, executives expressed a desire to have more opportunities to interact with directors. In response, board members now accompany senior management on site tours, which has enabled more communication outside of regularly scheduled board meetings, she says.

Typically, only those senior executives who work closely with the board should be invited to participate. Senior team members who regularly interact with specific committees could also provide feedback on committee performance and leadership.

Boards will also need to decide what portion, if any, of the feedback will be shared with senior executives. However, Evans notes, “the key in seeing management input is to act on the responses. Unless companies are prepared to do that, there is no point in having the input.” DJ

ILLUSTRATION BY AARON MCCONOMY

Q.

DIRECTORS’ DILEMMA

DIRECTOR LENS • Senior management feedback can shed light on a board’s performance, helping directors understand where they are adding the most value as well as possible areas of improvement.

• Topics for discussion may include longterm strategy and business development, risk management, and the overall value the board brings to the organization.

• Boards should develop questions specifically for the senior management team to elicit their unique insights.

CERTAINS ADMINISTRATEURS pourraient avoir des réserves quant au fait d’être évalués par leur équipe de haute direction, mais celle-ci est susceptible d’offrir des points de vue dont l’organisation pourrait profiter.

Une ouverture à la rétroaction de la part des cadres témoigne aussi de l’engagement du conseil envers l’amélioration continue. « À mon avis, tous les conseils devraient accueillir l’apport de la direction », affirme Wendy Evans, qui siège notamment aux conseils du Service d’assistance canadienne aux organismes (SACO).

En particulier, le chef de la direction et son équipe pourraient être en mesure d’identifier des secteurs clés d’expertise sur lesquels le conseil devrait compter. « Le conseil est élu pour surveiller les activités de l’entreprise et le chef de la direction et les autres membres de son équipe ont une perspective unique sur le degré d’efficacité avec lequel le conseil s’acquitte de ces responsabilités », explique Adrienne DiPaolo, associée du bureau de Toronto du cabinet juridique Torys LLP. En aidant le conseil à comprendre le genre d’expertise dont il a besoin, la rétroaction lui permet de recruter de nouveaux administrateurs ou de trouver d’autres moyens de combler son manque de connaissances.

Si le conseil décide que la rétroaction de la haute direction en vaut la peine, le processus devrait être géré avec soin de manière à produire une critique constructive de la performance du conseil et l’aider à identifier des domaines d’amélioration. Selon Mme Evans, l’efficacité de la planification, la gestion du

risque ainsi que la stratégie à long terme et le développement des affaires peuvent faire partie de ces domaines.

Des organisations pourraient être tentées de poser les mêmes questions aux administrateurs et à la haute direction, mais elles devraient les examiner attentivement afin de s’assurer qu’elles sont appropriées. Des questions additionnelles devraient être conçues spécifiquement à l’intention de l’équipe de haute direction. « Par exemple, l’un des rôles clés du conseil consiste à aider l’équipe de direction à cerner les enjeux et à élaborer des stratégies, explique Mme DiPaolo. Donc, l’une des manières de mesurer la valeur de l’efficacité d’un conseil consisterait à demander aux cadres s’ils quittent régulièrement les réunions du conseil avec des idées ou des orientations différentes en s’inspirant des questions et des observations des administrateurs. » Mme Evans recommande également que les cadres supérieurs soient interrogés sur les moyens d’améliorer les rapports entre le conseil et l’équipe de direction ainsi que sur les étapes à franchir pour aider le conseil à mieux comprendre les moteurs essentiels de l’entreprise.

Les conseils doivent aussi décider quelle portion, le cas échéant, de la rétroaction sera partagée avec les cadres supérieurs.

Toutefois, souligne Mme Evans, « la clé, en prenant connaissance des commentaires de la direction, est d’agir selon les réponses. À moins que les entreprises soient disposées à agir en les tenant en compte, il ne sert à rien d’obtenir ces commentaires. » DJ

• Boards should commit to acting on the suggestions received from senior executives.

• La rétroaction de la haute direction peut faire la lumière sur la performance d’un conseil, en aidant les administrateurs à comprendre là où ils ajoutent le plus de valeur à l’organisation ainsi que les zones possibles d’amélioration.

• Les sujets de discussion peuvent englober la stratégie à long terme et le développement des affaires, la gestion du risque et la valeur globale que le conseil apporte à l’organisation.

• Les conseils devraient concevoir des questions spécifiquement à l’intention de l’équipe de haute direction afin d’obtenir ses perspectives uniques.

• Les conseils devraient s’engager à agir à l’égard des suggestions reçues des cadres supérieurs.

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Send your comments or ideas to: Heather Wilson Director of Research Services boardinfo@icd.ca Every issue, we will feature a question from readers or one from ICD’s complimentary research service, ICD BoardInfo icd.ca/boardinfo

ICD.CA | 13

For ICD Fellow David McAusland, an effective board looks at the big picture but can dive into the weeds when necessary.

BY Richard Blackwell

IN CONTROL

David McAusland chose to became a lawyer in the 1970s because at the time it looked like a straightforward career path. Today, as one of the Institute of Corporate Directors’ 2020 Fellows, he talks to business writer Richard Blackwell about a diverse professional journey that has been anything but predictable.

David McAusland a choisi de devenir avocat dans les années 1970 parce qu’à l’époque, cette profession laissait entrevoir un itinéraire professionnel assez simple.

Aujourd’hui, l’un des Fellows 2020 de l’Institut des administrateurs de sociétés s’entretient avec le chroniqueur économique Richard Blackwell d’un parcours de carrière qui a été tout sauf prévisible.

DAVID MCAUSLAND’S colourful characterization of an effective board makes it sound as if directors should be perched in a symbolic drone, a few dozen metres above the ground.

“Picture an old forest of trees and grass. A good board is hovering right at the tree tops. You’re understanding the forest, but you have an ability to say, ‘Okay, see that spot between those trees? I’m going down there. And you know what? I’m going down further, right into the grass. Because that’s where I’ve got to go to understand where this company is going and if what we’re doing really matters, relative to the big picture.”

Essentially, McAusland says, a board must always drive corporate strategy from a wide perspective, but be ready to dive, occasionally, into the weeds. However, “if you’re in the grass all the time, something’s really wrong,” he adds.

A linear time McAusland, who is being inducted as a 2020 Fellow of the Institute of Corporate Directors, has served on boards across a notably wide range of sectors over the past four decades. He has developed a reputation as a strategic thinker with a broad perspective on business, government and society.

LA DESCRIPTION COLORÉE que fait David McAusland d’un conseil d’administration efficace appelle l’image d’un administrateur qui serait perché sur un drone symbolique, à une douzaine de mètres au-dessus du sol. « Imaginez une forêt dense, peuplée d’arbres et de plantes diverses. Un bon conseil d’administration plane juste au-dessus de la cime des arbres. Vous comprenez la forêt, mais vous avez la capacité de dire : ‘OK. Tu vois cette touffe d’herbe entre les arbres? Descendons là.’ Et je creuse encore plus loin, directement dans la terre.

Parce que c’est là que je dois me rendre pour comprendre où cette entreprise s’en va et si ce que nous faisons a vraiment de l’importance par rapport à nos objectifs d’ensemble. » Essentiellement, explique M. McAusland, un conseil doit toujours déployer la stratégie d’entreprise à partir d’une large perspective, mais être prêt à l’occasion à plonger dans l’herbe. Toutefois, ajoute-t-il, « si vous êtes tout le temps dans l’herbe, il y a quelque chose qui ne va pas. »

Un temps linéaire M. McAusland, un Fellow 2020 de l’Institut des administrateurs de sociétés, a siégé à des conseils dans un très large éventail de secteurs au cours des quatre dernières décennies. À ce titre, il s’est acquis

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MCAUSLAND IS A STRONG BELIEVER THAT SUCCESSFUL CORPORATIONS MUST TAKE A GLOBAL PERSPECTIVE. DAVID MCAUSLAND CROIT FERMEMENT QUE POUR RÉUSSIR, LES SOCIÉTÉS DOIVENT ADOPTER UNE PERSPECTIVE MONDIALE. Currently he’s chairman of ATS Automation Tooling Systems Inc., packaging firm IPL Plastics Inc., money-manager Montrusco Bolton Investments Inc., and water purification firm Ovivo Inc. He’s also a director of cable company Cogeco Inc. and on the advisory boards of retailer Simons Inc. and private equity firm Hewitt Group. In the past, he’s sat on the boards of paper and printing companies, pharmaceutical firms, mining businesses, and non-profits ranging from the National Circus School Foundation to the Montreal General Hospital Foundation.

On this winding journey, he has tackled some seemingly intractable issues beyond standard boardroom fare. In 2008, McAusland was recruited to head a council set up to reform the operations of the RCMP – it recommended an independent board of management for the police force. In 2017, he was asked by the Quebec government to rebuild the board of the problem-plagued McGill University Health Centre, after all the independent directors resigned en masse.

McAusland was born and raised in the West Island region of Montreal, where he still lives. He attended John Abbott CEGEP/College and then McGill University’s law school. There weren’t any lawyers in his family, he says, but he just thought the law looked like a solid and straightforward career path. In the 1970s, “the world seemed a lot more linear,” he says, without today’s globalization and complex communications. “I probably said, ‘That’s an interesting thing to do. I’ll do that.’”

For more than 20 years, McAusland was a lawyer at the Montreal firm Byers Casgrain (now Dentons Fraser Milner Casgrain LLP), where he specialized in corporate mergers and acquisitions, particularly hostile takeover situations. Then in 1999, he decided to make a big career change by joining Alcan Inc. as executive vice-presi-

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une réputation de penseur stratégique doté d’une large perspective sur le monde de l’entreprise, les gouvernements et la société.

Présentement, il préside le conseil d’ATS Automation Tooling Systems Inc., de l’entreprise d’emballage IPL Plastics Inc., du gestionnaire de portefeuille Montrusco Bolton Investments Inc. et de l’entreprise de purification de l’eau Ovivo Inc. Il est aussi administrateur de Cogeco Inc., en plus de siéger au conseil consultatif du détaillant Simon Inc. et de la société financière privée Hewitt Group. Il a aussi siégé aux conseils d’entreprises de pâtes et papier, de sociétés pharmaceutiques, de sociétés minières et d’organismes à but non lucratif.

