Director Journal - March/April edition by Institute of Corporate Directors

APRIL 2019 MARCH

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A publication of the Institute of Corporate Directors

Director Journal

POLITICAL INTELLIGENCE The value of recruiting former politicians By Richard Blackwell

ESTELLE MÉTAYER Digital directors

DWIGHT BALL ICD’s Premiers Series

PETER DEY Restraining populism

Director Journal Director Journal is published by the ICD six times per year as a benefit to its members. Digital versions of the articles can be accessed at www.icd.ca/DirectorJournal

EDITORIAL EDITOR

Simon Avery

CONTRIBUTORS Richard Blackwell Paul Daly Peter Dey Colin Ellis Virginia Galt J.P. Moczulski Christinne Muschi

GRAPHIC DESIGN Kristina Divic

INSTITUTE OF CORPORATE DIRECTORS Rahul Bhardwaj, LL.B, ICD.D President and CEO Sari Diamond Corporate Secretary Patricia Fletcher Vice-President, Education Matthew Fortier Vice-President, Policy

FEATURE In sectors where understanding the process of government and regulation is essential, recruiting former politicians to boards could prove a savvy move

Ken Gibson Chief Administrative Officer Jan Daly Mollenhauer, ICD.D Vice-President, Sales, Marketing and Membership Orli Giroux Namian Vice-President, Chapter Relations

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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

HOW GOOD IS YOUR BOARD’S POLITICAL INTELLIGENCE?

– by Richard Blackwell

QUEL EST LE DEGRÉ D’INTELLIGENCE POLITIQUE DE VOTRE CONSEIL?

– par Richard Blackwell

CONTENTS

You won’t need to change the entire board, but you might want one or two digital directors to join. ESTELLE MÉTAYER Technology and governance specialist

DirectorJournal 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. 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.

DEPARTMENTS

EDITOR’S NOTE It’s political

ICD EVENTS

The Premiers Series: Dwight Ball in conversation with the Newfoundland and Labrador chapter - by Simon Avery

PRESIDENT’S DESK Broadening our skills

The Ontario chapter on managing geopolitical risk

GUEST COLUMN

Governance guru Peter Dey says boards have a role to play in curbing the rise of populism

DU BUREAU DU PRÉSIDENT Élargir nos compétences DIRECTORS’ DILEMMA How to improve the CEO evaluation process - by Heather Wilson TECHNOLOGY

Estelle Métayer on the need for `digital´ directors - by Virginia Galt

Le nécessaire « administrateur numérique » - par Virginia Galt

POLICY UPDATE

Proclaiming cultural values isn’t enough - by Matthew Fortier IN PROFILE

CPAB’s Carol Paradine leads Canada’s audit watchdog as it meets the new challenges of the digital age - by Colin Ellis DIRECTORS ON THE MOVE

Cover photos, pg 2, 12, 13, 15, 16, 34, 35, 37 THE CANADIAN PRESS IMAGES/Denis Beaumont THE CANADIAN PRESS/Ben Nelms THE CANADIAN PRESS IMAGES/Graham Hughes THE CANADIAN PRESS/AP/Jacquelyn Martin DIRECTOR JOURNAL /CALEY TAYLOR PRESS ASSOCIATION/ANTONY JONES

Director appointments: December 2018 to January 2019

EDITOR’S NOTE

It’s political

SIMON AVERY EDITOR

savery@icd.ca

DIRECTOR JOURNAL

These days, politicians seem to dominate the headlines for all the wrong reasons. Accusations of improprieties, abuse of power, poor judgment, even criminal wrongdoing have cast an unwanted spotlight on some Western political leaders. In this issue, we shift the discussion to focus on the valuable skills and experience former politicians can offer boards of directors, especially those whose companies must navigate a changing regulatory environment. In Richard Blackwell’s cover story, “How good is your political intelligence?,” (page 12) former cabinet ministers and premiers talk about the importance of boards being able to understand the process of government and having the ability to analyze geopolitical events and their likely effects on a business. If the political realm is a good training ground for future corporate board members, does the business world prepare individuals well for a future career in politics? Newfoundland and Labrador Premier Dwight Ball thinks so. The former small business owner, real estate developer and venture capitalist spoke to members of the provincial chapter in February and encouraged those who want to contribute to policy decision-making to seek appointments to agencies, boards and commissions. (See “Man with a plan,” page 18.) His government has made a concerted effort to open up the selection process beyond the politically connected with the creation of an Independent Appointments Commission. Exemplifying the ICD mantra that “Better boards make better decisions, which contribute to a better country,” the Premier explained how the new process is leading to a selection of stronger, more diverse candidates, which in turn should improve decision-making by the boards of these agencies, thereby resulting in better outcomes for the province.

PRESIDENT’S DESK

Re-evaluating in times of change Take a look at the board of any major organization in this country and chances are you’ll find that the directors score highly in terms of both cognitive intelligence and emotional intelligence (condensed to IQ and EQ, respectively). But what about “PQ”? While a high IQ and EQ are expected, our “political intelligence quotient” is generally overlooked. But today, more than ever, it’s becoming essential for boards to understand the process of government – especially those that oversee businesses operating in regulated sectors, including financial services, energy and technology. The importance of political intelligence was driven home for me on a recent trip to Britain. On the eve of the country’s planned divorce from the European Union, many companies are scrambling to make sense of the political landscape and to plot a steady course for the next year or more. In February, I had the pleasure of moderating a discussion between Premier Dwight Ball of Newfoundland and Labrador and members of the provincial chapter in St. John’s. The discussion focused on a variety of issues relevant to the local business community. This was the Institute of Corporate Directors’ third Premiers Series event, following similar sessions in Halifax, with Nova Scotia Premier Stephen McNeil, and in Winnipeg, with Manitoba Premier Brian Pallister. It’s our hope at the ICD that through our Premiers Series, we are helping to increase the political intelligence within Canada’s boardrooms. The discussions are

candid and two-way, with the intent of improving boards’ understanding of how governments work, and reinforcing political leaders’ understanding of the vital decision-making role that boards and directors play on behalf of Canadian organizations. Our next Premiers Series event is scheduled for May 8 in Fredericton, when the Maritime chapter will host New Brunswick Premier Blaine Higgs, a former provincial finance minister and executive with Irving Oil. The ICD is developing ways to help improve director knowledge in other areas as well. One such initiative is our Directors’ Dilemma Series, which launched in February, hosted by the York Region branch of the Ontario chapter. Conducted in partnership with the law firm Torys LLP, these interactive events are designed to tackle some of the more ambiguous challenges boards face – the ones where there are no checklists, where definitive information may not be available and a distinct course of action isn’t clear. They are structured to give members the opportunity to exercise their director skills. Acting as members of a special board committee of a fictitious company, participants are challenged to devise a course of action from a set of facts out of a case study. We will be bringing Directors’ Dilemma events to Edmonton and St. John’s soon, and I urge members to keep an eye out for these and other learning opportunities that the ICD will be offering across the country in the months ahead.

RAHUL BHARDWAJ LL.B, ICD.D

President and CEO, The Institute of Corporate Directors

MARCH/APRIL 2019

DIRECTORS’ DILEMMA

THE

DILEMMA

Q: We would like to improve our CEO evaluation process. How do leading boards assess their CEOs? HEATHER WILSON ICD’S DIRECTOR OF RESEARCH SERVICES

DIRECTOR JOURNAL

Boards have an essential responsibility to effectively evaluate the performance of their chief executive officers. The board must have confidence that the CEO is delivering on the organizational strategy, as well as providing the right leadership and effective oversight of day-to-day management. Understanding the CEO’s performance is also central to other important board responsibilities, including strategy oversight, executive compensation and succession planning. An important first step in the evaluation process is to clearly define the CEO’s goals at the start of his or her tenure so that the criteria for measuring performance are well established and understood. Keep in mind that it is also important to choose an approach relative to the size and maturity of the organization. “Not every board is going to conduct evaluations in the same way, and that is appropriate,” says Debbie Fischer, an experienced director with both for-profit and not-for-profit boards who chairs several human resource (HR) committees. “The process should be adjusted to fit the circumstances of the organization. For example, a board may want to include input from the executive team annually but choose to do a more extensive 360-degree or multi-rater component in alternate years for developmental purposes.”

DIRECTORS’ DILEMMA

Most directors understand that they have ultimate responsibility for the annual review of the CEO and for ensuring that he or she is successfully executing the strategic plan. But some boards struggle with how to manage the process successfully. One method Fischer felt was particularly successful was a facilitated discussion, with the entire board weighing in on the CEO’s performance. Each board member brought their own perspective to the discussion, varying points of view were brought forward and aired, and a consensus reached on the evaluation of CEO’s goals and overall performance. In a Harvard Business Review article entitled “Evaluating the CEO,” Stephen Kaufman, a former CEO and senior lecturer at Harvard Business School, described the transformation of his own executive performance review from a “perfunctory” affair to a well-thought-out process involving key members of both the board and C-suite. Directors and executives met and worked through a structured interview that focused on five key points: leadership, strategy, people management, operating metrics and relationship with external stakeholders. By gleaning feedback from the CEO’s direct reports, the board received nuanced input into Kaufman’s behaviour, challenges and achievements that may have otherwise been overlooked. The followup was also an important part of the process, with the CEO reflecting on the feedback provided and supplying a memo outlining his understanding of the commentary so that everyone understood the major points raised. Fischer says it is crucial that the CEO’s goals be tied to the business plan and strategy, and that the board agree

on how they will be measured. “Some qualitative goals can be fuzzy,” she says, “so boards need to be very clear about what success will look like for both subjective and quantitative goals, particularly if such performance is tied to incentive pay. Often, goals are not spelled out with sufficient clarity.” While annual goals are an important component of the evaluation process, boards should also incorporate an assessment of the CEO’s leadership skills and developmental areas. In addition, boards should include a formal, but less extensive midyear check on the CEO’s goals, as well as regular updates on quantitative goals or metrics. “Sometimes boards assume the annual corporate scorecard constitutes the CEO’s annual performance goals,” says Jackie Beaurivage, a director who has served on numerous boards. “However, boards need to challenge themselves to think through ‘What specific things do we need our CEO to do this year to help achieve our plan?’ Applying that filter often leads to more specific CEO goals where his or her contribution can be more readily assessed.” Communicating the results of the evaluation to the CEO is another critical step in the process, Fischer says. “I have found having two board members in the meeting – typically the board chair and the chair of the HR committee – is useful in order to ensure the breadth of the feedback is communicated effectively and to have the key points of the conversation noted. The focus of the meeting should be on having a constructive conversation on the performance goals and supporting the CEO’s professional development needs.” Cornell Wright, a partner at Torys LLP who advises boards on corporate

governance, adds that assessing executive performance is incomplete unless it is tied to compensation. “The CEO evaluation process must be integrated with the executive compensation process, both to create incentives in line with performance metrics and to ensure that compensation properly reflects the CEO’s performance against those metrics. Investors are focused on ‘pay for performance’ and boards must ensure that evaluation and compensation programs are aligned with that expectation.” Investing in a robust performanceevaluation system is beneficial for a number of reasons. If the system is well designed, directors can gain some comfort knowing that the strategic direction they have approved is on track and being well executed. Similarly, if there are problems, the process may be able to uncover them before too much damage has been done. The longer a CEO is left to underperform, the greater the chance the organization will face unnecessary challenges or have to replace the CEO unexpectedly, which can be time consuming and disruptive.

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).

PRESENTED IN PARTNERSHIP WITH TORYS LLP

MARCH/APRIL 2019

TECHNOLOGY

PHOTOS: CHRISTINNE MUSCHI

The

‘digital director’ imperative Technology and governance specialist ESTELLE MÉTAYER talks to business writer Virginia Galt about the need for boards to enhance their digital prowess by broadening their recruiting

DIRECTOR JOURNAL

TECHNOLOGY

Last year, the boards of two Canadian organizations beefed up their technology expertise by recruiting tech genius Nicolas Darveau-Garneau, whose full-time job is chief search evangelist at Google. The decision by Quebec City-based Industrial Alliance Insurance and Financial Services Inc. (iA Financial Group) and Toronto’s TMX Group to appoint Darveau-Garneau – who is also an angel investor in startups and a former tech entrepreneur himself – to their boards is a sign of the times. There is an appetite for this new breed of “digital director” as a small, but growing, number of publicly traded companies seeks deeper understanding of emerging technologies at the board level, says Estelle Métayer, corporate director, business professor and chair of the technology committee at the Institute of Corporate Directors’ Quebec chapter. While some boards recruit for the role, others “volunteer one or two of their existing board members, telling them ‘You have to be our digital director; go and acquire the training.’ “I am seeing a lot of this,” said Métayer, an adjunct professor at McGill University’s business school and a faculty member in the ICD’s director education program. Directors are telling her “we need to get better [at technology oversight].”