Pendant ce parcours sinueux, il a porté certains enjeux apparemment insolubles. En 2008, il a présidé un comité chargé de réformer le fonctionnement de la GRC, recommandant un comité de direction indépendant pour diriger le corps policier. En 2017, le gouvernement du Québec lui demandait de rebâtir le conseil d’administration du Centre de santé McGill miné par les problèmes, après que tous les administrateurs indépendants aient démissionné en bloc.

David McAusland est né dans l’Ouest-De-L’Île de Montréal. Il a fréquenté le Collège/Cégep John-Abbott et ensuite l’école de droit de l’Université McGill. Il n’y avait pas d’avocat dans la famille, explique-t-il, mais le droit lui apparaissait alors comme un cheminement de carrière solide et peu compliqué. Dans les années 1970, « le monde semblait beaucoup plus linéaire », dit-il, avant la mondialisation et la complexité des communications. « Je me suis probablement dit : ‘C’est une chose intéressante. C’est ce que je vais faire.’ » Pendant plus de 20 ans, M. McAusland a pratiqué le droit chez Byers Casgrain (aujourd’hui Dentons Fraser Milner Casgrain LLP), où il s’est spécialisé en fusions et acquisitions de sociétés, en partic-

dent and chief legal officer. He spent a decade with the company and helped stickhandle many deals, including Alcan’s 2003 hostile takeover of France-based Pechiney Group, and the 2007 arrangement where Britain’s Rio Tinto PLC bought Alcan itself. In the Rio Tinto deal, he drafted the unique “continuity agreement” that set out the social and economic benefits the acquisitor had to promise the Quebec government.

After his stint at Alcan, McAusland returned to a law practice, at McCarthy Tétreault, where he has been a partner since 2009.

Controlling process and value As a lawyer and director of many firms, McAusland has launched hostile acquisitions, defended hostile bids, acted for activist shareholders, and even sat on boards on behalf of activist shareholders.

This range of experience has given him a unique perspective on how boards should deal with takeovers.

When a company is approached with any kind of takeover offer — hostile or friendly — it is crucial for the board to maintain tight control of the process, he says. “If you lose that, or allow yourself to be in a position where control of the process can be taken away from you and put in the hands of a third party, then you lose control of value, [which] will end up God knows where.”

When the shoe is on the other foot and a board is launching a hostile takeover of another company, the approach is different. “If you can force things so that the [target company] comes to their senses and signs up for what you want them to sign up for immediately, quietly, that’s always good,” he says. “If not, sometimes it’s a question of a plan of attack to disrupt and cause them to lose control of their own situation, to demonstrate that they have very limited options other than what you want them to do.”

In either case, he says, boards have to be pragmatic and keep their options open. “If you have no options, then your value is diminished because you have no ability to make choices. If people know you have no ability to make choices, you are extremely vulnerable.”

To ensure that boards are decisive in these or other critical situations, there needs to be a clear consensus among directors, McAusland says. “My interpretation of strong consensus is that it is basically unanimity, but arrived at through discussion, and people compromising their positions a bit … a little give and take.” That doesn’t mean there is no room for dissent, he says, as long as it is presented in a constructive and articulate manner. “What is really important is for people to feel comfortable in speaking their minds, without the risk of other people taking it personally. That can be tricky to manage because some people are better at engaging in debate than others.”

Board chairs should always encourage “dumb” questions, McAusland says, because sometimes these are not as banal and obvious as they seem on first blush. Often, other directors around the table realize they too wanted to ask that question, but were afraid to appear unsophisticated. “Going back to basics in questioning is sometimes really fundamental.”

ulier dans des situations de prise de contrôle hostile. Puis en 1999, il a effectué un grand changement de carrière en se joignant à Alcan Inc. à titre de vice-président exécutif et chef des affaires juridiques.

Il a passé une décennie au sein de l’entreprise, contribuant à piloter plusieurs opérations, dont la prise de contrôle hostile d’Alcan sur le groupe français Péchiney et, en 2007, l’arrangement par lequel la britannique Rio Tinto PLC achetait à son tour Alcan.

Au terme de son séjour chez Alcan, Me McAusland est retourné à la pratique du droit chez McCarthy Tétreault, où il est associé depuis 2009.

Contrôler le processus et la valeur À titre d’avocat et administrateur de nombreuses entreprises, M. McAusland a lancé des acquisitions hostiles, défendu des offres hostiles, représenté des actionnaires activistes et même siégé à des conseils au nom d’actionnaires activistes. Cet éventail d’expériences lui a conféré une perspective unique sur la manière dont les conseils devraient se comporter face à des prises de contrôle.

Lorsqu’une entreprise est l’objet d’une offre d’achat – hostile ou amicale – il est essentiel que le conseil maintienne un contrôle serré du processus, dit-il. « Si vous perdez cela, ou si vous vous autorisez à être dans une position où le contrôle du processus peut vous être enlevé et placé entre les mains d’une tierce partie, alors vous perdez aussi le contrôle de la valeur, qui aboutira Dieu sait où. » Quand on inverse la situation et qu’un conseil lance lui-même une offre d’achat hostile contre une autre entreprise, l’approche est différente. « Si on peut forcer les choses de telle manière que [l’entreprise ciblée] entende raison et se plie immédiatement à votre demande, c’est toujours une bonne chose, dit-il. Sinon, il s’agit d’élaborer un plan d’attaque destiné à déranger l’autre partie, à la forcer à perdre le contrôle de sa propre situation, pour démontrer qu’elle n’a pas beaucoup d’autres choix que d’obéir à vos volontés. » Pour s’assurer que les conseils soient résolus dans l’une ou l’autre de ces situations critiques, il faut qu’il y ait un consensus clair parmi les administrateurs, affirme M. McAusland. « Mon interprétation d’un consensus fort est qu’on parle essentiellement d’unanimité, mais d’une unanimité atteinte au terme d’une bonne discussion, de compromis, de concessions réciproques. » Ce qui est vraiment important, poursuit-il, « c’est que les gens se sentent à l’aise de dire ce qu’ils pensent, sans risquer d’indisposer les autres. Ce sont des choses délicates à gérer, parce que certaines personnes sont plus habiles que d’autres à engager le débat. » Les présidents de conseil devraient toujours encourager les questions « idiotes », soutient Me McAusland, parce qu’il arrive qu’elles ne soient pas aussi banales et évidentes qu’elles le paraissent au premier abord. Souvent, d’autres administrateurs autour de la table réalisent qu’eux aussi voulaient poser la même question, mais craignaient d’avoir l’air simpliste. « Quand il s’agit de poser des questions, il est essentiel de revenir à la base. »

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DAVID MCAUSLAND

Partner at McCarthy Tétreault, Montreal Born in Montreal in 1954, McAusland earned a law degree from McGill University. He joined the law firm Byers Casgrain in 1978, working on finance and mergers and acquisitions for large companies. He became executive vice-president for corporate development and chief legal officer at Alcan Inc. in 1999. Since 2009, he has been a partner at McCarthy Tétreault.

His current directorships include: Cogeco Inc., ATS Automation Tooling Systems Inc., IPL Plastics Inc., Montrusco Bolton Investments Inc. and Ovivo Inc. Past directorships include: Cascades Inc., McInnes Cement Inc., Khan Resources Inc., Equinox Minerals Ltd., Repap Enterprises Inc., Aéroports de Montreal, Technilab Pharma Inc., World Color Press Inc. His non-profit directorships have included Montreal General Hospital Foundation, National Circus School Foundation, Centraide of Greater Montreal, Accounting Standards Oversight Council of Canada, Musée d’archéologie et d’histoire Pointe-à-Callière.

His awards include the 2002 Queen Elizabeth II Jubilee Medal for service to the community and public; and the Deal Making Award (2005) and Lifetime Achievement Award (2008) from the Canadian General Counsel Awards.

Né à Montréal en 1954, David McAusland a obtenu un diplôme en droit de l’Université McGill. Il s’est joint au cabinet juridique Byers Casgrain en 1978, concentrant sa pratique sur les fusions et acquisitions de grandes entreprises. En 1999, Il est devenu vice-président exécutif au développement de l’entreprise et chef des affaires juridiques chez Alcan. Depuis 2009, il est associé chez McCarthy Tétreault.

Il siège présentement aux conseils d’administration de Cogeco Inc., ATS Automation Tooling Systems Inc., IPL Plastics Inc., Montrusco Bolton Investments Inc. et Ovivo Inc. Auparavant, il a occupé des postes d’administrateur chez Cascades Inc., McInnes Cement Inc., Khan Resources Inc., Equinox Minerals Ltd., Repap Enterprises Inc., Aéroports de Montréal, Technilab Pharma Inc., World Color Press Inc. Il a également siégé au conseil de plusieurs organismes à but non lucratif, dont la Fondation de l’Hôpital général de Montréal, Centraide du Grand Montréal, le Conseil de surveillance de la normalisation comptable, le Musée d’archéologie et d’histoire de la Pointe-à-Callière.

En 2002, David McAusland a obtenu la Médaille du Jubilé de la Reine Élizabeth II en reconnaissance de ses services auprès de la communauté et du public. En 2005, il a reçu le Prix des conseillers juridiques du Canada dans la catégorie Transaction d’envergure et, en 2008, un prix d’excellence pour l’ensemble de sa carrière de la part du Canadian General Counsel Awards.

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A more complicated time While the international business world appears more complex and challenging than ever, with political, regulatory and cultural barriers growing, McAusland is a strong believer that successful corporations must take a global perspective. “The imperative of having an international view and exposure has never been greater. Broadening your horizons, and diversifying your risk and market exposure, and increasing your options is for the good.”

He notes that even Canada has issues that might scare away some international investors — heightened concerns over the future of energy development because of political pressures from First Nations and environmentalists, for example. “I don’t think anybody’s immune to this. It’s just the way the world is going.”

McAusland acknowledges that climate change, environmental issues, and social responsibility are now “front and centre” for just about every board of directors. Even companies seemingly removed from energy or climate concerns — such as software developers or tech companies — are going to have to track their carbon emissions and report on them.

For many boards, a strong focus on ESG (environmental, social and governance) matters is simply the proper way to do business, he says. But even directors who buy into the “denial world” now realize that many big-ticket investors care deeply about ESG and will no longer put money into companies that are not on side.

“Doing the right thing is important; I don’t want to downplay that,” he says. “But even if you don’t live in that world for some reason, it doesn’t matter. There are enough big investors out there, with enough of a head of steam, and with big capital pools, that do believe in this. If you are not careful and don’t handle this the right way and communicate it the right way, it’s going to affect your cost of capital. The cost of financing your growth will become more expensive.”

McAusland laments that in today’s world there are so many issues that boards must grapple with — from ESG to regulations to compliance to new governance requirements — that sometimes there is little time left for directors to focus on the fundamental strategy of a company’s business. While all those other concerns are important, he says, boards can’t forget traditional matters such as risk, profitability, and the allocation of human and financial capital.

“Creating the right balance is a challenge for all boards.”

There is one broad lesson McAusland has learned from his decades serving as a director on Canadian boards: There is no magic formula for doing the job well. “There is no textbook,” he says. “Anyone who thinks there is a textbook is out of their mind.” DJ RICHARD BLACKWELL is a former business reporter at the Financial Post and The Globe and Mail. Over three decades, he covered many sectors, including technology, financial services, media and energy.

CLIMATE CHANGE, ENVIRONMENTAL ISSUES, AND SOCIAL RESPONSIBILITY ARE NOW ‘FRONT AND CENTRE’ FOR JUST ABOUT EVERY BOARD OF DIRECTORS. LES CHANGEMENTS CLIMATIQUES, LES ENJEUX ENVIRONNEMENTAUX ET LA RESPONSABILITÉ SOCIALE SONT DÉSORMAIS DES SUJETS CHAUDS POUR CHAQUE CONSEIL. Une époque plus compliquée Alors que le monde des affaires à l’échelle internationale apparaît plus complexe et difficile que jamais avec la croissance des obstacles politiques, réglementaires et culturels, David McAusland croit fermement que pour réussir, les sociétés doivent adopter une perspective mondiale. « La nécessité d’avoir une vision et une visibilité internationales n’a jamais été aussi grande. L’élargissement de ses horizons, la diversification du risque et de la visibilité sur les marchés et l’accroissement des options sont pour le mieux. » Il fait remarquer que même le Canada éprouve des problèmes qui pourraient effrayer certains investisseurs internationaux – par exemple des préoccupations accrues quant à l’avenir du développement énergétique en raison des pressions politiques provenant des Premières Nations et des environnementalistes.

M. McAusland reconnaît que les changements climatiques, les enjeux environnementaux et la responsabilité sociale sont désormais des sujets chauds pour chaque conseil. Même des entreprises apparemment éloignées des préoccupations environnementales devront mesurer leurs émissions de carbone et les rapporter.

Pour beaucoup de conseils, une solide attention portée aux questions ESG (environnement, social et gouvernance) représente la manière appropriée de faire des affaires. Mais même les administrateurs qui penchent du côté du déni réalisent aujourd’hui que beaucoup d’investisseurs de premier plan accordent une im-

portance considérable aux ESG et ne placeront plus d’argent dans des entreprises qui ne le font pas. « Même si on ne vit pas dans ce monde-là, peu importe. Il y a suffisamment de gros investisseurs qui y croient. Si vous ne faites pas attention, si vous ne gérez pas les choses de la bonne façon, votre coût en capital en sera affecté. Le financement de votre croissance deviendra plus onéreux. » M. McAusland déplore le fait que dans le monde d’aujourd’hui il y ait tellement d’enjeux auxquels les conseils doivent faire face qu’il reste parfois peu de temps à consacrer à la stratégie fondamentale de l’entreprise. Les conseils ne peuvent oublier les questions traditionnelles, comme le risque, la rentabilité et l’allocation du capital humain et financier. « Le défi commun à tous les conseils, c’est celui de créer le bon équilibre », assure-t-il.

Mais il y a une grande leçon que David McAusland a apprise de ses décennies à la table de divers conseils au Canada : il n’y a pas de formule magique pour devenir un bon administrateur. « Il n’y a pas de mode d’emploi. Quiconque croit qu’il y a un mode d’emploi n’a pas toute sa tête. » DJ RICHARD BLACKWELL est un ancien chroniqueur économique au Financial Post et au Globe and Mail. Pendant trois décennies, il a couvert plusieurs secteurs, dont les technologies, les services financiers, les médias et l’énergie.

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BY Matthew Fortier

GOVERNING THE FUTURE OF WORK CONSIDER THIS SCENARIO: Your high-performing management team has proposed automating some functions of the business.

This will require short-term capital investment but also promises to significantly reduce longer-term labour and manufacturing costs and increase the firm’s productivity.

Because the company doesn’t have the expertise among its 1,200 employees, programming, operating and maintaining this new equipment will require the firm to acquire new skills. Also, capitalizing on advanced technology, management believes that design, marketing and communications functions can be outsourced to remote “gig” workers. This means the company could eventually move its headquarters to a smaller, less expensive site closer to its main manufacturing facility.

In the subsequent in-camera meeting, your chair asks how the board should evaluate this request. One director says that while the changes management is describing are pretty big, they’re also highly operational in nature and she’s not sure the board should stick its fingers in. Another director confesses that he was a little intimidated by the conversation with its focus on algorithms and leveraging the “gig” economy. Your fellow board members say that, while they are generally aware of contemporary trends shaping the future of work, this is the first time they’ve encountered them as directors, and they aren’t sure what role they should be playing.

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ENVISAGEZ CE SCÉNARIO : votre équipe de direction hautement performante a proposé d’automatiser certaines fonctions de l’entreprise. Cette initiative nécessitera des investissements à court terme, mais promet par ailleurs une réduction importante des coûts de main-d’œuvre et de fabrication et une augmentation de la productivité.

Parce que l’entreprise de 1 200 employés ne dispose pas de l’expertise nécessaire pour assurer le fonctionnement et l’entretien de ce nouvel équipement, elle devra acquérir de nouvelles compétences. Misant aussi sur les technologies de pointe, la direction croit que les fonctions reliées au design, à la mise en marché et aux communications pourraient être imparties à des travailleurs indépendants éloignés. L’entreprise pourrait éventuellement déplacer son siège social vers un site moins spacieux, moins coûteux et plus proche de ses installations de production.

Lors d’une réunion subséquente à huis clos, le président du conseil demande aux administrateurs d’évaluer cette demande. L’une d’entre eux affirme que bien que le changement proposé soit considérable, il est aussi de nature plutôt opérationnelle et elle n’est pas certaine que le conseil devrait s’en mêler. Un autre administrateur confesse qu’il a été quelque peu intimidé par une conversation qui portait principalement sur des algorithmes et l’exploitation de l’économie dite « des petits boulots ». Vos voisins à la table du conseil soutiennent

PHOTOGRAPH BY ANDREW NEEL/UNSPLASH

Insights from multinational boards and global experts Des perspectives de conseils multinationaux et d’experts mondiaux

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The trend toward automation and outsourcing is becoming more common throughout the economy. But for boards, integrating the future of work into oversight discussions remains a challenge and many haven’t yet started the process. Fewer than half of the respondents to the Institute of Corporate Directors’ Fall 2019 Director Lens survey indicated that they had discussed “future of work” issues, including the adoption of artificial technology (AI) and skills retraining, within the context of their strategic planning.

“The speed of change, staying attuned to leading-edge practices and technologies, can be a challenge for boards,” says Asuka Nakahara, a board director of Comcast Corp., the U.S. telecommunications giant.

But given that boards are ultimately responsible for the longterm success of their organizations and for making strategic and capital-spending decisions, Nakahara argues that it is vital that boards develop future-of-work competency.

“How talent can be strategically enhanced to create competitive advantage is critical,” he says. “Putting the company’s talent in positions to succeed is the job of both management and the board.”

Nakahara recently joined fellow board directors from globally significant companies at the Global Director Dialogue, a forum intended to help boards frame their thinking around the future of work and determine how to integrate future-of-work considerations into their strategic discussions.

The event included directors from Chevron Corp., Eni SpA, Michelin, Ubisoft Entertainment SA, Legal & General Group PLC, Shopify Inc., Bank of Nova Scotia, the Canada Pension Plan Investment Board and others. Thought leaders from the Massachusetts Institute of Technology and the European Union joined the session, which was convened by the ICD, in partnership with the Government of Canada, the UN Global Compact, Deloitte, Baker McKenzie, Odgers Berndtson and Longview Communications & Public Affairs Inc. One of the first challenges for boards is understanding the impact of technology adoption on jobs and society. Scenarios depicting mass unemployment caused by artificial intelligence or other automating technologies seep into the imagination and risk influencing business decisions.

Michel Servoz, senior adviser on AI, robotics and the future of labour to European Commission President Jean-Claude Juncker, believes that directors and other business leaders need to understand that such fears are largely unfounded.

“History shows that every technological shock produces economic growth and new jobs, each time with an improvement in job quality,” he says.

Instead, the challenge – for organizations and for societies – will be centred on training today’s workers for tomorrow’s jobs, Servoz adds. “It is about the capacity of our societies to manage massive transitions, helping people to be retrained for jobs that are more complex because they focus on the tasks that cannot be automated.”

Boards can help their organizations – and societies – map out the strategies that will ease these transitions and determine

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Scenarios depicting mass unemployment caused by artificial intelligence or other automating technologies seep into the imagination and risk influencing business decisions.

L’un des premiers défis qui se posent aux conseils consiste à comprendre l’impact de l’adoption des technologies sur les emplois et l’ensemble de la société. que même s’ils sont généralement au fait des tendances contemporaines qui façonnent l’avenir du travail, c’est la première fois qu’ils en prennent connaissance à titre d’administrateurs et ils ne sont pas certains du rôle qu’ils devraient jouer à cet égard.