THE POOL IS DEEP Métayer does not share the commonly held view that there is a shortage of tech talent in Canada. “There is a lot of talent out there. There are a lot of people who deeply understand emerging technologies.” The more worrying skills gap is at the board level. One way to bridge that gap, she says, “is for our governance committees and boards to shift away from systematically asking for an ex-CEO or someone with previous governance experience” to fill an open board position. Organizations are gradually starting to shift. “Some boards are thinking, ‘There are 13 people on my board; we can have one or two who are really digital.’ ” Many of these digital recruits bring much more than tech smarts to the board, she added. Canadianborn Darveau-Garneau, for instance, graduated from the University of Waterloo with a math degree, earned an MBA from Harvard Business School, and worked as an analyst for McKinsey & Co. and Sanford C. Bernstein & Co. LLC before joining Google. In his current role as chief search strategist, Darveau-Garneau helps Google’s top advertisers improve their digital strategy. He is also a guest lecturer on machine learning and marketing at the Kellogg School of Management at Northwestern University in Illinois. Darveau-Garneau is not the only techie on the 12-member iA Group board. Fellow director Louis Têtu is chief executive officer of Coveo Solutions Inc., an artificial intelligence search applications company based in Quebec City. “You won’t need to change the entire board,” Métayer advises, “but you might want one or two digital directors to join.”

EXPERTISE IS EXPANDING Métayer will moderate a panel discussion in June at the ICD’s national conference in Toronto on how technology is driving and changing the director’s role. In her view, it’s no longer enough for the board to have regular briefings from the chief information officer or chief technology officer; it’s essential to have one or two directors at the table with a working knowledge of emerging technologies. Typically, when directors think about tech, they are primarily concerned about cybersecurity risk and the cost and complexity of technology investments. However, “it’s so much broader than that,” with the advent and application of artificial intelligence, augmented reality and virtual reality, drones, blockchain, the Internet of Things, 3-D printing, robotics and cloud computing, said Métayer, founder and president of Montreal-based Competia, which advises corporate executives and boards on “competitive intelligence” and strategy. Métayer is an independent director at BRP Inc. (Bombardier Recreational Products) and Swiss watch maker Audemars Piguet. She’s also a keen and prolific tweeter, providing newsy comments and links on her Twitter account about business, governance and technology developments. To help directors navigate the complexities of governance in the digital age, the tech committee of ICD’s Quebec chapter has just published a guide, “Emerging Technologies: Understanding the Disruption Ahead.” “The board needs to be able to understand how the company is planning for the future, how emerging technologies are empowering or threatening tomorrow’s strategies and MARCH/APRIL 2019

TECHNOLOGY

how it’s managing associated risks such as data privacy, cybersecurity and talent acquisition,” Métayer and her committee members wrote. It’s not that every company will dive into AI, or blockchain (the technology that underpins digital currency transactions) or robotics, but it’s imperative that they understand the rapidly changing technology landscape. “Today’s boards must keep abreast of the opportunities and risks that come with emerging technologies, and surround themselves with the needed expertise to be able to oversee management’s decisions that are most likely to create strategic opportunities,” the guide says. Forward-looking boards are already immersed in these issues, said Métayer, who will be joined in the ICD panel discussion by three seasoned directors: Chris Clark (Loblaw Cos. Ltd., Air Canada, Choice Properties Real Estate Investment Trust), Deepak Chopra (Celestica Inc., the North West Co. Inc.) and Kalpana Raina (Yellow Media Group, Information Services Group). They will be looking at the topic from several angles, including: •

•

Whether risk oversight should be assessed and overseen by a separate committee;

•

How the increase in automation and other new technologies affect the race for talent and threaten existing functions in the organization; and

•

How tech has changed the role of the director and what new skills boards need to acquire or develop;

The challenge, for board members, of keeping up to speed with the technological race and its impact on their organizations’ business models and ecosystems.

DIRECTOR JOURNAL

INACTION IS DANGEROUS Métayer said in an interview that, in the absence of robust tech oversight, organizations are putting themselves at unnecessary risk. She cited warnings by Canadian securities regulators about inappropriate disclosure of material information on social media. (“As social media and the use of the Internet have become increasingly part of how we communicate information, we have observed a higher proportion of corporate disclosure being provided through chat rooms, investor presentations, blogs and social media websites,” the Canadian Securities Administrators said in a 2017 bulletin. “Given that investment decisions are made on material information, it is critical for issuers to adhere to high

quality disclosure practices regardless of the venue used for dissemination.”) Directors seem well aware of the cybersecurity risks posed by hackers breaking into company networks and stealing confidential information. But there are also growing concerns about what companies do with the data they collect from their own customers, Métayer said. “Many companies collect data about the clients [and] clients are just realizing how much is being collected about them, and that can backfire,” she said. “Another liability, in my mind, is strategic,” she added. For instance, there’s a risk that if a company fails to adopt new technology in time, it will grow less competitive. VIRGINIA GALT, a former business and education reporter for The Globe and Mail, covers legal, education and management issues for a number of publications.

•

A board’s need to acquire technological expertise is no longer just about understanding cybersecurity threats. It’s about being able to stay competitive by understanding the building blocks of the new economy.

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Some boards have begun to prepare by recruiting highly successful executives and entrepreneurs from the tech sector. There is no shortage of talent. The key is to expand recruitment beyond former CEOs and current directors.

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To become more technologically savvy, boards don’t have to completely reinvent themselves. Adding just a couple of ‘“digital directors” will prove extremely helpful.

•

There is an increasing variety of resources available to help boards make the shift, including a new report by the ICD’s Quebec chapter called “Emerging Technologies: Understanding the Disruption Ahead,” and a panel discussion at the ICD’s national conference in June, moderated by Estelle Métayer.

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F E AT U R E

POLITICAL

INTELLIGENCE? In sectors where understanding the process of government and regulation is essential â&#x20AC;&#x201C; banking, oil and gas, technology, even the nascent cannabis business â&#x20AC;&#x201C; recruiting former politicians to boards could prove a savvy move, Richard Blackwell writes

MARCH/APRIL 2019

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THE ʻNIRVANA CANDIDATEʼ Last fall, a routine board-appointment announcement raised a few eyebrows among Canada’s corporate leaders. Former prime minister Brian Mulroney was named to the board of directors of New York-based cannabis company Acreage Holdings Inc. He joined other notable ex-politicians around that table: former speaker of the U.S. House of Representatives John Boehner, and former governor of Massachusetts William Weld. Mulroney was the latest addition to a growing list of former government officials helping to guide this new sector. A few weeks earlier, former Mexican president Vicente Fox was named as a director of Canadianbased medical cannabis firm Khiron Life Sciences Corp. Former British Columbia premier Mike Harcourt and former Ontario premier Ernie Eves had also joined cannabis boards, as had former federal cabinet ministers Martin Cauchon and Julian Fantino. In a controversial business such as cannabis, former politicians have added some gravitas to recently formed enterprises that are trying to demonstrate their legitimacy. But these individuals also bring to the table inside knowledge of the levers of government – a key skill for an industry subject to fast-changing regulation. Recruiting former politicians and bureaucrats to serve on boards of directors is certainly not a new idea. For decades, people with experience in government have formed a pool of

DIRECTOR JOURNAL

desirable candidates for corporate and non-profit directorships. These days, however, there is an increasing focus on each individual’s specific expertise, and how the ex-politician can help an organization as it stickhandles global trade disputes, upheavals such as Brexit, regulatory shifts like the legalization of pot, or hotly debated issues such as pipeline construction. And in an era of smaller boards, increased scrutiny of corporate governance and a focus on the overall “skills matrix” of a team of directors, adding an ex-politician to a board must be a calculated strategic move, and the candidates chosen with care. “In the world today, we’ve seen a lot of surprises – the election of Donald Trump, Brexit, Canada’s [changing] relationship with China,” said Anne McLellan, a former federal cabinet minister who now serves on several corporate and non-profit boards. “It is helpful for companies, at least of a certain size and complexity, to understand the processes of government, and how elected officials and public servants are apt to react to a given situation.” Former politicians won’t necessarily be able to provide flawless insight into the thinking of governments, or an inside map of the decision-making process, she said, but they “do have an appreciation of what is probably happening within government at that time; which wheels are turning, and why they are turning in a certain direction.”

An analysis from executive search firm Spencer Stuart shows that about 15 of the 370 board members recruited to 100 of Canada’s largest public companies in the past four years have government backgrounds – about 4 per cent of the total. That proportion has not changed significantly over the years, said Andrew MacDougall, head of Spencer Stuart’s director-recruitment practice in Canada, but the reasons for recruiting former politicians have shifted. In the past, former politicians were often seen as adding prestige to a board, he said. Now it is their skills that are desired, especially for firms in highly regulated industries, or ones that operate internationally. But it is not just political savvy that counts. “The nirvana candidate, when you are looking for those political skills, is somebody who has come to public service following a career in the private sector,” MacDougall said. “Those are hard to find.” The late Michael Wilson, who died in February, fit that description perfectly because he was an executive in the investment industry before he became federal finance minister and later Canadian ambassador to the United States. Brian Mulroney, who was a business executive before he was prime minister, also has those qualifications. Many boards look beyond politicians for their government-related skills, MacDougall said, to bureaucrats with deep experience in the public service. Deputy ministers or other senior civil servants can be effective in board positions, and they come with the added bonus that they don’t usually have the partisan affiliations that are attached to former politicians.

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Former federal cabinet minister Martin Cauchon, former deputy prime minster Anne McLellan, former British cabinet minister Virgina Bottomley. and former prime minister Brian Mulroney

In Britain, among the most attractive board recruits are former senior civil servants, said Virginia Bottomley, who chairs the board and CEO practice at recruiter Odgers Berndtson’s London office. “There’s an appetite to find people who understand how government works, but there is also a skepticism about party politicians,” said Bottomley, a baroness who is a former member of the British parliament and cabinet minister, and has served on several boards. Former officials or diplomats are most in demand because “they are excellent at geopolitical analysis, they understand the economics, and they are good at horizon scanning,” she said. Former politicians can also be attractive to companies, but usually only if “they come from the commercial world originally.”

With so much turmoil in the world today, there is an increasing thirst for board members with knowledge of government and international affairs, Bottomley said. Most boards are reporting that they find business planning and predicting the future very difficult, because of the great geopolitical changes, she said. “As Trump’s international policy unfolds, and as the effects of Brexit become clear, there will be [an] ever greater appetite for individuals who can explain and articulate and predict – if they can – the future.”

CONFLICTS OF INTEREST Former Quebec premier Jean Charest says he was recruited to the board of Publicis Groupe, the huge Parisbased communications and marketing

conglomerate, because it needed a director with experience and insights into North America, where half the company’s business takes place. “They were looking for someone who had a broad cultural perspective of the world … someone with a foothold in North America who had some intuitive knowledge of how the North American business environment works,” he said. When he was premier, Charest said he realized he didn’t need to know everything, but he had to develop the ability to ask the right questions on any specific issue. That instinct, which is born from good judgment and experience, is the same skill that is needed on a board, he said. Overseeing a big, complex company that operates in a number of regions is not unlike running a big, complex government. “They are not the same, but there are a lot of similarities,” he said. “Our experience can be very relevant.” There can, of course, be conflicts that arise when a former politician is offered a board position. Charest said he turned down a directorship at a forestry company because the firm might have to make controversial decisions about operations in Quebec, and “I didn’t think it was either in my interest or in the interest of the company to have someone on their board who could become a target for those who don’t agree with the decisions.” Whether or not to accept a directorship is a judgment call for former politicians – providing that all legal barriers to joining a board have been overcome. They must decide whether or not their past affiliations or decisions could be perceived as a conflict, Charest said. “And keep in mind that, on the question of ethics, we are dealing with moving norms. Things that may have been seen as acceptable 15 years ago are not now.” MARCH/APRIL 2019

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The No. 1 asset is an understanding of how decisions are made generally, and then an ability to build a strategy around that, [combined] with an understanding of the world around us. CHRISTY CLARK

Former premier of British Columbia Former Quebec premier Jean Charest and former B.C. premier Christy Clark.

UNDERSTANDING THE LANDSCAPE Another former provincial premier, British Columbia’s Christy Clark, said the most important attribute a politician can bring to a board is not insider knowledge but their skill as a strategist in complex situations. “The No. 1 asset is an understanding of how decisions are made generally, and then an ability to build a strategy around that, [combined] with an understanding of the world around us,” said Clark, who left politics in 2017 and now serves on the boards of Shaw Communications Inc. and Recipe Unlimited Corp.  Politicians also bring an acute awareness of how decisions and corporate action will be received by the public, she said. “We have a hyperawareness of how everything is going to feel and play out there in the market.” In Canada, Clark said, many large companies function in a regulated environment – in banking, telecommunications, transportation or energy. There are specific risks 16

DIRECTOR JOURNAL

associated with regulation, so it is crucial to “understand the political landscape, and be able to see down the road.” Someone with knowledge of the decision-making processes of senior officials and bureaucrats, and “who has been in those rooms where those decisions are made,” can be extremely helpful to a board, she said. Long-time governance guru Peter Dey, now the chair of investment dealer Paradigm Capital Inc., said expoliticians can improve a board’s overall governance, but not just because they are ex-politicians. “It is because of the varied experience that they’ve had as a politician,” dealing with challenging issues and bringing people to consensus. These attributes are highly valued on boards today, he said, particularly if the individuals are seen to have risen above partisan politics.   Dey, author of the seminal 1994 report on corporate governance called “Where Were the Directors?” that set a course for smaller, more independent boards, said companies are no longer going to hire ex-politicians merely for

show. “They realize every seat at the table has to count, and if you choose somebody for the wrong reasons, you [essentially] have a vacancy at the table. Boards can’t afford that.” For some companies, specific political experience is highly prized if it aligns with particular regulatory or trade issues, Dey said. “If you’re in the softwood lumber business in B.C., or the energy sector in Alberta, trying to get product to market, or the agricultural sector in Quebec, the right person can add value to the overall knowledge of the board.” There’s one exception to this trend, in the cannabis sector, Dey said. Here, the recruitment of former politicians appears to be aligned with the desire to shift the sector into the mainstream. “I’m not sure the politicians are going to help the cannabis producers work through the regulatory maze,” he said. “I do think that there is an initiative to try to convince people that the cannabis business is a mainline business. If a company can recruit a prominent politician to the board … it sends a

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message to the market that ‘Even some of our leaders are prepared to be associated with the sector.’” Derek Burney, former Canadian ambassador to the United States and former CEO of Bell Canada Enterprises and CAE Inc., has spent many years serving on boards and recruiting directors. He said it is difficult to generalize about the value of an ex-politician to a board, and it all depends on the personality and the relevant experience of the individual. “It comes down to the calibre of the people,” he said. Burney said that when he was looking for directors, as chair of a corporate governance committee, his objective was always to find someone who would blend with the chemistry of the board. “You want people from diverse backgrounds, who bring independent thinking to the board and are capable of challenging management without micromanaging management.” That applies as much to former politicians as any other potential director, he said. 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.

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Businesses are increasingly recruiting former politicians to their boards to help them manage international challenges, regulatory shifts and controversial projects.

•

Former politicians understand the process of government and how elected officials work with public servants and make decisions. They don’t bring special inside information, but rather understand how to build the right strategy and ask the right questions.

•

It is important for a retired politician who is considering a board role to first decide whether or not their past affiliations or decisions could be perceived as a conflict.

•

Among Canada’s top 100 public companies, about 4 per cent of new board hires are former politicians or senior public servants.

THE ACADEMIC VIEW Academic research suggests that having an expolitician on the board of directors can improve a company’s market performance. In a 2005 study called “Politicians on the Board of Directors: Do Connections Affect the Bottom Line?,” Amy Hillman of Arizona State University examined 300 U.S. firms, half of which were in regulated industries. Her findings showed that companies with politicians on the board performed better, at least when it came to their market value. (The links to financial performance were not as strong.) Companies in regulated industries saw the most gain from having ex-politicians on board. In follow-up research she co-wrote in 2008, Hillman looked at the careers of 236 former politicians in the United States and found they were most in demand for board work soon after they left office. They were also more likely to get on a board if they had senior governmental experience, and if they were from the same party that was still in power. A former politician’s attractiveness as a board candidate depreciated quickly after he or she left office, the study showed. Again, the research looked only at the American experience, and Hillman acknowledged that the results can’t be directly extrapolated to other countries where political structures are different. - RB

MARCH/APRIL 2019

ICD EVENTS

SIMON AVERY

PHOTOS: PAUL DALY

Man with a plan At the ICD’s third Premiers Series event, Newfoundland and Labrador Premier DWIGHT BALL sat down with CEO RAHUL BHARDWAJ and members of the local provincial chapter to discuss the characteristics of strong leadership, the power of government agency boards and the importance of innovation to the local economy Leading the government of Newfoundland and Labrador carries extraordinary challenges for a Canadian premier. The region has struggled to achieve any population growth since the collapse of the cod fishery more than a quarter century ago. It has the lowest population density of any Canadian province,

18 DIRECTOR DIRECTORJOURNAL JOURNAL

making services more expensive to deliver than in other regions of the country. For years, per capita government spending has been higher in Newfoundland and Labrador than in any other province, which has translated into the highest debt per capita in the country as well. The economic and demographic challenges that confront Newfoundland and Labrador might seem daunting to some, but the province’s plight does not intimidate Premier Dwight Ball, whose Liberal government swept to power in 2015 after 12 years of Progressive Conservative rule. “I love my job,” he told members of the Institute of Corporate Directors’ provincial chapter in St. John’s on Feb. 4. “It’s not for everyone. I’m not here to talk anyone into politics. But if you really want to contribute where decisions are made, it’s only when you get inside and sit in those chairs that you can effectively do that. It’s extremely rewarding. We are setting the foundation for a very good future for this province.”

ICD EVENTS

SEEKING TALENT One of the first acts of the Ball government has been an effort to reduce political patronage in appointments to the province’s agencies, boards and commissions, through the creation of the Independent Appointments Commission. Led by Clyde Wells, a former premier and chief justice of the province, the IAC has brought greater rigour to the selection process and opened up board opportunities to a broader group of candidates. “We are getting better people, which should create better decisions when we handle your money,” Ball said. The government of Newfoundland and Labrador relies heavily on its agencies, boards and commissions; in fact, 85 per cent of spending flows from the decisions of these organizations, which makes their successful leadership and oversight extremely important to the province, he said. At the moment, about 42 per cent of the applicants seeking an appointment are women, but the Premier says he would like to see even greater diversity, including gender and regional balance, to ensure the right decisions are made, he said in a personal appeal for ICD members to become involved. “If you volunteer for a board, make sure you prepare, because your decisions will affect lives,” he said.

EMPLOYING BUSINESS STRATEGIES Trained as a pharmacist, Ball is a former president of the Canadian Pharmacists’ Association and was a successful small business owner, real estate developer and venture capitalist before entering politics.

He has also served as a board member of the Deer Lake Regional Airport Authority, the Western Regional Hospital Foundation, and the Deer Lake and Area Food Bank. He says his varied business experience taught him the importance of setting goals, building a strong support team, and relying on actual measurements and data to make policy. Ball’s plan for the province involves achieving a balanced budget in seven years. Initially, the government attempted to get a handle on the province’s financial crisis by raising taxes and cutting spending, but the pushback was fierce. These days, the Premier talks instead about maximizing the potential of the province’s assets through new partnerships, technology and innovation. “We looked where our strengths are, sector by sector and region by region, [to] change the future of our province,” he said. “There’s no industry in our province that cannot use innovation and technology to make improvements.” Last summer, the National Post ran a feature on the province’s economic woes, asking “Is Newfoundland and Labrador heading for bankruptcy?” But things are starting to look up. In December, the Conference Board of Canada forecast that Newfoundland and Labrador will lead the country in economic growth next year. Higher prices for oil and iron ore will generate additional revenue for the government. Operations at the Hebron offshore oil platform, and a resumption of more normal output at the Hibernia platform after a temporary shutdown, will fuel real gross domestic product growth of 5.2 per cent in 2019, the Conference Board said. That would mark a dramatic turnaround from 2018, when the province’s economy declined by 0.4 per cent. “When you put a plan in place, put measurements in place and are willing

to use them, this is what success is about,” Ball said. He spoke of his government’s success in supporting the mining, offshore oil and aquaculture sectors. He also talked about the need to work closely with Quebec on some new development projects, taking a progressive stance on a relationship that has suffered for years from a dispute over the hydroelectric project at Churchill Falls. Through a mix of short-term efforts, such as raising the province’s HST rate by 2 per cent in 2016, and long-term planning, such as working with Quebec so Newfoundland and Labrador can get its iron ore to market more efficiently, Ball is hoping to put his province on firmer footing. “First, we knew we had to stabilize the province. It took almost a year to do. Some of the actions we are putting in place today reach out to 2030,” he said. “I’ve learned to make sure to use information you have, and not to be afraid to go into unchartered waters.” As he described the mix of business and political approaches he is using as Premier, he was asked how his approach to risk mitigation may have changed as an elected official. When a company takes a risk, he explained, it measures it and takes steps to minimize it. If the decision proves wrong, the business will feel it. But when a government incurs risk and gets it wrong, the fallout can be even greater. “If you lose, you feel it. There’s not a huge appetite for political risk. You make that one mistake and suddenly you can’t do what you want to do any more,” he said. “It’s taxpayer money and we have to be accountable. If we get it wrong, it impacts more people. [Politics] is much more complicated than I thought it would be.” SIMON AVERY is the editor of Director Journal and a freelance business writer. MARCH/APRIL 2019

GUEST COLUMN

The board’s role in curbing populism PETER DEY, a seasoned director and leading thinker on corporate governance, argues that in determining what lies in the best interest of a corporation, a board should make its decisions with an eye to restraining the growth of populism

On the 10th anniversary of the BCE decision, there has been a great deal of talk about directors’ duties. In the decision, the Supreme Court of Canada removed any ambiguity as to whom directors owe their duties and held that directors must act in the best interests of the corporation. Until the release of the decision, there was always a discussion about whether the board’s duty was to the corporation or to the shareholders. The discussion was often resolved with the conclusion that if the action of the board created shareholder value, it must be in the interests of the corporation.   With the BCE decision the board is obligated to understand the interests of the corporation. To understand the interests of the corporation, the board now makes a point of identifying the stakeholders of the corporation and how the stakeholders are connected or relate to the corporation. Is the stakeholder a lender, an investor, a customer, an employee and so on? Then the board takes into account the implications of its actions on the stakeholders, including of course, the shareholders. The board action is not a mechanical exercise where the impact of the board’s decision on each class of stakeholders is systematically calculated. While the board will have extensive quantitative analysis in front of it, most boards will have a sense of what is right 20

DIRECTOR JOURNAL

and will customize the terms of the board’s decision to what it believes best serves the interests of the corporation. But since the BCE decision, the broader environment for carrying on business has changed. We are living in the age of populism and the corporate sector is a significant contributor to the rise of political parties on the right and left that claim to represent the interests of ordinary people against the elite. In executing corporate strategies, in addition to taking into account the impact upon stakeholders, boards must also be sensitive to the implications beyond the corporation. This is part of the corporation's responsibility to be a good citizen, a good member of the community. What is the focus of the community? Is it jobs? Is it training? Is it climate change? Is it the environment? Global corporations that operate in a variety of communities need to tailor their strategies to reflect the issues of particular communities. Can a mining company that determines that a mine is not economically viable simply shut down the mine and move to more profitable operations, leaving its employees with shattered expectations? The answer is obvious: No. Populists are people who feel ignored, disenfranchised by our current institutions. They believe anything is

better than the present. Corporations have to decide in what sort of a world they want to carry on business? The current administration in Washington has taken initiatives that have forced all members of the community to reflect on this question. Do we want to live in a nationalist community that puts our interests first or do we want to live in a community that is more inclusive? The corporate sector generally believes that populism is bad for business because populists are often nationalists and argue against global economic efficiencies. But corporations should only be allowed to pursue these efficiencies if they manage the human cost effectively. Populism has no place in the global world. Boards of directors have a responsibility when making decisions to condition the terms of their decisions to minimize the growth of populism.  Anticipating decisions that could contribute to the ascent of populism requires a long-term perspective in the development of a corporation’s business. Smart boards have learned that managing the business for the long term serves the interests of the corporation better than managing the business in the short term. Populism is a political movement with a very short-term vision. If boards are doing their job, they will think and act in the long term and thereby limit the potential for increasing the influence of populists in our social and political systems.

PETER DEY is chair of Paradigm Capital Inc. and a director of Gran Tierra Energy Inc. Previously, he served on the boards of Granite REIT, Goldcorp Inc., Caracal Energy Inc. and as chair of Addax Petroleum Corp. He is a former chair of the Ontario Securities Commission and the author of “Where Were the Directors?” also known as the Dey report.