FAÇONNER UNE TRANSITION MASSIVE DU MONDE DU TRAVAIL La tendance vers l’automatisation et l’impartition devient plus courante dans tous les secteurs de l’économie. Mais pour les conseils, l’intégration de l’avenir du monde du travail dans des discussions portant sur la surveillance demeure un défi et beaucoup d’administrateurs n’ont pas entrepris le processus. Moins de la moitié des répondants au sondage Sous la lentille de l’administrateur, mené par l’Institut des administrateurs de sociétés à l’automne 2019, ont indiqué qu’ils avaient discuté d’enjeux liés à « l’avenir du travail », y compris l’adoption de l’intelligence artificielle (IA) et l’acquisition de nouvelles compétences, dans le contexte de leur planification stratégique. « La rapidité du changement, la nécessité de demeurer en phase avec les pratiques et technologies de pointe peuvent être un défi pour les conseils », affirme Asuka Nakahara, membre du conseil de Comcast Corp., le géant américain des télécommunications.

Mais comme les conseils sont ultimement responsables du succès à long terme de leur organisation, des décisions stratégiques et des dépenses en immobilisations, M. Nakahara soutient qu’il est vital que les conseils développent des compétences sur l’avenir du monde du travail. « Il est essentiel de savoir comment améliorer nos talents de façon stratégique afin de créer un avantage concurrentiel, dit-il. Il revient à la direction et au conseil de placer les talents de l’entreprise en position de connaître du succès. »

PHOTOGRAPH BY FRANCK/UNSPLASH

SHAPING A MASSIVE LABOUR TRANSITION

what the future of work will look like. The senior board directors and thought leaders at the Global Director Dialogue identified five key areas of focus.

ALTERNATIVE WORK FORCE As we have seen during the Covid-19 pandemic, more flexible rather than fixed work arrangements present both challenges and opportunities, and require the board to develop new models of overseeing workers.

As boards become increasingly aware of their responsibilities to provide effective oversight of corporate culture, it is important that they understand the implications of their firm’s alternative work force talent model. Directors should have a clear understanding of how many alternative workers, including gig workers, part-time workers and contractors, are employed by their organization and the mechanisms in place to effectively manage those workers.

The board or human resources committee may need a deeper awareness of talent planning below the senior management level in order to meet the organization’s future work force needs. Building a work force that includes alternative workers requires a sophisticated assessment of what jobs are required and who should fill them.

Important transmitters of corporate culture, such as work force

M. Nakahara s’est récemment joint à d’autres collègues administrateurs provenant d’entreprises d’envergure mondiale dans le cadre du Dialogue mondial des administrateurs (Global Director Dialogue), un forum conçu pour aider les conseils à élaborer des pistes de réflexion autour de l’avenir du monde du travail et à déterminer comment intégrer ces considérations dans leurs discussions stratégiques.

L’événement a réuni des administrateurs issus d’entreprises comme Chevron Corp., Eni SpA, Michelin, Ubisoft Entertainment SA, Legal & General Group PLC, Shopify Inc., la Banque de Nouvelle-Écosse, l’Office d’investissement du Régime de pensions du Canada et bien d’autres encore. Des leaders éclairés du Massachusetts Institute of Technology et de l’Union européenne ont également participé à cette séance organisée par l’IAS en partenariat avec le Gouvernement du Canada, le Pacte mondial de l’ONU, Deloitte, Baker McKenzie, Odgers Berndtson et Longview Communications & Public Affairs.Inc. L’un des premiers défis qui se posent aux conseils consiste à comprendre l’impact de l’adoption des technologies sur les emplois et l’ensemble de la société. Des scénarios décrivant les vagues massives de chômage causées par l’intelligence artificielle ou d’autres technologies d’automatisation s’insinuent dans les imaginations et risquent d’influencer les décisions d’affaires. Michel Servoz, conseiller prin-

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Many of the most important features of future work lie in the structural team and work-flow systems that enable productivity, effectiveness and innovation.

Plusieurs des caractéristiques les plus importantes du monde du travail de demain résident dans des systèmes structurés d’équipe et de flux de travail qui permettent la productivité, l’efficacité et l’innovation. training, employee orientation and leadership development, may need new delivery models as more and more alternative workers are added. The risks of turnover and the loss of institutional knowledge are real and may become ingrained, so boards should ask what tools can be used to help employees feel connected to the organization.

PHOTOGRAPH BY ANNIE SPRATT/UNSPLASH

RESKILLING AND RETRAINING Delegates to the Global Director Dialogue urged boards to ask, “What skills does the company need to win in the future?” – including hard skills such as coding and softer skills such as collaboration – and require management to incorporate staffing risk assessments into strategic planning proposals. Such assessments would outline the skills and capabilities that currently exist in the firm and map these against the skills needed to accomplish the strategic objectives that management deems necessary to pursue.

An analysis will help the board work with management to build a plan to close gaps through retraining the existing employee base or, if necessary, through supplemental acquisition of new skills.

Boards should also ask what responsibility they have in ensuring social and economic policies that support retraining. As leaders in their organizations and in society, directors have the ability to encourage collaboration within and between industrial sectors, and with governments and educational institutions, to ensure that people are retrained for new types of work.

ORGANIZATIONAL REDESIGN Many of the most important features of future work lie in the structural team and work-flow systems that enable productivity, effectiveness and innovation. Because of their long-term implications, delegates identified two areas of oversight focus for

cipal en IA, robotique et sur l’avenir du monde du travail auprès du président de la Commission européenne Jean-Claude Juncker, croit que les administrateurs et autres leaders d’affaires doivent comprendre que de telles craintes sont largement infondées. « L’Histoire démontre que chaque choc technologique produit de la croissance économique et de nouveaux emplois, toujours accompagnés d’une amélioration de la qualité de l’emploi », explique-t-il.

Le défi sera axé sur la formation des travailleurs d’aujourd’hui pour les emplois de demain, ajoute M. Servoz. « Il s’agit de la capacité de nos sociétés de gérer des transitions massives, d’aider les gens à être formés à nouveau pour des emplois plus complexes parce qu’orientés vers des tâches qui ne peuvent pas être automatisées. » Les conseils peuvent aider leurs organisations à élaborer des stratégies qui faciliteront ces transitions et détermineront à quoi ressemblera le monde du travail à l’avenir. À cet égard, les participants au Dialogue mondial des administrateurs ont identifié cinq grands secteurs prioritaires.

UNE MAIN-D’ŒUVRE DIFFÉRENTE Comme nous l’avons vu durant la pandémie de la Covid-19, des modalités de travail plus souples exigent du conseil qu’il élabore de nouveaux modèles de gestion de la main-d’œuvre.

Il est important pour les conseils de comprendre les implications d’un modèle de talent pour la main-d’œuvre de leur organisation.

Les administrateurs devraient avoir une compréhension claire du nombre de travailleurs diversifiés – y compris les travailleurs indépendants, à temps partiel et contractuels – employés par leur organisation et des mécanismes en place pour gérer efficacement ces travailleurs.

Pour bâtir une main-d’œuvre comprenant de tels travailleurs, il faudra un système d’évaluation perfectionné des emplois requis et du type de travailleur en mesure de les occuper.

Alors que de plus en plus de travailleurs diversifiés s’ajoutent à la main-d’œuvre, des transmetteurs importants de la culture d’entreprise – formation de la main-d’œuvre, orientation des employés et développement du leadership – auront sans doute besoin de nouveaux modèles de livraison.

À LA RECHERCHE DE NOUVELLES COMPÉTENCES Les délégués au Dialogue mondial des administrateurs ont exhorté les conseils à se demander de quelles compétences leur entreprise allait avoir besoin pour réussir à l’avenir et demandé aux gens de la haute direction d’intégrer des évaluations du risque de dotation en personnel dans leurs propositions de planification stratégique. De telles évaluations décriraient les compétences dont l’entreprise est présentement dotée et les mesureraient à celles dont elle a besoin pour atteindre les objectifs stratégiques que la direction juge nécessaire de poursuivre. Une analyse aidera le conseil à travailler avec la direction pour établir un plan destiné à combler l’écart par une nouvelle formation aux employés existants ou, le cas échéant, par une acquisition supplémentaire de nouveaux talents.

Les conseils devraient aussi évaluer leurs responsabilités de s’as-

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company directors: human resource strategy and physical workspace design, including where employees work and how they function together.

As businesses restructure and reorganize to take advantage of the opportunities technology present, it will become even more critical that they commit to long-term employee development. Boards can play an important role here by offering incentives for training and development, and requiring that management build talent development into their business strategy. This will not only increase talent and loyalty but also build institutional knowledge and the internal agility to adapt to and absorb change.

Because there are clear capital considerations related to the design or redesign of the organization, particularly through the organization’s real estate strategy, directors also need to consider the future physical footprint of their workspace.

Importantly, boards need to understand how the company’s physical space affects workers and their performance. Directors at the Global Director Dialogue acknowledged that technology can help build relationships, but they expressed concern that remote work may inhibit engagement and hurt creativity.

Ultimately, boards should consider capital spending requests regarding the physical design of their organizations through the lens of corporate culture and ask whether this will enhance human performance.

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surer que les politiques sociales et économiques de leurs organisations soutiennent la reconversion professionnelle. Comme leaders de leurs organisations, les administrateurs ont la capacité de favoriser la collaboration au sein des secteurs industriels et entre ceux-ci ainsi qu’avec les gouvernements et les établissements de formation, pour faire en sorte que les gens puissent suivre de nouvelles formations pour de nouveaux types d’emploi.

RESTRUCTURATION ORGANISATIONNELLE Plusieurs des caractéristiques les plus importantes du monde du travail de demain résident dans des systèmes structurés d’équipe et de flux de travail qui permettent la productivité, l’efficacité et l’innovation. Les délégués ont identifié deux domaines particuliers à surveiller par les administrateur, soit la stratégie en ressources humaines et le design physique de l’espace de travail.