P O L I C Y U P D AT E

Proclaiming cultural values isn’t enough I was struck by a recent news item reporting the sudden resignations by all staff at three Ohio-area Sonic Drive-In fast-food franchises. The most tangible reason was a cut in hourly wages, but a note left by staff made it clear that low pay was simply an outcome of a much deeper cultural rot that had taken hold. Employees said – in a colourful and profanity-laced note taped to one of the restaurant’s windows – that they had been mistreated and they’d had enough. Sonic is owned by Inspire Brands Inc., which also operates brands such as Arby’s and Buffalo Wild Wings. Like almost all organizations, Inspire has a cultural values statement on its website, and one of its pillars is that the restaurants will be “Good Citizens” by virtue of “elevating each other and the communities [they] serve.” Clearly, employees at these franchises did not feel elevated. It is interesting to consider this situation through the lens of an MIT economics study, “The Value of Corporate Culture,” released a few years ago. The paper argues that “proclaimed values appear irrelevant,” and explains why that’s the case: “Since the cost of claiming on the Web values such as integrity or care of the environment is close to zero, most firms will do it, regardless of the actual set of values present in the organization.” To be sure, fostering a positive culture across an organization is hard. The problem for leaders, though, is that critical stakeholders – namely, employees – frequently join an

organization with the belief that such a positive culture exists. When it does not, confidence is corroded. The lesson for directors is clear: If employees are unhappy or leave, a firm’s value risks being eroded and the long-term viability of the organization is threatened. But the MIT paper shows another finding, which is vastly more important to boards: “Integrity is positively correlated with financial performance and attractiveness of job offerings.” Integrity is not simply a word to post on a company’s “About us” web page. It is a consistent manner of conducting business and treating stakeholders. It permeates a good organization’s culture and is a long-term (and never-ending) project. Increasingly, the oversight of a culture that breeds integrity is also recognized as a board priority. To this end, the ICD has focused over the past number of months on the role that directors play in fostering positive culture. Beginning with our Board Oversight of Harassment course, which launched last year in the wake of the #MeToo movement, we have made a commitment to learning outstanding culture oversight practices from many of Canada’s most experienced directors and reflecting these lessons back to our members. We also launched last month a Directors’ Dilemma series focused on the board’s role in overseeing culture. These sessions, co-hosted by our local chapters, use a fictional case study developed by the ICD to help attendees determine the best methods

MATTHEW FORTIER

ICD’S VICE-PRESIDENT OF POLICY

of understanding and enabling good organizational culture. Finally, in the spring, we will be hosting facilitated round tables of senior directors across the country to flesh out guiding principles for boards in this area. Directors seeking to serve organizations that live up to the cultural values stated on their websites need to be active and engaged. Anything less and employees are liable to remind you – perhaps in a very public way – that the experience on the job doesn’t quite line up to the values expressed online. MARCH/APRIL 2019

ICD EVENTS

PHOTOS: J.P. MOCZULSKI

Managing geopolitical risk

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Around the world, including among some of Canadaâ&#x20AC;&#x2122;s closest trading partners, governments are increasingly driving nationalist agendas, free trade is under pressure, and regulatory affairs are growing unstable and unpredictable. Even within Canada, provincial borders are becoming more relevant to corporate strategies. Whether companies are facing disrupted international supply chains or sudden shifts in local regulatory regimes, directors play an important role in helping their organizations monitor, understand and plan their responses to these evolving risks. On Jan. 16, at the National Club in Toronto, the ICDâ&#x20AC;&#x2122;s Ontario chapter hosted a discussion, summarized here, with two highly experienced corporate directors who shared some of their experiences dealing with geopolitical risk.

ICD EVENTS

THE PANELISTS David Denison, OC, currently serves on the boards of Royal Bank of Canada and BCE Inc., and until recently served as the chair of Hydro One, Ontario’s electricity provider controlled by the provincial government. He is a member of the investment board and international advisory committee of GIC (formerly known as Government of Singapore Investment Corp.), the international advisory council of the China Investment Corp., and is co-chair of the University of Toronto’s investment committee. He previously served as president and CEO of the Canada Pension Plan Investment Board. Anne Giardini, OC, is a corporate director and chancellor of Simon Fraser University. Previously she held senior positions at Weyerhaeuser Co. Ltd., including president of Canadian operations. She serves on the boards of Hydro One, Nevsun Resources Ltd., Canada Mortgage and Housing Corp., World Wildlife Fund (Canada), the British Columbia Achievement Foundation, TransLink and the Greater Vancouver Board of Trade. Her previous directorships include Thompson Creek Metals Co. Inc. and Weyerhaeuser Co. Ltd.

MODERATOR Rahul Bhardwaj, ICD.D, is president and CEO of the Institute of Corporate Directors. He serves on the boards of Metrolinx, the Rideau Hall Foundation and Community Foundations of Canada (past chair). He was chair of the 2012 Ontario Summer Games and co-chair of TO2015 IGNITE, and is a past chair of the Toronto Downtown Jazz Festival. His previous directorships include Upper Canada College, George Brown College, the Stratford Festival (Canada) and United Way Toronto. Prior to joining the ICD, he was president and CEO of

What do boards need to be thinking about in what could prove to be a volatile year? One of the board’s most important overall responsibilities is to oversee their organization’s risk-management framework. Humility is necessary when determining strategy and how to get there. When boards are accessible and engaged, it should be possible for them to identify and avert most political risk. Execution of strategy should take into account the inevitable tradeoffs associated with managing risks. For example, Apple has been criticized for having a supply chain in China. But the company no doubt weighed the benefit of greater efficiency and lower costs with the political risks it incurred with its China move. The strategy has proved profitable; it was a good decision. Boards should ensure that they have the right skills among their members. Directors who have experience in multiple jurisdictions and an awareness of how countries and different political systems can operate are extremely valuable. Find directors who know the jurisdictions in which the company does business and who can ask the questions that matter, such as “How do we get people out of the country when something goes wrong politically?” Boards should be assessing geopolitical risk before their organizations move into new countries. Is geopolitical just another flavour of risk, or is this something different that warrants special attention from the board? Boards should look beyond the headlines and ask “Is geopolitical risk actually a critical risk for my company? What is the relevance of it to us?”

In some cases, companies use another term for geopolitical risk, such as regulatory risk, which has subcomponents to it that go beyond dealing with the regulator and actually crosses into politics. Is there something new to geopolitical risk today than we’ve seen in previous years? The global financial crisis was one of the events that prompted change and heightened geopolitical risk, including opening the way for populism. One of the real concerns for corporate directors is that populists don’t stick to the norms of how to resolve issues, nor do they respect prior decisions and the continuity that is expected. The results can be difficult for boards to navigate. In place of the former global model in which boards operated, today we have a nationalist model that’s fundamentally different. The environment has become dramatically confrontational and controversial. The uncertainty it creates hurts our ability to make long-term decisions and makes directors more cautious, which in turn has a real cost to companies and to the economy. Will geopolitical risk improve or get worse in the next two to five years? Trust is being eroded in all institutions, apart from non-government organizations and universities, climate change is adding pressure to governments and businesses, Brexit looms large over Europe and beyond, relations between China and the United States are volatile. The journey is going to be pretty rocky over the next couple of years.

the Toronto Foundation. MARCH/APRIL 2019

ICD NATIONAL COURSE AND CHAPTER EVENT GUIDE

DIRECTOR EDUCATION: BUILDING CONFIDENCE AND OPTIMIZING BOARD PERFORMANCE ICD-ROTMAN DIRECTORS EDUCATION PROGRAM

Canada’s leading program for DIRECTORS. The Directors Education Program (DEP), jointly developed by the Institute of Corporate Directors and the University of Toronto’s Rotman School of Management is offered nationally at Canada’s top business schools. Since the launch of the DEP, over 5,500 directors have completed the program, taking the first step towards acquiring their ICD.D designation. TO APPLY OR TO VIEW ALL AVAILABLE OFFERINGS ACROSS THE COUNTRY, VISIT ICD.CA/DEP

CITY

PROGRAM START DATES

APPLICATION DEADLINE

Calgary

October 24 -26, 2019

August 28, 2019

Edmonton

December 13 -15, 2019

October 17, 2019

Ottawa

June 16 -18, 2019

March 21, 2019

Saskatchewan

September 27- 29, 2019

June 27, 2019

St. John’s

September 16 -18, 2019

June 17, 2019

Toronto

May 31- June 2, 2019

April 15, 2019

Vancouver

October 28-30, 2019

August 29, 2019

Winnipeg

September 8-10, 2019

June 28, 2019

Jointly developed by:

ICD-ROTMAN NFP GOVERNANCE ESSENTIALS PROGRAM

Better serve your not-for-profit organization. AND ITS MISSION. The NFP Governance Essentials Program (NFP Program), jointly developed by ICD and the University of Toronto’s Rotman School of Management, is an intensive program focused on key accountabilities and responsibilities for not-for-profit directors through extensive use of team-based learning. TO APPLY OR TO VIEW ALL AVAILABLE OFFERINGS ACROSS THE COUNTRY, VISIT ICD.CA/NFP

CITY

PROGRAM DATES

APPLICATION DEADLINE

Toronto

May 28-29, 2019

Accepting Waitlist Applications

Vancouver

May 13 - 14, 2019

April 11, 2019

Winnipeg

April 1- 2, 2019

Call to Inquire

The NFP Program is supported by the RBC Foundation. A limited number of full scholarships valued at $2,500 are available for each offering. Supported by:

Jointly developed by:

ICD NATIONAL SHORT COURSES

Optimize your performance

IN THE BOARDROOM. The ICD’s national short courses provide directors with subject-specific learning opportunities from the director’s perspective. Developed and delivered by seasoned directors with the support of other subject matter experts and directors-in-residence, the courses reflect and are enriched by extensive, hands-on, real-life boardroom experiences.

BOARD SHAREHOLDER ENGAGEMENT (BSE) This course is ideal for directors of publicly traded companies, institutional investors and those interested in enhancing and improving their governance, communications and engagement practices between the Board and shareholders. It will provide participants with the strategies, ideas and practical tools for engaging shareholders, activists, and potential investors to enhance dialogue, better manage risk and maximize corporate value. CITY

PROGRAM DATE

APPLICATION DEADLINE

LEAD INSTRUCTOR

Calgary Toronto

April 25, 2019 April 11, 2019

March 28, 2019 March 28, 2019

Ian Bourne, F.ICD *Developed in partnership with CCGG

FOR MORE INFORMATION OR TO APPLY, VISIT ICD.CA/BSE

NEW

BOARD OVERSIGHT OF HARASSMENT (BOH) Board Oversight of Harassment will provide directors with detailed, practical information and guidance on how to protect their organizations through improved oversight of harassment and workplace misconduct claims. It will examine from the director’s perspective the role and obligations of the board, the importance of character and leadership, director and officer liability protections and the internal investigation process. CITY

PROGRAM DATE

APPLICATION DEADLINE

LEAD INSTRUCTOR

Montreal

May 21, 2019

April 29, 2019

Martha Hall Findlay, ICD.D

FOR MORE INFORMATION OR TO APPLY, VISIT ICD.CA/BOH

THE DIGITAL DIRECTOR: CYBERSECURITY AND SOCIAL MEDIA FOR DIRECTORS (DDR) Oversight of cybersecurity, digital and social media is one of the most complex and rapidly evolving board mandates. The nuances of this responsibility have led to unique challenges for boards of all sectors. As a director, how do you ensure you’re abreast of the latest developments and that you’re providing value to your organization? The Digital Director will equip you with the knowledge, tools and confidence to contribute effectively to boardroom discussions and decision making. CITY Toronto

PROGRAM DATE May 9, 2019

APPLICATION DEADLINE

LEAD INSTRUCTORS

April 11, 2019

Estelle Métayer Michael Parent, MBA, Ph.D., ICD.D

FOR MORE INFORMATION OR TO APPLY, VISIT ICD.CA/DDR

LIMITED SEATING. CONTACT THE ICD AND APPLY TODAY. 1.877.593.7741 x228 | education@icd.ca | icd.ca

BOARDROOM FINANCIAL ESSENTIALS (BFE) This course is designed to help directors become more comfortable with financial discussions around the board table. An immersive, hands-on case study places participants into a simulated board meeting of a company where they delve into linking financial plans and strategic plans, and connecting strategy, executive compensation, and risk oversight with capital projects and expenditures. CITY

PROGRAM DATE

APPLICATION DEADLINE

LEAD INSTRUCTOR

Calgary

April 18, 2019

Accepting Waitlist Applications

Axel Thesberg, FCPA, FCA

FOR MORE INFORMATION OR TO APPLY, VISIT ICD.CA/BFE

BOARD OVERSIGHT OF STRATEGY (STRATEGY) This course will help directors successfully engage in the strategic oversight process. Developed in partnership with CPA Canada and based on CPA Canada’s Overseeing Strategy: A Framework for Boards of Directors, participants will learn how to apply the four-phase framework, when to get involved and how to effectively participate in board oversight activities in different situations and business environments. CITY Halifax Montreal Saskatoon

PROGRAM DATE June 21, 2019 April 17, 2019 April 8, 2019

APPLICATION DEADLINE May 24, 2019 March 20, 2019 March 11, 2019

FOR MORE INFORMATION OR TO APPLY, VISIT ICD.CA/STRATEGY

LEAD INSTRUCTOR Ken Smith, Ph.D., MBA, ICD.D *Developed in collaboration with CPA Canada.

CROWN DIRECTOR EFFECTIVENESS (CROWN) In this course, directors and senior public servants are introduced to the unique circumstances and challenges that often exist when serving on government controlled entities. It examines strategies, best practices and approaches that directors can take when interacting with government shareholders, multiple stakeholders, ministers and the bureaucracy, and political reactions. CITY

PROGRAM DATE

APPLICATION DEADLINE

LEAD INSTRUCTOR

Ottawa Saskatoon Winnipeg

April 30, 2019 May 7, 2019 May 1, 2019

April 2, 2019 April 9, 2019 April 3, 2019

Richard Dicerni, CM, ICD.D

FOR MORE INFORMATION OR TO APPLY, VISIT ICD.CA/CROWN

HR & COMPENSATION COMMITTEE EFFECTIVENESS (HRCCE) HRCCE was created to help directors develop deeper insights into issues such as CEO succession planning, executive compensation and incentive plans, human capital development beyond the CEO, and dealing with increased scrutiny of executive compensation plans by activist shareholders and proxy advisors. CITY

PROGRAM DATE

APPLICATION DEADLINE

LEAD INSTRUCTORS

Calgary Ottawa Toronto Vancouver

May 23, 2019 May 15, 2019 May 13, 2019 May 21, 2019

April 25, 2019 April 17, 2019 April 15, 2019 April 23, 2019

Carol Stephenson, O.C. Georges A. Soaré, ICD.D Scott Munn

FOR MORE INFORMATION OR TO APPLY, VISIT ICD.CA/HRCCE

CHAPTER EVENTS ACROSS CANADA

BRITISH COLUMBIA Visit www.icd.ca/BC

EDMONTON Visit www.icd.ca/Edmonton

CRYSTAL BOARDS: HOW DO BOARDS MAKE THE RIGHT DECISIONS WHEN THE FUTURE IS UNCERTAIN? Tuesday, March 5, 2019 Vancouver

DIRECTORS’ DILEMMA SERIES: A CULTURE OF BULLYING AND INTIMIDATION & THE BOARD’S ROLE Tuesday, April 2, 2019 Edmonton

CYBERSECURITY - SMALL AND MIDSIZED ORGANIZATION FOCUS Tuesday, April 9, 2019 Vancouver

MANITOBA Visit www.icd.ca/Manitoba WHO MANAGES RISK? Wednesday, March 20, 2019 Winnipeg

NFP CHAIR PEER GROUP FORUMS – FORUM # 2 GTA WEST SERIES Tuesday, April 30, 2019 Mississauga

OTTAWA Visit www.icd.ca/Ottawa GROWTH BY ACQUISITION FROM A BOARD PERSPECTIVE Wednesday, March 20, 2019 Ottawa

CRITICAL BOARD LEVEL POLICIES Wednesday, April 17, 2019 Winnipeg

BUSINESS STRATEGY IN THE AGE OF UNCERTAINTY: THE ROLE OF THE BOARD OF DIRECTORS Tuesday, April 16, 2019 Ottawa

WHAT DOES ARM’S LENGTH REALLY MEAN? Wednesday, May 15, 2019 Winnipeg

CHARACTERISTICS OF AN EVOLVING WORKFORCE Tuesday, May 21, 2019 Ottawa

MARITIME Visit www.icd.ca/Maritime

QUEBEC Visit www.icd.ca/Quebec

MEMBER RECEPTION Wednesday, May 22, 2019 Kelowna

NOSES-IN-FINGERS OUT Tuesday, April 23, 2019 Halifax

TALENT SHORTAGE: BOARD UNDER PRESSURE! Thursday, April 4, 2019 Montreal

CALGARY Visit www.icd.ca/Calgary

NEWFOUNDLAND & LABRADOR Visit www.icd.ca/NL

TALENT SHORTAGE: BOARD UNDER PRESSURE! Tuesday, April 9, 2019 Montreal

EFFECTIVE BOARDS | STRATEGY FOR SMALL CAPITAL COMPANIES, NPOS AND CROWN CORPS Thursday, April 11, 2019 Victoria PURPOSE VERSUS PROFIT Wednesday, May 8, 2019 Vancouver MEMBER RECEPTION Tuesday, May 21, 2019 Vancouver

HIGH PERFORMING BOARDS - NEXT GENERATION OF DIRECTORS Wednesday, April 10, 2019 Calgary BUSINESS TRANSFORMATION/ CYBER IMPACT Wednesday, May 8, 2019 Calgary YEAR END Wednesday, June 12, 2019 Calgary

ONTARIO Visit www.icd.ca/Ontario CULTURE IN THE BOARDROOM Tuesday, March 19, 2019 Toronto THE BOARD’S ROLE IN DEVELOPING A RESILIENT CORPORATE CULTURE Wednesday, April 17, 2019 Toronto THE BOARD’S ROLE IN FUNDRAISING IN THE NFP SECTOR Thursday, April 25, 2019 Mississauga

Visit icd.ca/Events to register for these and many more chapter events near you. Contact the ICD to learn more. 1.877.593.7741 x250 | info@icd.ca | icd.ca

THE BOARD OF DIRECTORS IN THE DIGITAL AGE Thursday, May 2, 2019 Montreal

SASKATCHEWAN Visit www.icd.ca/Saskatchewan

SOUTHWESTERN ONTARIO Visit www.icd.ca/SWO BLOCKCHAIN 2.0 Tuesday, March 5, 2019 London

IN PROFILE

PHOTOS: J.P. MOCZULSKI

DIRECTOR JOURNAL

IN PROFILE

Canada’s audit watchdog readies itself for a new world By Colin Ellis

From cryptocurrencies to cybersecurity, from blockchains to machine learning to artificial intelligence (AI), and from new accounting standards to new reporting frameworks, Canadian companies and their corporate directors are contending with a whole new world of business. How will auditors and audit committees adjust to the new reality, and what is Canada’s audit watchdog doing about it? The Canadian Public Accountability Board (CPAB) has just released its strategic plan for the next three years, and the organization’s new CEO is positioning CPAB to meet the challenges of the digital age. “We don’t want to rely on a black box [that gathers data and makes decisions]; we have to inspect the black box,” says Carol Paradine, referring to the challenges posed by audits driven by artificial intelligence. The black-box metaphor can also apply to CPAB: both exist to record performance and to influence best behaviour. As the nation’s audit regulator, CPAB ensures that public accounting firms are performing trustworthy audits of public companies across Canada. One year into her mandate, Paradine continues to prepare the organization for a world vastly more influenced by technology. On the ninth floor of Adelaide Place on York Street in Toronto, she has taken possession of the corner office once occupied by Brian Hunt, an outsized figure in the history of the audit industry. Hunt served as a founding director of CPAB before leading the regulator as CEO from 2009 to 2018. “Brian left the organization in great shape and is still available to me,” Paradine says. “We meet on a monthly basis, so it has made for a very, in my perspective, smooth succession.” Hunt was equal parts jocular and serious; Paradine is reserved, poised and quietly confident. “I’m coming [in] as an analytical person, an accountant,” she says, but “a good portion of my career was spent with people and in talent roles. The last few years, I was responsible for leadership development and succession.” MARCH/APRIL 2019

IN PROFILE

On a mission Originally from Ottawa, where she attended Carleton University, Paradine earned her chartered accountant designation in 1989 and joined accounting firm Touche Ross (now Deloitte). Rotating to the Winnipeg office, she became a fixture of the Manitoba business and charitable sectors, including serving as chair of the Manitoba Chambers of Commerce and president of the Alzheimer Society of Manitoba. Ultimately, she was appointed managing partner for Deloitte’s Prairie region, acting chief financial officer, and managing partner of leadership development and succession, spending part of her time in Toronto. It’s not surprising to learn that Paradine coached sports at the youth level as well as university business competitions; it’s easy to picture her inspiring her team and blowing the whistle. As a former audit partner, Paradine knows what it’s like to be inspected by CPAB and by its U.S. counterpart, the Public Company Accounting Oversight Board (PCAOB). “I went through the fear that audit partners have of [them] critiquing your work. I think, over time, we became used to being regulated,” she says. “It was a normal environment; you understood what needed to be done. “But there’s still certainly ramifications for audit partners if their quality on financial reviews is not strong. There could 30

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be financial penalties, [it could have an impact] on their compensation, because it’s most often directly linked to the auditquality scores.” She took the CPAB position because “the opportunity doesn’t come very often to influence the audit-quality agenda at a higher level. I thought it was intriguing. I also was very impressed with our board of directors.” She credits Hunt with preparing CPAB for the personnel changes that must come if the regulator is to meet the challenges of audit inspection in the digital age. “Brian and the team had started that journey at least a year before I joined,” says Paradine, “in terms of looking at a different set of skills to bring to the table and probably different attributes in terms of personnel. “We’ve hired a few people with internal-audit backgrounds, [and] significant corporate experience along the way, whereas in the past, there would have been a greater tendency to take those who had a lot of technical inspection or audit experience.” Paradine embarked on a listening tour in her first 100 days. In addition to meeting with the provincial securities commissions and the Office of the Superintendent of Financial Institutions, she met with more than 60 chairs of audit committees, both large and small, from many sectors and provinces, “to get an understanding of what is top of mind.” That involved discussing and sharing best practices, and conferring on the future direction of auditing, she says.

IN PROFILE

Digital challenges What she heard was a litany of challenges, from the complexities of new accounting standards, such as fairvalue measurements and the degree of estimation required, to the reporting of “key audit matters” in the new auditor report, to the implementation of nonGAAP reporting compliance. (GAAP stands for generally accepted accounting principles. Non-GAAP reporting has come under fire by some investors and regulators for allowing companies to customize measures to present rosier financial results.) Cybersecurity was also a common thread in the discussions, says Paradine, because, in many organizations, the mandate of the audit committee includes enterprise risk assessment. That includes the level of digital technology used in today’s audits. “It can be extremely efficient for an auditor to go into an organization and extract a hundred per cent of the financial data

and perform analysis on it,” Paradine says. “At the same time, depending on where you’ve extracted that to, where it’s being saved, how you’re analyzing it, who is analyzing it – that could pose another point-of-entry risk.” Audit committees want to be “educated,” she adds, as to what today’s firms are doing to protect their data. The degree to which the firms are developing software tools that rely on AI and machine learning will pose a challenge not just to audit committees but to CPAB. “Our concern is more the tool that’s being utilized to support the audit,” explains Paradine. “The programming has risks associated with it but, as we’ve seen in the automotive industry when it came to emissions, you have the potential risk that somebody has manipulated it.” In the past, CPAB inspectors questioned human auditors about judgments; in the future, a “black box” might select the metrics. Paradine says that CPAB will have to rely on a retainer or contractor system for some digital inspections, especially in cases that require inspections of blockchain-related audits, which are even now being deployed at a public company level. “In our organization, we have 50 people here, so we have to collaborate with organizations such as the PCAOB, which has an 850-member staff, and other international ones to effectively regulate an environment of increased use. “Don’t get me wrong,” she adds quickly, speaking to the growing use of automation in audits. “There’s a challenge but there’s a huge opportunity here for a more effective audit to be performed. I don’t want to be overly negative. I would definitely see that it can be an enabler and it can increase the effectiveness of audits.”

Sustainable quality CPAB’s new strategic plan emphasizes emergent industries and the digital future of audits as well as the need to build the kind of culture and talent pool that will continue to ensure a high standard of quality in Canadian auditing. The regulator will also continue to engage with audit committees nationally to share best practices through a variety of resources, including both general and industry-specific forums, some in cooperation with the provincial arms of the Chartered Professional Accountants of Canada (CPA Canada). It will also continue to report to audit committees under the CPAB protocol, which includes the annual public report of common findings and recommendations across all inspections in a given year, as well as significant findings specific to a reporting issuer’s audit file inspection. “That means that after we’ve completed an inspection of a particular reporting issuer, they will receive a letter that explains what, if any, significant findings were found on our part,” Paradine says. Looking forward, “it really is about how do we create sustainable, long-term audit quality?” says Paradine. “We’ve got a number of industries that we can make analogies to — everything from manufacturing to airlines — where what we call the rate of deficiencies is very low. How do we ensure that in the auditing industry that occurs as well?” The black box has been a key driver of quality in other industries; perhaps, in the emerging new world of Canadian business, it will be the key to audit quality as well. COLIN ELLIS is the managing editor of Canadian Accountant.