Au moment où les entreprises se restructurent et se réorganisent pour tirer parti des occasions qu’offre la technologie, il deviendra de plus en plus impératif qu’elles s’engagent dans le développement à long terme de leur main-d’œuvre. Les conseils peuvent jouer un rôle important en ce sens en proposant des incitations à la formation et au développement et en demandant à leurs directions d’intégrer le développement des talents dans leur stratégie d’affaires. Cela ne permettra pas seulement d’augmenter les compétences et la loyauté, mais aussi de bâtir un savoir institutionnel

THE HUMAN DIMENSION OF WORK Delegates at the Global Director Dialogue agreed that employees and communities provide a company social licence to operate and that, in the context of the future of work, boards have an obligation to oversee the transition strategies of their work forces. Specifically, boards should integrate human work force planning and technology planning into all aspects of oversight, including strategy and enterprise risk.

To that end, boards should require their organizations’ human resources and information technology departments to determine the likely impact of technology plans on the company’s work force, including a projection of the internal skills needed to successfully execute and integrate these plans in the company’s business.

It may also be necessary for many boards to review their own composition and structure. Delegates underscored that there is generally insufficient focus on the future at most board meetings, which are still often dominated by short-term compliance matters. In response, delegates encouraged boards to welcome younger and more technology-fluent directors, who could immediately bring more knowledge of IT options into governance-level conversations. Delegates also suggested that empowering a permanent committee of the board to oversee the human dimension of work would bring greater regularity and urgency to these discussions at the governance level.

PHOTOGRAPH BY FRANKI CHAMAKI/UNSPLASH

GOVERNING FOR PURPOSE

et une agilité interne pour s’adapter et absorber le changement.

Finalement, les conseils devraient envisager les demandes de dépenses en immobilisations concernant le design physique de leur organisation à travers la lentille de la culture d’entreprise et se demander si de telles dépenses seraient de nature à améliorer le rendement humain.

LA DIMENSION HUMAINE DU TRAVAIL Les délégués au Dialogue mondial des administrateurs ont convenu que les employés et les communautés fournissent à une entreprise une licence sociale pour mener ses activités et que, dans le contexte de l’avenir du monde du travail, les conseils ont une obligation de surveiller les stratégies de transition de leur main-d’œuvre.

Il pourrait aussi s’avérer nécessaire pour plusieurs conseils d’analyser la composition et la structure de leurs propres organisations. Les délégués ont souligné qu’en général, l’accent n’est pas suffisamment mis sur l’avenir lors de la plupart des réunions du conseil, lesquels sont souvent dominés par des questions de conformité à court terme. Les délégués ont encouragé les conseils à accueillir des administrateurs plus jeunes et plus versés en technologies qui pourraient immédiatement apporter une meilleure connaissance des options en matière de TI lors des conversations au niveau de la gouvernance.

Delegates at the Global Director Dialogue discussed the importance of purpose as a driver of human capital success, noting that if an organization hasn’t articulated a compelling purpose, it may not be able to hire the right talent, presenting a significant risk to the firm’s sustainability. The failure to attract and retain the appropriate people puts any firm’s growth and success in jeopardy.

A compelling purpose should reflect the desired outcomes of the organization’s strategy, including value creation, predictability, sustainability and the experiences of employees and other stakeholders. The board should request that clear benchmarks be developed (for instance, employee engagement scores, retention rates, net promoter scores, customer satisfaction levels and exit interview results) with explicit timelines, and that those measurements be regularly reported to the board and other stakeholders.

In addition, the board has an important role in clearly communicating and embodying the corporate purpose to help attract and retain the talent it needs to be successful.

The five areas of focus for governing the future of work, as identified by the delegates at the Global Director Dialogue, outline a number of practical steps that boards can take to ensure management is aligning strategic planning with work force planning. In affirming that directors can, for example, immerse themselves more deeply in talent planning, or spur collaboration to help shape public policy that supports retraining programs, boards can enable a future where work enhances organizational value and shapes meaning for companies and for workers. DJ

GOUVERNER POUR L’OBJECTIF

MATTHEW FORTIER is the ICD’s vice-president of policy.

MATTHEW FORTIER est vice-président, Politiques, de l’IAS.

Les participants au Dialogue ont discuté de l’importance de l’objectif en tant que moteur du succès du capital humain, soulignant que si une organisation n’a pas articulé un objectif convaincant, elle pourrait ne pas être en mesure d’embaucher les talents nécessaires, ce qui représenterait un risque important pour sa pérennité.

Un objectif convaincant devrait refléter les résultats souhaités de la stratégie de l’organisation, dont la création de valeur, la prévisibilité, la pérennité et les expériences des employés et d’autres parties prenantes. Le conseil devrait réclamer que des points de comparaison clairs soient élaborés (par exemple, les cotes de mobilisation des employés, les taux de rétention, les taux nets de recommandation, les niveaux de satisfaction de la clientèle et les résultats des entretiens de départ), avec des échéances explicites, et que ces mesures soient régulièrement rapportées au conseil et aux autres parties prenantes.

De plus, le conseil a un important rôle à jouer en communiquant clairement et en incarnant l’objectif d’entreprise pour attirer et retenir les talents dont l’organisation a besoin pour connaître du succès.

En affirmant que les administrateurs peuvent, par exemple, s’immerger plus profondément dans la planification du talent ou encourager la collaboration pour contribuer à façonner des politiques publiques qui soutiennent les programmes de reconversion professionnelle, les conseils peuvent favoriser un avenir où le travail rehausse la valeur organisationnelle et est porteur de sens pour les entreprises et les travailleurs. DJ

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A ‘ZEITGEIST’ LAW Amendments to CBCA push boards to consider all stakeholders, become more diverse and listen to shareholder concerns about pay

BY Jeff Buckstein

BEGINNING THIS YEAR, board members will feel the ripple effects of recent amendments to the Canada Business Corporations Act (CBCA) that broaden consideration to include all stakeholders, not just shareholders, and enhance disclosure of board and executive diversity, majority voting and say on pay.

ILLUSTRATION BY ISTOCK

Not just shareholders The landmark Supreme Court of Canada decision in BCE Inc. v. 1976 Debentureholders ( 2008 ) was a significant force behind the CBCA changes. That decision enhanced the notion that, in order to act in the best interests of their company, boards need to consider the interests of all their constituent stakeholders, not just the short-term interests of shareholders.

The 2019 CBCA amendments “reaffirm that boards have the authority, discretion and responsibility to consider the broad range of stakeholder interests that are affected when a significant corporate decision is being made,” says Poonam Puri, a professor of law at York University’s Osgoode Hall Law School in Toronto, and a director of Canadian Apartment Properties Real Estate Investment Trust and Canada Infrastructure Bank.

A new section of the CBCA that covers the duty of care of directors and officers states that when acting with a view to the best interests of the corporation, its directors and officers may consider – but are not limited to taking into account – the interests of shareholders, employees, retirees and pensioners, creditors, consumers and governments. They must also assess the impact of their actions on the environment and the long-term interests of the corporation.

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“I think it’s the first step. It’s probably going to become more involved, and take a deeper dive in years to come as relations with Indigenous people progress with Corporate Canada and all levels of government.”

- Darrell Brown

“The legislation encourages directors to consider these broader stakeholder interests but does not require it or insist upon a particular process or result. Given the range of public companies in the Canadian market, a one-size-fits-all mandatory rule would not have been appropriate,” Puri says.

For some boards, this won’t change their good practices. They are already actively considering stakeholder interests in key decisions, not because the law requires it, but because it is good business. For others, it may encourage them to think more carefully and deliberately when making difficult decisions that affect many stakeholders, she says.

“I think that a lot of companies had already taken the wisdom from the BCE case and were, in fact, casting their eye to other stakeholders,” says Rahul Bhardwaj, president and CEO of the Institute of Corporate Directors in Toronto.

For example, the board of a large, publicly listed mining company couldn’t continue its business without a community relations plan in place to work with Indigenous groups, he notes.

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Before and after the changes to the act, however, the underlying principles on the duty of care and fiduciary duty remain the same. Directors have to make informed, prudent decisions and they have a duty to act in the best interests of the company.

“We got some nuance from the BCE decision and we are getting even more detail from the codification about how to interpret these legal duties. This codification reminds boards that in making significant business decisions, whether about allocating financial capital, deploying human resources, entering into new product lines or geographic regions – that they consider all the stakeholders who might be affected,” Puri says.

Equally so, she adds, the revised act makes it clear that maximizing shareholder value need not be paramount when making decisions, and that directors will have legal cover if they reasonably take a long view.

Directors need to make sure they are engaging in a good decision-making process, even if a stakeholder group is ultimately unhappy with the decision reached. The key consideration for the board, however, is to ensure that its decision-making process allows for a robust and fair consideration of all the stakeholder interests, Puri says.

The recent CBCA amendments leave plenty of room for director discretion in decision-making, which is a good thing, she says, because directors are selected to serve on boards for their expertise, experience, ethics and good business judgment.

‘Elevated expectations’ on diversity disclosure Another amendment to the CBCA now requires that directors “place before the shareholders, at every annual meeting, the prescribed information respecting diversity among the directors and among the members of senior management [italics included] as defined by regulation.”

This change took effect on Jan. 1 and stipulates that corporate diversity disclosure requirements for directors and executives refer specifically to women, Aboriginal people, members of visible minorities and persons with disabilities.

“It’s a very expansive view on diversity — one that’s going to challenge some companies on actually achieving it,” the ICD’s Bhardwaj says.

The presence of a diversified board and executive is, however, particularly important in a corporate setting. “It mitigates group think. It’s a wall against unconscious bias. It creates more diversity of thought, which de-risks decision making,” he says.

“We’re now elevating the expectation that we’ve got to do more.”

- Shannin Metatawabin

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Darrell Brown, chair of the board of Manitoba’s Aboriginal Chamber of Commerce in Winnipeg, and the president of two small businesses, Kisik Inc., operating as Kisik Commercial Furniture Inc., and Kisik Clean Energy, was pleased to see the changes with respect to diversity disclosure.