MARCH/APRIL 2019

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DU BUREAU DU PRÉSIDENT

Élargir nos compétences Jetez un coup d’œil à n’importe quelle grande organisation de ce pays et il y a de fortes chances que ses administrateurs obtiennent des résultats très élevés en intelligence cognitive et en intelligence émotionnelle (les abréviations conventionnelles étant respectivement QI et QE). Mais qu’en est-il du QP? Alors qu’on attend de nous un QI et un QE élevés, notre « quotient d’intelligence politique » est généralement négligé. Mais aujourd’hui plus que jamais, il est devenu essentiel pour les conseils de bien comprendre les processus gouvernementaux – en particulier ceux qui supervisent des organisations évoluant dans des secteurs réglementés comme les services financiers, l’énergie et les technologies. L’importance de l’intelligence politique s’est imposée à moi lors d’un récent voyage en Grande-Bretagne. À la veille du divorce planifié de ce pays d’avec l’Union européenne, beaucoup d’entreprises essaient tant bien que mal de se faire une idée du paysage politique et de tracer une direction stable en vue de l’année qui vient et au-delà. En février, j’ai eu le plaisir d’animer une discussion entre le premier ministre Dwight Ball de Terre-Neuve et Labrador et des membres de la section régionale de St. John’s. La discussion portait sur une variété d’enjeux pertinents pour la communauté d’affaires locale. Il s’agissait du troisième événement de la Série des premiers ministres provinciaux. Les séances précédentes avaient accueilli le

premier ministre de Nouvelle-Écosse Stephen McNeil à Halifax et celui du Manitoba Brian Pallister à Winnipeg. À l’IAS, nous souhaitons que des initiatives comme la Série des premiers ministres provinciaux contribuent à l’augmentation de l’intelligence politique dans les conseils à travers le Canada. Les discussions sont franches et bilatérales, leur objectif étant d’améliorer la compréhension du paysage politique par les conseils et de renforcer les liens entre les gouvernements et les administrateurs des grandes organisations canadiennes. Le prochain événement de la Série des premiers ministres aura lieu le 8 mai à Fredericton, lorsque la section régionale des Maritimes accueillera le premier ministre du Nouveau-Brunswick Blaine Higgs, anciennement ministre des Finances et dirigeant d’Irving Oil. L’IAS élabore également des moyens d’améliorer les connaissances des administrateurs dans d’autres domaines. Parmi ces initiatives, signalons la Série Dilemme des administrateurs, lancée en février dans le cadre d’un événement organisé par la région de York de la section de l’Ontario. Menés en partenariat avec le cabinet juridique Torys LLP, ces événements interactifs sont conçus pour s’attaquer à certains des défis les plus ambigus auxquels les conseils font face – ceux pour lesquels il n’y a pas de cases à cocher, où l’information définitive n’est pas nécessairement disponible et où une ligne de conduite

RAHUL BHARDWAJ LL.B, ICD.D

Président et chef de la direction, Institut des administrateurs de sociétés

distincte n’est pas claire. Ces rencontres sont structurées de telle sorte à donner aux membres l’occasion d’exercer leurs compétences d’administrateur. Agissant comme s’ils étaient membres d’un comité spécial du conseil d’une entreprise fictive, les participants sont invités à déterminer une ligne de conduite à partir d’un ensemble de faits issus d’une étude de cas. Les prochains événements de la Série Dilemme des administrateurs auront lieu bientôt à Edmonton et à St. John’s. J’invite nos membres à demeurer à l’affût de la présentation de ces événements et d’autres occasions d’apprentissage qui seront présentées par l’IAS à travers le pays dans les mois qui viennent.

MARCH/APRIL 2019

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QUEL EST LE DEGRÉ

D’INTELLIGENCE

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POLITIQUE DE VOTRE CONSEIL?

Dans des secteurs où la compréhension du processus gouvernemental et réglementaire est essentielle – banques, pétrole et gaz, technologies et même l’industrie naissante du cannabis – le recrutement d’anciens politiciens à la table du conseil peut s’avérer judicieux, écrit Richard Blackwell

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L’automne dernier, l’annonce d’une nomination de routine à un conseil d’administration a fait froncer quelques sourcils chez les leaders d’affaires au Canada. L’ancien premier ministre Brian Mulroney venait en effet d’être nommé administrateur de l’entreprise de cannabis new-yorkaise Acreage Holdings inc., rejoignant ainsi à la table du conseil d’autres ex-politiciens de renom, dont l’ancien président de la Chambre des représentants John Boehner et l’ancien gouverneur du Massachusetts William Weld. M. Mulroney représentait ainsi le plus récent ajout à une liste croissante d’anciens membres d’un gouvernement appelés à conseiller les entreprises de ce nouveau secteur d’activités. Quelques semaines auparavant, l’ancien président mexicain Vicente Fox était nommé administrateur de l’entreprise canadienne de cannabis thérapeutique Khiron Life Sciences Corp. L’ex-premier ministre de Colombie-Britannique Mike Harcourt et l’ancien premier ministre de l’Ontario Ernie Eves se sont aussi joints à des conseils d’entreprises de cannabis, tout comme les anciens ministres fédéraux Martin Cauchon et Julian Fantino. Dans un domaine d’affaires aussi controversé que le cannabis, les anciens politiciens ont conféré un certain sérieux à des entreprises récemment créées qui tentent de faire la preuve de leur légitimité. Mais ces personnes apportent aussi à la table du conseil une connaissance intime des leviers du gouvernement, ce qui est une compétence essentielle pour une industrie sujette à une réglementation qui évolue rapidement. L’idée de recruter d’anciens politiciens et hauts fonctionnaires au sein de conseils d’administration n’est pas nouvelle. Depuis des décennies, les gens dotés d’une expérience gouvernementale forment un bassin de 36

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candidats recherchés par les conseils d’entreprises ou d’organisations à but non lucratif. De nos jours, toutefois, on porte une attention croissante à l’expertise spécifique de chaque personne et à la manière dont un ex-politicien peut aider une organisation aux prises avec des disputes commerciales à l’échelle mondiale, des bouleversements comme le Brexit, des changements réglementaires tels que la légalisation du cannabis ou des enjeux fortement controversés comme la construction d’un pipeline. Et à une époque où il existe beaucoup de conseils de dimension réduite, où le contrôle de la gouvernance de sociétés est accru et où une attention particulière est exercée sur la grille de compétences des équipes d’administrateurs, l’ajout d’un expoliticien à un conseil doit être un geste stratégique calculé et les candidats doivent être choisis avec soin. « Ces dernières années, nous avons eu beaucoup de surprises : l’élection de Donald Trump, le Brexit, une relation changeante entre le Canada et la Chine, explique Anne McLellan, elle-même ancienne ministre fédérale qui siège aujourd’hui au conseil de plusieurs organisations à but lucratif et non lucratif. Il est utile pour les entreprises d’une certaine taille et d’un degré minimal de complexité de comprendre les processus gouvernementaux et la manière dont les élus et les fonctionnaires sont susceptibles de réagir à une situation donnée. » Les anciens politiciens ne seront pas nécessairement en mesure d’offrir une perspective sans faute sur les intentions des gouvernements ou une connaissance intime du processus de décision, ditelle, mais « ils ont une appréciation de ce qui se passe sans doute au sein du gouvernement à un moment précis, quels mécanismes s’activent et dans quelle direction ils pointent. »

« UN CANDIDAT NIRVANA » Une analyse menée par la firme de recherche de cadres Spencer Stuart montre qu’environ 15 des 370 administrateurs recrutés par 100 des plus importantes sociétés canadiennes inscrites en bourse au cours des 4 dernières années possédaient une expérience gouvernementale, soit environ 4 pour cent du total. Cette proportion n’a pas changé de façon significative au fil des ans, affirme Andrew MacDougall, chef de la pratique de recrutement d’administrateurs au Canada, mais les raisons pour lesquelles on recrute d’anciens politiciens ont changé. Dans le passé, les anciens politiciens étaient souvent considérés comme une source de prestige pour un conseil, ajoute-t-il. Aujourd’hui, ce sont leurs compétences qu’on recherche, en particulier chez les entreprises évoluant dans un environnement hautement réglementé ou celles qui mènent des activités à l’échelle internationale. Mais il n’y a pas que l’intelligence politique qui compte. « Quand on est à la recherche de compétences politiques, le candidat Nirvana est celui qui est entré dans l’administration publique à la suite d’une carrière dans le secteur privé, souligne M. MacDougall. Ceux-là sont difficiles à dénicher. » Le regretté Michael Wilson, qui est décédé en février, correspond parfaitement à cette description parce qu’il était cadre dans le secteur de l’investissement avant de devenir ministre fédéral des Finances et plus tard ambassadeur du Canada aux États-Unis. Brian Mulroney, qui était dirigeant d’entreprise avant de devenir premier ministre, possède aussi ce profil.

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CONFLITS D’INTÉRÊTS

Quand il s’agit de compétences gouvernementales, beaucoup de conseils recherchent, plutôt que des politiciens, des personnes ayant une expérience approfondie de la fonction publique, explique M. MacDougall. Les sousministres ou autres hauts fonctionnaires peuvent s’avérer efficaces au sein d’un conseil et offrent la valeur ajoutée de ne pas avoir d’attaches partisanes, comme c’est le cas des anciens politiciens. En Grande-Bretagne, les candidats les plus attractifs pour les conseils d’administration sont les anciens hauts fonctionnaires, affirme Virginia Bottomley qui préside le conseil et la pratique des chefs de la direction au bureau de Londres de la firme de recrutement de cadres Odgers Berndtson. « Il existe un appétit pour les gens qui comprennent comment fonctionne le gouvernement, mais aussi du scepticisme à l’égard des politiciens », explique Mme Bottomley, baronne et ancienne membre du Parlement britannique et ministre qui a siégé à de nombreux conseils d’administration. Les personnes les plus recherchées

sont les anciens fonctionnaires ou diplomates parce que ces gens « sont excellents en analyse géopolitique, comprennent l’économie et offrent une bonne vision de l’avenir. » Les anciens politiciens peuvent aussi être attractifs pour les entreprises, mais généralement c’est seulement dans la mesure où ils ont d’abord évolué dans l’univers commercial. Dans un monde aussi instable que le nôtre, il existe une demande croissante à l’endroit d’administrateurs ayant une connaissance du gouvernement et des affaires internationales, soutient Mme Bottomley. La plupart des conseils signalent que la planification des affaires et la prédiction de ce que réserve l’avenir sont très difficiles en raison des changements géopolitiques considérables qui se produisent, dit-elle. « À mesure que se déploie la politique internationale de Trump et que les effets du Brexit deviennent clairs, il y a un appétit de plus en plus marqué pour des personnes capables d’expliquer, d’articuler et de prédire – dans la mesure du possible – l’avenir. »

L’ancien premier ministre du Québec Jean Charest affirme qu’il a été recruté au conseil de Groupe Publicis, l’immense conglomérat parisien spécialisé en communications et marketing, parce qu’il avait besoin d’un administrateur d’expérience pouvant offrir une bonne connaissance de l’Amérique du Nord où se déroule la moitié de ses activités. « Ils recherchaient quelqu’un ayant une large perspective culturelle du monde (…) quelqu’un qui avait un ancrage solide en Amérique du Nord et une certaine connaissance intuitive de la manière dont l’environnement d’affaires nordaméricain fonctionne. » M. Charest explique que lorsqu’il était premier ministre, il a réalisé qu’il n’avait pas besoin de tout savoir, mais qu’il lui fallait développer la capacité de poser les bonnes questions sur chaque enjeu particulier. Cet instinct, né du jugement et de l’expérience, représente le même type de compétence dont a besoin un conseil d’administration, dit-il. La supervision d’une entreprise immense et complexe qui mène des activités dans de nombreuses régions du monde ne diffère essentiellement pas de la gestion d’un gouvernement aux ramifications complexes. « Ce n’est pas la même chose, convient l’ancien premier ministre, mais il y a beaucoup de ressemblance. L’expérience peut être très pertinente. » Bien sûr, des conflits d’intérêts peuvent survenir lorsqu’un ancien politicien se voit offrir un poste d’administrateur. M. Charest signale qu’il a déjà refusé de siéger au conseil d’une entreprise forestière parce que celle-ci aurait pu être appelée à prendre MARCH/APRIL 2019

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des décisions controversées sur ses activités au Québec. « Je ne pensais pas qu’il était dans mon intérêt ni dans celui de l’entreprise qu’un membre de son conseil puisse devenir une cible pour ceux et celles qui ne seraient pas d’accord avec ses décisions. » La décision d’accepter ou non un poste d’administrateur est une question de jugement pour un ancien politicien, dans la mesure où tous les obstacles juridiques ont été éliminés. Il doit décider si ses affiliations ou décisions passées sont susceptibles d’être perçues comme une source de conflit, explique M. Charest. « Et il ne faut pas oublier non plus qu’en matière d’éthique, les normes évoluent constamment. Des choses qui auraient paru acceptables il y a quinze ans ne le sont plus aujourd’hui. »