“I think it’s the first step. It’s probably going to become more involved, and take a deeper dive in years to come as relations with Indigenous people progress with Corporate Canada and all levels of government,” he says.

“I think this is a very positive move to amend these changes for Corporate Canada,” adds Shannin Metatawabin, CEO of the National Aboriginal Capital Corporations Association in Ottawa.

“The steps taken previously to include female representatives on boards were good, and you’ve seen the results from the number of boards that have implemented policy related to ensuring that there is gender equity,” he says, adding that implementing the new CBCA changes reinforces the need to further diversify corporate boards.

There are currently many Indigenous board candidates who are qualified and certified by the ICD, but there is no active process for

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“There’s no question in my mind that this improves corporate governance,” says Senator Howard Wetston, who sponsored the legislation behind the CBCA amendments.

corporations to go out and find them, and no mechanism for forcing the board to do so, Metatawabin says.

With these CBCA changes, however, “we’re now elevating the expectation that we’ve got to do more,” he says.

The amendments put “a light on whether they’re implementing and moving towards reflecting the diversity of society. I think the investment community, in particular, wants to see diversity on boards happen,” Metatawabin says.

Citing the cumulative wealth that will ultimately be transferred to millennials from their baby boomer parents, he notes that the younger generation wants to make a social impact with their investments.

As with the hiring of any director, a company’s search for an Indigenous candidate

“As a result of the CBCA amendments related to majority voting and say-on-pay, shareholders have been provided a greater role in their ownership of the corporation, enhancing their shareholder democracy rights.”

- Senator Howard Wetston will have to be carefully done to ensure the best fit, Brown says.

For example, he notes, “I’m a private-business person. You can’t throw me on a board to discuss, say, employment equity, because that’s not what I do. My strength would be in advising a board on Indigenous relations and to provide some historical context.”

Moreover, he warns, “you can’t expect an Indigenous person to know everything there is about Indigenous relations. The recent dispute between the hereditary chiefs and the Indian Act chiefs in Wet’suwet’en territory is very indicative of how diverse we are within our own communities.”

PHOTOGRAPH BY ANDREW FRANCIS WALLACE/TORONTO STAR VIA GETTY IMAGES

Majority voting and say-on-pay Other key CBCA amendments focus on majority voting and shareholder input into director and management compensation — the so-called “say-on-pay” provisions.

With respect to majority voting, the act now states: “each candidate is elected only if the number of votes cast in their favour represents a majority of the votes cast for and against them by the shareholders who are present in person or represented by proxy, unless the articles require a greater number of votes.”

Additional changes made to the CBCA state that shareholders are entitled to an annual non-binding vote on the pay of directors and senior management.

Neither of these provisions is yet in force as of March, 2020.

Howard Wetston, senator and former chair of the Ontario Securities Commission from 2010-15, sponsored the legislation behind the CBCA amendments. He says he does not believe the CBCA required the say-on-pay vote to be binding because it was already beginning to be recognized as a best practice after the financial crisis in 2008, and many companies have since adopted it.

“Even before the CBCA amendments, there was considerable discussion about say-on-pay. There was a sense that momentum was building in this area. The U.S. required a say-on-pay vote, as well as the U.K. Majority voting and say-on-pay were part of a very important initiative to ensure that shareholders had a better understanding of the performance of their companies as it relates to the specific performance of directors and senior or executive management,” he says.

Underlying the need for such amendments were questionable pay practices in employment contracts, such as excessive severance payments, Wetston says.

The ICD’s Bhardwaj notes that there has been a long history of shareholders telling boards that they need to see a correlation between compensation and shareholder value.

“And I think it’s fair to say there’s been a disconnect or a certain opacity to that,” he says.

“Majority voting and say-on-pay are both very important for shareholders. Transparency is critical to evaluate performance and highlight accountability,” says Wetston, who also believes these changes will be positive for boards.

“There’s no question in my mind that this improves corporate governance,” he says, pointing out that although most directors are still re-elected, majority voting encourages a more focused and disciplined commitment to the best interests of the corporation.

“As a result of the CBCA amendments related to majority voting and say-on-pay, shareholders have been provided a greater role in their ownership of the corporation, enhancing their shareholder democracy rights,” Wetston says.

The CBCA amendments, collectively, “capture the zeitgeist of the last probably 10 years in the evolution of corporate governance,” Bhardwaj says.

He cites, for example, the push from institutional investors to see strong environmental, social and governance practices; the need for transparency around compensation and connecting that to shareholder value; the BCE decision directing companies to consider the impact of their actions on multiple stakeholders; and conversations that have taken place in the boardroom and elsewhere around the importance of diversity.

“Now that’s all being tucked into a piece of legislation that is capturing a lot of the thinking that’s already been out there,” Bhardwaj says. DJ JEFF BUCKSTEIN is an Ottawa-based freelance business writer with a CPA, CGA designation. He writes about personal finance, accounting and other businessrelated issues and current events.

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BY Jane Gadd

Margaret Franklin, the new CEO of the CFA Institute, talks to business writer Jane Gadd about using her ‘megaphone’ for good, the importance of purposeful capitalism, and the imperative of attracting more women to the male-dominated investment profession

THE UNCERTAINTY ROILING GLOBAL MARKETS for the foreseeable future could pose a real test for many financial leaders’ commitment to environmental, social and governance (ESG) principles when making investment decisions.

But it’s a challenge that will be met, says Margaret Franklin, a Canadian who was recently appointed as head of the CFA Institute, the global association that sets standards and credentials for investment professionals.

“I can understand where that thinking comes from,” she says when asked if all the ESG talk is likely to translate into action now that economies are in crisis. “But there is a real sense of urgency that I detect almost everywhere I go, particularly around the E and the S.” In a recent phone interview from New York, Franklin says this sense of urgency has grown this year.

Despite the pandemic roiling markets, CFA chief Margaret Franklin says there is still a sense of ‘urgency’ surrounding environmental, social and governance principles.

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‘CAPITALISM DONE WELL IS ABSOLUTELY A FORCE FOR GOOD,’ SAYS MARGARET FRANKLIN, THE CANADIAN WHO LEADS THE CFA INSTITUTE, THE GLOBAL ASSOCIATION THAT SETS STANDARDS FOR INVESTMENT PROFESSIONALS. A new imperative “It’s coming from women — millennials in particular are saying ‘Where is this capital being allocated?’ It’s coming from the common person, and from the data and the science.”

With capitalism coming under intense scrutiny, it is essential that it continue to earn its social licence to operate, Franklin says.

“Capitalism done well is absolutely a force for good: You can see that in infrastructure, institutions like hospitals, universities, medical advancement, the kinds of things a stretched government can’t do. And the CFA Institute has a very meaningful role to play to shape the thinking about how purposeful capitalism, capitalism done well, and certainly investing done well, can achieve those goals.”

The 54-year-old mother of two adult children is determined to use her new “megaphone” to champion integrity and the social good as priorities for investment professionals.

“The institute’s mission is to lead the investment profession to the highest standards of ethics, education and professional excellence for the ultimate benefit of society,” she says. “I’ve always thought that mission was very aspirational, but I think it’s now necessary.”

Investors of the future need to look beyond the traditional risk and return considerations, she says, and assess a third important dimension: impact.

Since Franklin took up her position last September, the CFA (chartered financial analyst) program has been given expanded recognition by Canadian regulators. Starting this June, the Invest-

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ment Industry Regulatory Organization of Canada will count the Level 1 CFA exam as equal to the Canadian Securities Course for meeting basic licensing requirements for investment professionals.

In addition, those who pass all three CFA exams will meet IIROC’s proficiency requirements for registration in portfolio management, dealing with retail clients and for supervisory research analysts.

‘Visibility is validity’ Asked about her status as the first woman to head the Institute in its 73-year history, she is voluble on the subject of attracting more women to the overwhelmingly male world of investment professionals.

“When an industry has a homogenous cohort, it suggests that certain groups cannot imagine themselves in it,” Franklin says. “So, one of the important things I talk about is that visibility is validity: If I can see it, I can imagine it.”

As a girl, she did not imagine this particular job for herself, she says, but she knew she wanted to go into business someday. That came from her weekend visits with her father to his insurance brokerage firm.

She kept going even though she failed her CFA Level 1 exam the first time, in 1994, having been kept awake at night by her threemonth-old son and falling asleep during the exam.

As important as it is to make the profession more female-friendly through flexibility around childbearing and caregiving, it would also help to change the language about what financial analysts do, Franklin says.

“Take some of the language that reflects the core activity of the role — that is, problem-solving for clients. It’s not purely analytical.

There’s a number of complex things that go into serving investors well. I think that is quite attractive to women — problem-solving as opposed to just technical descriptions.”

She cites recent CFA Institute research on the future of finance that highlighted what aspects of the profession are attractive and what are deal-breakers for millennial candidates.

“For women, that’s ‘Does your company have a purpose?,’” she says. If a financial firm can characterize its core function in terms of purpose, values and integrity, it will be more attractive to women pursuing a career in the field, she adds.

The research also found that such intrinsic motivators as autonomy, mastery, purpose, recognition and friendly co-workers are even more important to future investment analysts than the level of pay and benefits.

“Firms need to ask themselves, if they’re not attracting women in a reasonable number, are they attracting the right people?,” Franklin says. “When you’re able to attract women, the entire business will benefit as it will open up to more types of people. Not just gender, just better people.”

She uses the analogy of curb cuts — the slopes from sidewalk to street that were designed for wheelchair users but now are used by skateboarders, parents pushing strollers and people using walkers.

“So even though this was designed specifically for wheelchair access, it has a universal positive impact. If we change labour market structure for women facing childbearing, caregiving, we’ll find we open it up for everything.”

Big problems, sharper minds The evolving CFA syllabus will place greater emphasis on ESG and on alternative asset classes, the impact of cybertechnology on the profession, and the continuing shift from institutional investing to individual investing as defined-benefit pension plans dwindle, Franklin says.

When she started her finance career, she worked largely in institutional investment and defined-benefit plans were the standard. Now they’re disappearing in all but the public sector, and even there they are under pressure owing to the growing proportion of senior citizens.

Franklin’s two sisters, their husbands, her mother and her fatherin-law are all part of the Ontario Teachers’ Pension Plan, Franklin says.

“I remember meeting with [the plan’s chief investment officer] a number of years ago, and he said we have a math problem for which there isn’t necessarily an easy investment solution. Teachers live longer and investment returns are going to be challenged.”

It is this type of challenge that requires the best, brightest and most excellent minds, and one of the things the CFA Institute does well is bringing those minds to the table, Franklin says. DJ JANE GADD is a former editor and reporter for The Globe and Mail. Over three decades, she covered local, national, international, business and legal news, and was the newspaper’s Facts and Arguments editor for four years.

MARGARET FRANKLIN

President and CEO CFA Institute Margaret Franklin leads the CFA Institute and its more than 170,000 members worldwide from the institute’s head office in Charlottesville, Va. She assumed the role in September, 2019, with 28 years of investment and wealth management experience.

Born in Ottawa and with a bachelor of administration in economics from McMaster University in Hamilton, Franklin now divides her time between the United States and Toronto, where her husband has an architectural business.

She began her finance career in the institutional business and has worked with pension plans, endowments, foundations and government agencies at State Street Global Advisors, Marret Private Wealth and Barclays Global Investors.

She has served as chair of the CFA Institute board of governors and is a former president of the CFA Society Toronto board. She is also a founding member of the CFA Institute’s Women in Investment Management Initiative and a member of the Michael Garron Hospital Foundation board in Toronto.

Prior to her appointment as CEO of the CFA Institute, she was president of BNY Mellon Wealth Management advisory services in Canada, and ran BNY’s international wealth management for North America.

She also served as a board member of BNY Mellon Trust Co. (Cayman).

She came to BNY having held multiple senior management positions, including president of Marret Private Wealth and chief operating officer of Marret Asset Management, a credit and hedge fund asset manager in Toronto, and partner with K.J. Harrison & Partners Inc. Her son, who kept her awake at night as a baby and caused her to flunk her first CFA exam in 1994, is graduating from law school this year. Her daughter is graduating from business school.

Franklin was a competitive cyclist in her youth, but now confines her two-wheeled excursions to the bike paths of Toronto.

ICD.CA | 37

THE ART OF GOOD GOVERNANCE THE PRESIDENT OF THE Art Gallery of Ontario’s board of trustees found himself gazing at an array of faces, some trusting, some wary, some with piercing stares, some from the margins of society.

Robert Harding was in his element, surrounded by the provocative, sometimes troubling photographs of the highly acclaimed artist Diane Arbus. He sat no less comfortably than he would in a boardroom, as a chartered accountant turned philanthropist and a veteran of numerous corporate and not-for-profit boards.

“I joke that I retired from my very good-paying job at Brookfield [Asset Management] to take on one where I pay to go to work.”

Harding has served the AGO in various capacities through several periods of major change. He joined the board in 2006, during the throes of the AGO’s makeover by star architect Frank Gehry. Later, he was on the search committee that brought in current museum director and CEO Stephan Jost in 2016. And in 2017, he took on his present-day role as president of the board of trustees.

Last year, the board helped to usher in a lower admission-pricing scheme to attract larger crowds, with a new $35 annual pass and free admission for visitors aged 25 or under. It was a bold move for an arts institution fearful of depleting any revenue stream and a gutsy initiative for the board to approve.

As Harding talked about the inner workings of the AGO board, it became clear why he wanted to sit among the photographs. Along with the murky stories suggested in each image and Arbus’s own opaque biography, the exhibit also held hidden stories about the board itself.

It’s safe to say that arts boards are as dissimilar to their corporate counterparts as they are similar. Ask five board chairs about that difference, and you’ll get five different answers.

Some, such as Jennifer Tory, chair of the Toronto International Film Festival, emphasize the same general governance and oversight functions performed by every board, whether corporate or not-for-profit. Others, such as Harding at the AGO or Jonathan Morgan, who chairs the Canadian Opera Company (COC) board, highlight the differences, the educational programming, the

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PHOTOGRAPH COURTESY THE AGO

Big issues

Serving on the board of an arts organization demands time, enthusiasm, business savvy, networking and fundraising. When directors or trustees do it right, the rewards can be priceless, Guy Dixon writes

ICD.CA | 39

community outreach, the service to the arts.

And although workplace conduct and harassment issues have risen to the top of the agenda of all boards, they were pushed to the fore in the arts community with the resignation two years ago of Soulpepper Theatre Co.’s founding artistic director amid sexual misconduct allegations that were later settled out of court.

“What happened at Soulpepper caused not only its board, but many arts and other boards to look more closely at their management reporting structures and develop much clearer workplace codes of conduct,” said Helen Burstyn, who currently chairs the

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boards of The Walrus and the urban environmental charity Evergreen.

“Also, directors’ liability comes into play,” she said. All arts and not-for-profit boards are made up of volunteers, “but we’re still liable if an employee or somebody who uses our services sues the organization and sues every one of the directors as part of that. So, directors’ liability is a huge issue.”

Give or get Then there is fundraising. Either you give, or you get, or you get off the board, as the saying goes. No matter what professional expertise someone brings to the table, the expectation is that each member of an arts or not-for-profit board will give a certain amount or be able to get donations from outside. Sometimes the expected amount is in writing, sometimes its enforcement is less rigid. But on large arts and not-for-profit boards, there is a clear understanding.

“We do have an annual trustee appeal, and we expect 100 per cent participation in that, recognizing that people need to give within their own means. We have some trustees who would annually be giving six figures, and we have other trustees with whom their contribution might be buying a membership,” said the AGO’s Harding.

But for those who can only give a little bit, “they bring something to the board; they represent a community, or a skill set that we very much value and want,” he said.

The typically large size of arts boards reflects that fundraising need. A third of the museum’s funding comes from the province,

PHOTOGRAPH COURTESY THE AGO (ABOVE), CRAIG BOYKO(RIGHT)

Membership at the Art Gallery of Ontario has risen since the board approved a gutsy plan to drop the annual fee to just $35.

“We have some trustees who would annually be giving six figures, and we have other trustees with whom their contribution might be buying a membership.”

- Robert Harding ICD.CA | 41

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The Four Seasons Centre in Toronto, home of the Canadian Opera Company.

The AGO’s Arbus collection is said to be the second largest in the world, marking a major step for the AGO in further enlarging its photography collection — helped by the board’s photography curatorial committee.

Building the board “We have essentially a requirement that all of our board members sit on at least one of the board committees: the finance committee, the development committee that looks after fundraising and stewardship, a nominating and governance committee, the collections

PHOTOGRAPH BY SAM JAVANROUH

a third from tickets and food and beverage sales, and a third from philanthropy. The AGO board has 27 members, not including about a dozen-and-a-half lifetime appointees and those with other honorary distinctions.

He said that a board seat isn’t just for the superrich, a perception often attached to the Museum of Modern Art and the Metropolitan Museum of Art in New York, where philanthropy can become a competition sport. Whereas the AGO Massive fundraising party and the black-tie Art Bash gala have places of prominence on Toronto’s philanthropic calendar, the Met Gala attracts international headlines.

“Having said that, the board collectively raises about $700,000 a year in our annual trustee appeal,” Harding said. Over and above that, between 2016 and 2018, current trustees and lifetime trustees emeritus of both the AGO and the AGO Foundation (which handles the museum’s endowment) gave $7-million in cash toward annual programs and activities and $9-million in donations of art, library and archival material, and other gifts-in-kind, according to the museum.

The onus on fundraising, though, can sometimes crimp efforts to broaden board membership to younger directors, Burstyn said.

“At every arts board, and the ones that are honest enough to say it, there is an expectation that you have some ability to give or to get — and that’s difficult, especially for the major arts organizations, the big ones, to recruit younger people sometimes, because they don’t have that giving or getting ability. The next generation is not going to be able to give as much as their parents did,” she said.

This is a concern heard throughout the sector. So funding has to come from new sources, including retail kiosks and restaurants, the rental of museum or gallery space for corporate or other functions, or, as The Walrus is doing, holding ticketed speakers events. The trend is to get the institution and the board to think more like a social enterprise.

“The double and triple bottom line is just something we accept now. A quadruple bottom line is sometimes being added,” Burstyn said. “We are adding to our bottom lines because we have to get more inventive. There are very few organizations that operate strictly on the basis of donations, sponsorship and grants. And everyone is trying to figure out how to increase the earned revenue opportunities that are consistent with how an organization operates.”

The AGO’s reduction in admission pricing would seem to fly in the face of this need for any and all revenue. Yet, 151,000 visitors have bought the new $35 annual pass since it was introduced in May 2019, and if you combine those with the 100,000 or so visitors who bought more expensive memberships to support the AGO, that total now exceeds membership at New York’s Met or MOMA, Harding said.

Still, for major projects, such as the acquisition of the Diane Arbus prints, trustee support clearly remains a lifeline. And here is where Harding shifted the discussion back to the photos around him.

The 152 prints on display were just a fraction of the 522 photos purchased from the photographer’s estate by a handful of donors, many of whom sit on the board.

The acquisition was done through the Fraenkel Gallery in San Francisco and then given by the donors to the museum in 2016.

“Deep knowledge of the art form isn’t a prerequisite for joining the Canadian Opera Company’s board. But broad enthusiasm and a city-builder attitude are” - Jonathan Morgan.

ICD.CA | 43

Keeping it interesting Deep knowledge of the art form isn’t a must, Morgan said (even though the board does attract the occasional opera aficionado). What is essential is a broad enthusiasm and a city-builder mentality. “Once in a while, someone will look at one of the big arts boards and think that looks like a good networking opportunity, and it ends up just not working out all that well,” he said. “It’s really important to try to get people who not only have something they can contribute, both monetarily and in terms of advice, but also that they are enthusiastic.”

There is, however, a reciprocity that all board chairs acknowledge.