COMPRENDRE LE PAYSAGE Une autre première ministre provinciale, Christy Clark de la Colombie-Britannique, affirme que l’attribut le plus important qu’un politicien peut apporter à un conseil n’est pas nécessairement une connaissance d’initié, mais bien ses compétences stratégiques dans des situations complexes. « Le principal atout d’un politicien est une compréhension de la manière dont les décisions sont prises en général et ensuite la capacité de bâtir une stratégie fondée sur cette compréhension, [combinées] à une bonne appréhension du monde qui nous entoure », soutient Mme Clark qui a quitté la politique en 2017 et siège aujourd’hui aux conseils de Shaw Communications inc. et de Recipe Unlimited Corp. Les politiciens apportent une conscience aiguë de la manière dont les décisions et les gestes des entreprises seront accueillis par le public, dit-elle. 38

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« Nous avons une hyperconscience de la façon dont les choses vont se passer dans le marché. » Au Canada, soutient Mme Clark, beaucoup de grandes entreprises évoluent dans un environnement réglementé, qu’il s’agisse des institutions financières, des télécommunications, des transports ou de l’énergie. Il y a des risques particuliers associés à la réglementation. Il est donc crucial de « comprendre le paysage politique et d’être en mesure de voir au bout de la route. » Une personne qui possède une connaissance des processus décisionnels des hauts fonctionnaires et des bureaucrates et « qui a été dans les pièces où ces décisions sont prises » peut être extrêmement utile à un conseil, dit-elle. Gourou de la gouvernance depuis de nombreuses années, Peter Dey, qui préside aujourd’hui le conseil d’administration de la firme de courtage en placement Paradigm Capital inc., affirme que les ex-politiciens peuvent améliorer la gouvernance globale d’un conseil, mais pas seulement parce qu’ils ont déjà été politiciens. « C’est en raison des expériences variées qu’ils ont vécues comme politiciens », à gérer des enjeux délicats et à bâtir des consensus. Ces attributs sont hautement valorisés par les conseils aujourd’hui, dit-il, en particulier si ces personnes sont considérées comme s’étant élevées audessus de la politique partisane. M. Dey, auteur du rapport phare de 1994 sur la gouvernance de sociétés intitulé Where Were the Directors?, lequel a pavé la voie à l’émergence de conseils plus petits et plus indépendants, explique que les entreprises n’embauchent plus des expoliticiens pour des raisons d’image. « Elles réalisent que chaque siège autour de la table doit compter et que si vous

choisissez quelqu’un pour les mauvaises raisons, il s’agira [essentiellement] d’un siège vacant. Les conseils ne peuvent pas se permettre cela. » Pour certaines entreprises, une expérience politique pointue est hautement prisée si elle s’aligne sur des enjeux particuliers liés à la réglementation ou au commerce, souligne M. Dey. « Si vous êtes dans l’industrie du bois d’œuvre en Colombie-Britannique ou dans le secteur énergétique en Alberta à essayer de porter votre produit vers les marchés, ou encore dans le secteur agricole au Québec, le fait d’avoir la bonne personne à la table peut ajouter de la valeur aux connaissances d’ensemble du conseil. » Il y a cependant une exception à cette tendance et M. Dey croit que c’est le secteur du cannabis. Dans ce cas précis, le recrutement d’anciens politiciens semble inspiré par le désir de pousser cette industrie vers le commerce traditionnel. « Je ne suis pas certain que les politiciens voudront aider les producteurs de cannabis à traverser les dédales réglementaires, dit-il. Je pense qu’il s’agit d’une initiative qui consiste à tenter de convaincre les gens que le secteur du cannabis est une industrie comme une autre. Si une entreprise recrute un politicien de renom à son conseil … elle envoie au marché le message suivant : « Même certains de nos leaders sont disposés à être associés à notre secteur. » » Derek Burney, ancien ambassadeur du Canada aux États-Unis et ancien chef de la direction de Bell Canada Entreprises et de CAE inc., a passé plusieurs années à siéger à des conseils et à recruter des administrateurs. Il indique qu’il est difficile de généraliser à propos de la valeur d’un ex-politicien au sein d’un conseil et que tout dépend

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de la personnalité et de l’expérience de la personne. « Tout se résume au calibre des gens », dit-il. M. Burney explique que lorsqu’il était à la recherche d’administrateurs, à titre de président du comité de gouvernance, son objectif était toujours de trouver quelqu’un qui s’harmoniserait à la chimie du conseil. « Vous voulez des gens provenant d’horizons divers qui offrent au conseil une pensée indépendante et qui sont en mesure de remettre en question des décisions de la direction sans pour autant se livrer à de la microgestion. » Cela s’applique autant aux anciens politiciens qu’à tout autre administrateur potentiel, souligne-t-il. RICHARD BLACKWELL est un ancien journaliste économique au Financial Post et au Globe and Mail. Au cours de trois décennies, il a couvert de multiples secteurs, dont la technologie, les services financiers, les médias et l’énergie.

•

Les entreprises recrutent de plus en plus d’anciens politiciens à leurs conseils d’administration afin de les aider à gérer les défis internationaux, les changements réglementaires et les projets controversés.

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Les anciens politiciens comprennent les processus gouvernementaux et la manière dont les élus collaborent avec les fonctionnaires et prennent des décisions. Ils n’apportent pas d’informations confidentielles particulières, mais comprennent plutôt comment établir la bonne stratégie et poser les bonnes questions.

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Il est important pour un politicien à la retraite qui envisage de se joindre à un conseil de décider d’abord si ses affiliations ou décisions passées pourraient être perçues comme des sources de conflits d’intérêts.

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Parmi les 100 plus importantes entreprises canadiennes inscrites en bourse, environ 4 pour cent des nouvelles nominations au conseil sont celles d’anciens politiciens ou hauts fonctionnaires.

LE POINT DE VUE DE LA RECHERCHE La recherche universitaire suggère que le fait d’avoir un ex-politicien au conseil d’administration peut améliorer la performance d’une entreprise sur le marché. Dans le cadre d’une étude menée en 2005 et intitulée Politicians on the Board of Directors: Do Connections Affect the Bottom Line?, Amy Hillman de l’Université d’État de l’Arizona s’est penchée sur le cas de 300 entreprises américaines dont la moitié évoluaient dans des industries réglementées. Ses résultats ont démontré que les entreprises comptant des politiciens dans leur conseil ont mieux réussi, tout au moins à l’égard de leur valeur boursière. (Les liens avec la performance financière n’étaient pas aussi forts.) Les entreprises évoluant dans des industries réglementées sont celles qui tiraient le meilleur parti de la présence d’un ex-politicien dans leur conseil. Dans une étude de suivi qu’elle a coécrite en 2008, Mme Hillman s’est penchée sur la carrière de 236 anciens politiciens aux États-Unis pour découvrir que ceux-ci faisaient l’objet de la plus forte demande peu après avoir quitté leurs fonctions. Ils étaient également plus susceptibles d’être appelés à un conseil s’ils avaient de l’expérience à titre de hauts fonctionnaires et si le parti auquel ils appartenaient était encore au pouvoir. L’étude a aussi indiqué que l’attractivité d’un ancien politicien comme candidat à un poste d’administrateur diminuait rapidement après qu’il avait quitté ses fonctions. L’étude, rappelons-le, ne portait que sur l’expérience américaine et Mme Hillman a reconnu que les résultats ne pouvaient pas être directement extrapolés à d’autres pays dont les structures politiques sont différentes. - RB

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LA TECHNOLOGIE

PHOTOS: CHRISTINNE MUSCHI

Le nécessaire

« administrateur numérique »

La spécialiste en technologie et gouvernance ESTELLE MÉTAYER discute avec la journaliste Virginia Galt de la nécessité pour les conseils d’améliorer leur performance numérique en élargissant leur bassin d’embauche

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L’an dernier, les conseils d’administration de deux organisations canadiennes ont renforcé leur expertise numérique en recrutant le génie technologique Nicolas Darveau-Garneau dont l’emploi à temps plein est celui d’évangéliste en chef de la recherche chez Google. La décision de l’Industrielle Alliance Assurance et services financiers inc. (iA Groupe financier), une firme de Québec, et de celle de Toronto Groupe TMX de nommer M. Darveau-Garneau, qui est aussi investisseur providentiel dans des entreprises en démarrage et lui-même ancien entrepreneur technologique, à leurs conseils est un signe des temps. Il existe un appétit pour cette nouvelle lignée d’« administrateurs numériques » au moment où un nombre restreint mais croissant d’entreprises inscrites en bourse sont à la recherche d’une compréhension approfondie des technologies en émergence dans la salle du conseil, affirme Estelle Métayer, administratrice de sociétés, professeure de commerce et présidente du comité de technologie de la section du Québec de l’Institut des administrateurs de sociétés. Alors que certains conseils recherchent des administrateurs pour remplir ce rôle spécifique, d’autres proposent à un ou deux de leurs membres existants de devenir leur administrateur numérique en leur demandant d’acquérir la formation nécessaire pour ce faire. « Je vois beaucoup de cela, soutient Mme Métayer, professeure associée à l’école de gestion de l’Université McGill et membre du corps enseignant du Programme de perfectionnement des administrateurs de l’IAS. Les administrateurs lui disent constamment : « Il nous faut devenir meilleurs [en surveillance technologique]. »

LE BASSIN EST GRAND Mme Métayer ne partage pas l’opinion généralement répandue selon laquelle il existe une pénurie de talents technologiques au Canada. « Il y a beaucoup de talent au pays. Il y a beaucoup de gens qui ont une compréhension approfondie des technologies émergentes. » Mais à cet égard, le déficit de compétences le plus inquiétant est à l’échelle des conseils d’administration. Une manière de combler ce déficit, explique Mme Métayer, « consiste, pour nos comités de gouvernance et nos conseils, à éviter de recourir systématiquement à d’anciens chefs de la direction ou à des gens qui ont une expérience de gouvernance » pour pourvoir un poste au conseil.  Les organisations commencent graduellement à modifier leurs façons de faire. « Chez certains conseils, on se dit : ‘Nous avons treize administrateurs autour de la table; nous pouvons en avoir un ou deux véritablement versés dans le numérique.’ » Plusieurs de ces « recrues numériques » apportent au conseil bien davantage que leur intelligence technologique, ajoute-t-elle. Le Canadien Darveau-Garneau, par exemple, qui est diplômé en mathématiques de l’Université de Waterloo, a aussi obtenu une maîtrise en administration des affaires de la Harvard Business School et travaillé comme analyste chez McKinsey & Co. et Sanford C. Bernstein & Co. LLC avant de se joindre à Google. Dans son rôle actuel de stratège en chef de la recherche, il aide les plus importants annonceurs de Google à améliorer leur stratégie numérique. Il est également conférencier invité en apprentissage machine et en marketing

à la Kellogg School of Management de la Northwestern University en Illinois. M. Darveau-Garneau n’est pas le seul crack des technologies parmi les douze membres du conseil d’iA Groupe financier. Son collègue administrateur, Louis Têtu, est chef de la direction de Coveo Solutions, une autre entreprise de la ville de Québec spécialisée dans les applications de recherche en intelligence artificielle. « On n’a pas à changer entièrement la composition du conseil, souligne Estelle Métayer. Mais on souhaite avoir un ou deux administrateurs numériques autour de la table. »

L’EXPERTISE S’ÉLARGIT Mme Métayer animera en juin une table ronde lors du Congrès national de l’IAS à Toronto sur la manière dont la technologie stimule et modifie le rôle de l’administrateur. Selon elle, il n’est désormais plus suffisant pour le conseil d’organiser des exposés du directeur des services d’information ou du directeur de la technologie. De nos jours, il est essentiel qu’un ou deux administrateurs aient une connaissance pratique des technologies émergentes. En général, lorsque des administrateurs songent à la technologie, leurs principaux sujets de préoccupation sont les risques liés à la sécurité informatique et la complexité des investissements technologiques. Cependant, avec l’avènement et l’application de l’intelligence artificielle, de la réalité augmentée et de la réalité virtuelle, des drones, des chaînes de blocs, de l’Internet des objets, de l’impression 3-D, de la robotique et de l’informatique en nuage, il s’agit d’un enjeu beaucoup plus large, assure Estelle Métayer, qui est aussi fondatrice MARCH/APRIL 2019

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de la firme montréalaise Competia qui conseille les dirigeants et les conseils d’entreprises sur « l’intelligence concurrentielle » et la stratégie. Estelle Métayer est également administratrice indépendance chez BRP (Bombardier Produits récréatifs) et le fabricant d’horlogerie suisse Audemars Piguet. Elle est aussi une utilisatrice passionnée et prolifique de Twitter, un réseau social sur lequel elle offre des commentaires informatifs et des liens concernant les affaires, la gouvernance et le développement technologique. Pour aider les administrateurs à naviguer dans les complexités de la gouvernance à l’ère numérique, le comité technologique de la section Québec de l’IAS vient tout juste de publier un guide intitulé « Les technologies émergentes : comprendre les bouleversements à venir ». « Le conseil doit être en mesure de comprendre comment l’entreprise prépare l’avenir, comment les technologies émergentes stimulent ou menacent les stratégies de demain et comment elle gère les risques qui y sont associés, comme la sécurité informatique et l’acquisition de talents », écrivent les membres du comité, dont Mme Métayer fait partie. Toutes les entreprises ne plongeront pas dans l’intelligence artificielle, les chaînes de blocs (la technologie qui soutient les transactions en monnaie numérique) ou la robotique, mais il est impératif qu’elles comprennent l’environnement technologique qui évolue rapidement. « Aujourd’hui, les conseils doivent être au fait des occasions et des risques inhérents aux technologies émergentes et s’entourer de l’expertise nécessaire pour être en mesure de superviser les décisions de la direction qui sont le plus susceptibles de créer des occasions stratégiques », est-il écrit dans le guide.