Harding at the AGO noted how one artist on the board asked not to sit on an acquisitions committee, which would have been a logical fit, but on the finance committee to learn more about the money side.

“Most people who are invited to join a board are a little wary these days of being completely subordinated to a fundraising

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At Crow’s Theatre in Toronto’s east end, volunteer directors seek a wider role than just fundraising - they want to be involved in governance.

role, and not getting to do anything that’s also interesting in the governance of the place, and in special projects, other forms of involvement,” said John Duffy, chair of Crow’s Theatre, a theatre company in the east end of Toronto.

“Simply being put to work as a corporate canvasser or hammering your friends, I don’t know a lot of people who are dying to serve in board roles that look like that,” he said.

But then on busy, large boards like the AGO’s, there’s the risk that board meetings will turn into a litany of reports, with each committee highlighting its endeavours and no one exchanging ideas, Harding said.

“In the very first board meeting that I chaired, Stephan [Jost, the AGO’s CEO] and I very purposefully had only two slides,” Harding said. “We were talking about changes that were happening in the world at large, and how that would impact us.

Most of the discussion came from individuals, I would say, who were the newer tenured individuals on the board.”

That would have been around the time when the board was facing myriad challenges: the recently acquired Arbus collection and how to exhibit it, the new admission pricing, a still fairly new CEO. In short, Harding was keen to get to what mattered most. DJ Toronto-based writer GUY DIXON was, for many years, a reporter at The Globe and Mail, where he covered business, the arts, and often the intersection between the two.

PHOTOGRAPH BY DAHLIA KATZ

committee that oversees the collection that we own,” Harding said, reeling off some of the numerous committees populated by board members.

Below those committees are more specialized working committees, in which board members connect more closely with museum staff on myriad issues. Every one of the Diane Arbus prints requires storage, care and maintenance. They have to fit within the overall collection. It has to make sense for the AGO to house them at a time when the museum is implementing its new admission pricing. All of these things have a cost and require different skill sets to analyze.

“Like any board, we have a skills matrix which identifies primary skills that we are looking for,” Harding said. The question is how to meet all the different skill requirements, while also juggling diversity and fundraising needs.

“That is of course where it really is more of an art than a science,” said the COC’s Morgan. “It also depends on where your board is at the moment, what its needs are, what its makeup is.”

And it depends on who is available. “We face the same problem as corporate boards, but in some ways more so, because I think people are generally less willing to sit on a variety of boards than they were in years past, because more is expected of directors.”

ICD DIRECTORS ON THE MOVE

DIRECTORS ON THE MOVE The ICD would like to congratulate the following members on their recent board appointments

Consumer

Financial

Government

Not-for-profit

Oil & Gas

CHAIR CONSUMER PROTECTION BC

DIRECTOR HAMPTON FINANCIAL CORP.

DIRECTOR SAFETY CODES COUNCIL

DIRECTOR CKUA RADIO FOUNDATION

DIRECTOR DIVERGENT ENERGY SERVICES

Education

G. Ross Lamont, ICD.D

Metals & Mining

Todd Georgieff

Transportation

Robert Falconi, ICD.D

DIRECTOR NOVELIS INC.

DIRECTOR CANADIAN PULMONARY FIBROSIS FOUNDATION

COMMISSIONER ONTARIO NORTHLAND

Gregory Honig, ICD.D

Charlene Butler

Michelle Faysal

Rod Dewar, ICD.D

Ralph Lean, ICD.D

Mary Traversy, ICD.D GOVERNOR YORK UNIVERSITY

Robert Graham, ICD.D GOVERNOR RYERSON UNIVERSITY

Azim Lalani GOVERNOR UNIVERSITY OF BRITISH COLUMBIA

DIRECTOR PACE CREDIT UNION

Donna Tona DIRECTOR SERVUS CREDIT UNION

Brad Krizan, ICD.D

Gary Comerford, ICD.D

Terry Geib

DIRECTOR NORONT RESOURCES LTD.

DIRECTOR SERVUS CREDIT UNION

Glenn Mullan, ICD.D

Jonathan Graff, ICD.D DIRECTOR DOORR INC.

John Lamb, ICD.D CHAIR SERVUS CREDIT UNION

DIRECTOR AZIMUT EXPLORATION INC.

Elizabeth Hurley, ICD.D

DIRECTOR BOW VALLEY PRIMARY CARE NETWORK

Geoff Bury

CHAIR GREATER LONDON INTERNATIONAL AIRPORT AUTHORITY

Wan-Peng Sun DIRECTOR RESPONSIBLE GAMBLING COUNCIL

Jeffrey Morton, ICD.D DIRECTOR CREDIT COUNSELLING SOCIETY

Pasquale Minicucci, ICD.D DIRECTOR REPUBLIC BANK (EC) LTD.

Please contact Sheldon Mahabir, director of member engagement, at smahabir@icd.ca to publicize your board appointment.

ICD.CA | 45

ICD EVENTS The ICD’s busy season of events continued across the country until the middle of March when activities were cut short by the Covid-19 crisis. Members can check our website for updates on scheduling as they become available.

Toronto

PHOTOS: J.P. MOCZULSKI IN KITCHENER

ICD CEO Rahul Bhardwaj addressed a sold-out event at The Empire Club of Canada on February 26 on the subject of changing times and changing leadership.

46 | DIRECTOR JOURNAL

EVENTS

Kitchener The Southwestern Ontario chapter hosted an informative event on March 12 about strategies for using social media.

ICD.CA | 47

“NEW IDEAS CAN ENERGIZE A BOARD.” — CLAUDE NORFOLK, ICD.D

Keep on top of trends affecting your board through education.

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A limited number of scholarships are available SUPPORTED BY: JOINTLY DEVELOPED BY: through the generous support of RBC.

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Receive guidance on how to plan for both effective board meetings JOINTLY DEVELOPED BY: and a productive ongoing dialogue.

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These 1-2 day offerings tackle topical issues actively impacting governance and Director oversight duties.

BOARD OVERSIGHT OF CULTURE: Improve oversight of a healthy, productive workplace.

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ICD WEBINAR SERIES (EXCLUSIVE TO ICD MEMBERS) Participate in ICD’s webinar series, where thought leaders address timely issues impacting Canada’s board leaders.

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DIRECTORS’ SYMPOSIUM CLIMATE CHANGE AND COMPETITIVENESS IN CANADA To attend, visit icd.ca/ClimateChange

POLICY PERSPECTIVE

Decision-making in crisis

ILLUSTRATION BY AARON MCCONOMY

Newly empowered employees are getting it done

OF ALL THE recommendations coming out But remote workers aren’t alone in makof our Global Director Dialogue late last ing real-time adjustments and improveyear, where the Institute of Corporate Diments. At grocery stores, hourly employees rectors brought together leaders of globworking in difficult circumstances have ally significant companies, one struck found ways of reorganizing store layouts me as a little impractical. In a discussion to minimize the risk of transmission while about training and upgrading of skills, also maintaining convenience. Shelf stockparticipants suggested that employees ers and department managers have adaptfigure out how to make their own roles ed their daily interactions with customers more efficient and that management and drivers to try to ensure both safety and should develop mechanisms to let them service. These are small but important addo just that. justments that could only be made on site, It wasn’t clear to me then how such and they give added meaning to the term a process could be institutionalized at a “essential workers.”

Matthew Fortier medium-sized organization, let alone a Nowhere has the importance of finding ICD’s Vice-President multinational company. But then a globefficiencies in the past few months been of Policy al pandemic made managers and leaders starker than in our health-care sector. of everyone. Junior employees and frontDoctors, nurses, support staff, adminisline workers were, quite suddenly, maktrators and volunteers have been forced ing real-time decisions and using new to think about how to keep patients – and technologies to serve clients and get the themselves – safe. This has demanded crejob done. ative changes not only to patient care but Raise your hand if your business conalso to procurement processes (think not tinuity plan included the term “Zoom” just of respirators but also of gowns, masks before March. Few publicly traded companies have captured the and other personal protective equipment). spotlight in quite the same way as Silicon Valley’s Zoom Video Under intense and unrelenting pressure, thousands of leaders Communications Inc. The Covid-19 crisis has transformed the have emerged at exactly the right time. easy-to-use conferencing service into the equivalent of a public There are two lessons here for boards. First, the future of work is utility for tens of millions of newly remote workers who have now and it is undeniably human. Technology will play an important shown that they are willing to adapt to the technology to get their role in influencing what work is possible, but the crisis has shown work done. that people will determine how and why that work is executed.

Scheduling ad hoc video chats, sharing work over their Second, truly effective leadership extends well beyond the screens and pushing projects ahead without the benefit (or ranks of senior executives. Entrusting all staff with decision-makhindrance) of team meetings, more employees have been able ing capacity can lead to greater efficiency and engender a culture to lead by doing. The fact that productivity continues against a of mutual trust and appreciation throughout organizations. This backdrop of health and personal financial anxieties is particutype of corporate culture will be a key asset after the pandemic, larly remarkable. when all employees will need to play a role in rebuilding. DJ

ICD.CA | 49

PHOTOGRAPH BY CLIQUE IMAGES/UNSPLASH

PARTING SHOT

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Diverse and inclusive leadership has the power to transform Canadian competitiveness

Canada’s prosperity depends in large part on innovation, and innovation requires new ways of thinking — diverse thinking. If your board directors aren’t focused on innovation and helping you to think in new ways, your company will be left behind.

RAHUL K. BHARDWAJ, LL.B, ICD.D President and CEO, Institute of Corporate Directors

It’s time to bring more diversity to the boardroom.

Today only 5% of Canadian companies have a female CEO and just 14% of board seats at publicly traded firms are occupied by women. Clearly, more progress can be made.

Take the important step of complying with the federal government’s new diversity disclosure requirements. To help your Board, use the ICD Board Diversity Toolkit at icd.ca/diversity.

Visit ICD.ca/diversity to learn more.

Institute of Corporate Directors Institut de administrateurs de sociĂŠtĂŠs 2701-250 Yonge St., Toronto, Ontario M5B 2L7

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