Les conseils prévoyants sont déjà engagés dans ces enjeux, affirme Mme Métayer, qui sera accompagnée lors de la table ronde du Congrès de l’IAS de trois administrateurs chevronnés, soit Chris Clark (Les Compagnies Loblaw Ltée, Air Canada, Choice Properties Real Estate Investment Trust), Deepak Chopra (Celestica inc., The Northwest Co. inc.) et Kalpana Raina (Yellow Media Group, Information Services Group). Les participants envisageront la question sous plusieurs angles, dont les suivants : comment les technologies

ont changé le rôle de l’administrateur et les nouvelles compétences que les conseils doivent acquérir ou développer; si la surveillance du risque devrait être évaluée et supervisée par un comité distinct; comment l’accroissement de l’automatisation et d’autres technologies nouvelles affectent la course aux talents et menacent les postes existants au sein de l’organisation; le défi, pour les membres du conseil, de soutenir le rythme de la course aux technologies et son impact sur les modèles d’affaires et les écosystèmes de leurs organisations.

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L’INACTION EST DANGEREUSE Mme Métayer affirme en entrevue qu’en l’absence d’une supervision technologique robuste, les organisations se placent en situation de risque inutile. Elle cite, à cet égard, les avertissements émis par les autorités réglementaires canadiennes sur les valeurs mobilières concernant la divulgation inappropriée de renseignements importants sur les médias sociaux. (« À mesure que les médias sociaux et l’utilisation d’Internet jouent un rôle accru dans la manière dont nous communiquons l’information, nous avons observé une proportion plus élevée de divulgations de renseignements d’entreprises dans des espaces de discussion, des présentations aux investisseurs, des blogues et des sites de médias sociaux, ont souligné les Autorités canadiennes en valeurs mobilières dans un bulletin diffusé en 2017. Étant donné que les décisions d’investissement sont prises à la lumière de renseignements de cette nature, il est essentiel pour les émetteurs d’adhérer à 44

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des pratiques de divulgation de grande qualité, sans égard au véhicule de diffusion. ») Les administrateurs semblent bien au fait des risques pour la sécurité informatique posés par des pirates qui s’introduisent dans les réseaux de l’entreprise et y volent des renseignements confidentiels. Mais il y a aussi des inquiétudes croissantes à propos de ce que les entreprises font avec les données qu’elles recueillent sur leurs propres clients, souligne Mme Métayer. « Beaucoup d’entreprises collectent des données sur leurs clients et ceux-ci commencent à réaliser l’ampleur de ce phénomène et cela peut se retourner contre elles. » Mais selon elle, « il existe un autre passif et celui-là est stratégique » lorsque, par exemple, une entreprise devient de moins en moins concurrentielle parce qu’elle n’a pas adopté à temps une nouvelle technologie. VIRGINIA GALT, ancienne journaliste affectée à l’économie et à l’éducation pour le Globe and Mail, couvre actuellement les questions reliées au droit, à l’éducation et à la gestion pour un certain nombre de publications.

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La nécessité pour un conseil d’acquérir de l’expertise technologique ne porte plus seulement sur la compréhension des menaces à la sécurité informatique, mais aussi sur la capacité de demeurer concurrentiel par la compréhension des principales composantes de la nouvelle économie.

•

Certains conseils ont commencé à s’y préparer en recrutant des dirigeants et des entrepreneurs à succès provenant du secteur technologique. Il n’y a pas de pénurie de talent. La clé consiste à élargir le recrutement au-delà du bassin des anciens chefs de la direction et des administrateurs actuels.

•

Pour devenir plus avertis en matière de technologie, les conseils n’ont pas à se réinventer complètement. L’ajout d’un ou deux « administrateurs numériques » s’avérera extrêmement utile.

•

Il existe une variété croissante de ressources disponibles pour aider les conseils à franchir ce pas, dont un nouveau rapport produit par la section Québec de l’IAS intitulé « Les technologies émergentes : comprendre les bouleversements à venir » ainsi qu’une table ronde animée par Estelle Métayer qui aura lieu dans le cadre du congrès national de l’IAS en juin.

SPENCERSTUART ICD DIRECTORS ON THE MOVE

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ACADEMIC Ms. Kori Kingsbury University of Ontario Institute of Technology Governor Dr. Cameron Montgomery Education Quality and Accountability Office Chair AGRICULTURAL Mr. Jacques Dessureault The Green Organic Dutchman Holdings Ltd. Director Mr. Ronald Funk Aurora Cannabis Inc. Director Mr. David Hope Ontario Processing Vegetable Growers Board Chair Mr. Kevin Keagan Beleave Inc. Director Mr. David Lenigas Future Farm Technologies Inc. Chair Dr. Caroline MacCallum The Green Organic Dutchman Holdings Ltd. Director Mr. Adrian Montgomery MJardin Group Inc. Director Hon. James Moore Benchmark Botanics Inc. Director

Mr. Andrew Steane Beleave Inc. Director Mr. Lorne Sugarman MJardin Group Inc. Director Mr. Jaimie Wuttunee Beleave Inc. Director Mrs. Elan MacDonald, ICD.D Atlas Biotechnologies Inc. Director ARTS AND CULTURAL Ms. Julie Jai Canadian Museum for Human Rights Trustee Mr. Ray Protti Royal B.C. Museum Director Ms. Michèle Rivet Canadian Museum for Human Rights Vice-chair COMMUNICATIONS Mr. Glenn Cumyn Qwick Media Inc. Director Mr. Randy Lennox Banff World Media Festival Chair Mr. Kevin McMillan Qwick Media Inc. Director

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CONSUMER Ms. Sarah Bundy Peekaboo Beans Inc. Director Ms. Shari Mogk-Edwards Eve & Co. Inc. Director ENERGY Ms. Corinne Boone Canadian Energy Research Institute Director FINANCIAL SERVICES Ms. Alison Alfer Western Pacific Trust Co. Director

FOREST AND PAPER PRODUCTS

LIFE SCIENCES

Mr. Lee Doney Western Forest Products Inc. Director

Ms. Bonnie Baynham Gateway Centre of Excellence in Rural Health Director

Mr. Daniel Nocente Western Forest Products Inc. Director

Mr. Jamieson Bondarenko BriaCell Therapeutics Corp. Director

Mr. Michael Waites Western Forest Products Inc. Chair

Dr. Myrna Francis Covalon Technologies Ltd. Director

HEALTH AND WELLNESS

Mr. John Hick Liberty Health Sciences Inc. Director

Ms. Marilyn Rook First Nations Health Authority Director INDUSTRIAL

Mr. Phil Mair Gateway Centre of Excellence in Rural Health Director

Linda Galipeau WSP Global Inc. Director

Mr. Ian McKinnon Liberty Health Sciences Inc. Chair

Ms. Jane Skoblo, ICD.D Community Trust Co. Director

Mr. A.S. Hanlon Source Energy Services Ltd. Chair

Ms. E. Gay Mitchell Canadian Western Bank Director

Mr. Karl Johannson Clearstream Energy Services Inc. Director

Mr. Dave Million Gateway Centre of Excellence in Rural Health Director

Ms. Lea Ray Street Capital Group Inc. Chair

Mr. Michael MacBean Source Energy Services Ltd. Director

Ms. Linda Robinson Thomson Reuters Founders Share Co. Director

Mr. Sean McMaster Clearstream Energy Services Inc. Chair

Lieutenant-General (ret.) The Honourable Roméo Dallaire Fairfax Africa Holdings Corp. Director

Ms. Qianying Zhou GCC Global Capital Corp. Director

Ms. Nancy Simpson Gateway Centre of Excellence in Rural Health Director Mr. John Suk Covalon Technologies Ltd. Director

Mr. David Rosseau Global Water Resources Inc. Director

MARCH/APRIL 2019

SPENCERSTUART ICD DIRECTORS ON THE MOVE

METALS AND MINING Mr. Jean Fontaine Arianne Phosphate Director Mr. Doug Forster Victory Metals Inc. Director Mr. Michael Gagnon Canadian Metals Inc. Chair Mr. Bryson Goodwin Le Mare Gold Corp. Director Mr. Hubert Lacroix Stornoway Diamond Corp. Director Mr. Sam Malin Global Li-Ion Graphite Corp. Director Ms. Angelina Mehta Stornoway Diamond Corp. Director Mr. Craig Nelson Oceanagold Corp. Director Mr. Dallas Pretty Prize Mining Corp. Director Mr. Ian Reid Oceanagold Corp. Chair NOT-FOR-PROFIT Ms. Mary Anne De MonteWhelan Ontario Securities Commission Commissioner Mr. Rob Jeffery CMA Investco Inc. Director Ms. Jacqueline Gauthier, ICD.D Skate Canada Director

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Ms. Gaelen Morphet CMA Investco Inc. Director

Mr. Glenn Koach Zargon Oil & Gas Ltd. Director

Mr. Paul Gibson, ICD.D Daisy Intelligence Corp. Director

Ms. Anne-Marie O'Donovan CMA Investco Inc. Director

Ms. Stacey McDonald Birchcliff Energy Ltd. Director

Ms. Reetu Gupta Zonetail Inc. Director

Ms. Priya Patil, ICD.D Council of Great Lakes Region Director

Mr. Gordon Ritchie Obsidian Energy Ltd. Chair

Ms. Colleen Johnston Shopify Inc. Director

REAL ESTATE

Mr. Bernard Li Vizetto Inc. Director

Ms. Jill Pepall CMA Investco Inc. Director Mr. Rory Ring Chamber Executives of Ontario Chair Mr. Rory Ring Ontario Chamber of Commerce Director

Mr. Paul Beesley Crombie Real Estate Investment Trust Trustee Mr. Stephen Diamond Waterfront Toronto Chair Mr. Andrew MacLeod Waterfront Toronto Director

Mr. Tim Smith CMA Investco Inc. Director

Mr. Patrick Sheils Waterfront Toronto Director

Dr. Suzanne Strasberg Canadian Medical Association Chair

Mr. Kevin Sullivan Waterfront Toronto Director

Mr. John van Cuylenborg Victoria Foundation Director

Mr. Christopher Voutsinas Waterfront Toronto Director TECHNOLOGY

Ms. Mary Meffe Star Navigation Systems Group Ltd. Director Mr. Edward Reeser RockMass Technologies Inc. Director Mr. Anil Saxena First Global Data Ltd. Director Mr. Brian Storseth ParcelPal Technology Inc. Chair Mr. David Tsubouchi Star Navigation Systems Group Ltd. Director TRANSPORTATION

Mr. George Vasic CMA Investco Inc. Director

Ms. Margaret Atwood Vizetto Inc. Director

Ms. Heather Zordel Ontario Securities Commission Commissioner

Mr. David Podmore British Columbia Ferry Services Director

Ms. Brigitte Bourque D-Box Technologies Inc. Director

Mr. Michael Rosseau Chorus Aviation Inc. Director

Mr. Jon Clarke Vizetto Inc. Director

Mr. Kevin Sherkin Drone Delivery Canada Director

Mr. Colin Doe Vizetto Inc. Director

Mr. Stephen Smith West Wind Aviation Group Director

OIL & GAS Ms. Karen Clarke-Whistler Enerplus Corp. Director Mr. John Dielwart Crescent Point Energy Corp. Director

* Denotes ICD members

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