Roundtable Discussion on Corporate Governance: Panel Discussion

• Author: Carol Hansell (Moderator), J. David A. Jackson, William M. Mackenzie, Maureen J. Sabia, Rene R. Sorell, and Wes Voorheis
• Pages: 553-584

Roundtable Discussion

on

Corporate Governance

Panel

Discussion

MODERATOR CAROL

HANSELL:

There

was a

practitioners' conference

at

Langdon

Hall several months

ago,

and I was

sitting beside Rene

Sorell,

we

were talking about this session,

and

somebody

at the

table

said,

"Who

did you get to sit on the

panel?"

and I ran

through,

and the

peo-

ple

said, "You

are

kidding

me. You got all

those

people

in one

place

to

sit on

this kind

of a

panel?"

The

table

we

were sitting

at was

quite

awestruck

by the

calibre

of the

group

we

managed

to get

together.

I

want

you to

spend

more time listening

to

them than

me so I'm

going

to

go

through

the

bios quickly. Most

of

them

are

probably known

to

you.

I've never actually

—

this

is a

lovely name

so I'm

going

to say the

whole name: John David Allan Jackson. That

is

actually really lovely.

David

Jackson.

MR.

DAVID JACKSON:

Two

grandfathers

and a

father.

MODERATOR HANSELL:

Two

grandfathers

and a

father.

Very

nice.

Carol

Hansell

of

Davies Ward Phillips

&

Vineberg LLP;

J.

David

A.

Jackson

of

Blake,

Cassels

&

Graydon

LLP; William

M.

Mackenzie,

President,

Fairvest

Corporation;

Maureen

J.

Sabia,

Lawyer

and

Corporate Director; Rene

R.

Sor-

rell

of

McCarthy

Tetrault;

and Wes

Voorheis, Voorheis

& Co.

553

David,

as you may

know,

is at

Blakes,

and

he's

certainly considered

if

not

"the,"

at

least

one of the

deans

of the

Canadian corporate

law

community,

much admired

and

much accomplished.

David

will

be

speaking

first.

We're

going

to

kind

of go in an odd

order here. Second will

be

Bill

MacKenzie,

who is

with Fairvest. Fairves

is

known

to

most

of us as

having shown

an

incredible amount

of

lead-

ership

in the

area

of

corporate governance. Whether

you

agree with

them

all the

time

or on

individual

positions

that they take, there

has

cer-

tainly

been

a

huge contribution

made,

and

much

of it is due to

Bill's

efforts.

After

Bill,

we

will

be

hearing

from

—

I'll

tell

you

about

the

approach

we'll

use on the

panel

in a

second,

but

Maureen Sabia

has

agreed

to

bring

us a

perspective both

of a

lawyer

and as a

very experienced direc-

tor.

I've been watching Maureen

as a

director

for

most

of my

career.

She

has

been

in

challenging situations,

she has

been

in

huge-growth situa-

tions,

she has

been

in

positions

of

enormous leadership

in

critical

times,

and

we're very proud

to

have

her on the

panel.

The

last member

of our

panel

is Wes

Voorheis,

who I'm

always sorry

I

don't

know better.

He was a

legend

at

Davies. Just

as I was

joining

he

was on

sabbatical

and

sadly didn't come back,

but he

continues

to be a

legend around

the

firm.

He has

moved into more

of a

strategic advisory

position,

and he can

probably tell

you

better than

I can

exactly

what that

involves,

but he

goes into corporations

and

helps them

to

turn them-

selves

around

from

a

variety

of

management/governance

perspectives.

It

was

interesting. When

we did the

first

planning session

for

this

panel you're never really sure what people's perspectives are,

and

when

I

said

to the

group, "Well,

for

example,

do you

think governance mat-

ters?"

Wes

said very quietly, "Governance always matters."

And so his

perspective

is

going

to be an

interesting

one to

hear about.

What

we

decided

to do — we

have only

an

hour

and a

whole

lot of

talent

here

— we

have asked everybody

to

compress

his or her

com-

ments into eight

or

nine minutes. Rather than

just

having sequential

presentations

on the

area

of

governance

effectiveness,

where

is it

going,

we're going

to ask

each

of the

panelists

to

offer

some comments,

and

then

the

rest

of the

panel

is

going

to

have

at

them.

So

there will

be, I

bet,

a bit of

disagreement, some

different

perspec-

tives.

You're welcome

to

join

in. If you

don't

put

your hand

up

aggressive-

ly

you

probably won't

get

your

oar in, so

make sure that

we can see it.

So,

David,

can I ask you to

start?

MR.

DAVID JACKSON:

Carol, thank

you

very much.

554

PANEL

DISCUSSION

It's

an

amazing tribute

to

corporate governance that

on a

beautiful

Friday afternoon

we

have this many people

in the

room still.

Certainly,

those

of us who

agreed

to

participate, Carol, agreed largely because

of

your very substantial reputation

in

this area

and the

immense amount

of

work you've done.

Rene's paper

is

absolutely

terrific.

It's

a

great read,

and I

commend

it

to

you. It's provocative,

and

it's stimulating,

and it

sets

forward

a lot

of

issues that

we

think about

in the

context

of

corporate governance.

The

reality,

however,

is

that

our

business economy

is

founded

on

corporations,

and we

need

some

method

of

governing them,

and so I

think that while

it is

appropriate

to

challenge

and to

question some

of

the

tenets, it's also appropriate

to

look

at how we can

make corporate

governance better

in the

belief

that

it

does matter.

It may not

make

all of

the

difference

in the

performance

of a

corporation,

but it

certainly can't

hurt

is the

view that I've taken.

As

Carol

has

said, we're coming

at

this

from

slightly

different

per-

spectives.

My

principal perspective

is as a

legal adviser

who

deals with

boards

and

senior

executives

in the

role

of

assessing

and

trying

to

improve corporate governance practices

from

a

legal oversight, damage

control,

and

risk-prevention perspective. Secondly,

I

look

at

this

through

the

lens

of a

person

who is a

director

of

public, private,

and

not-

for-profit

corporations.

My

principal thesis will

be

that structural requirements

and

mem-

bership

specifications

are

nice,

but

they

don't

ensure

effective

gover-

nance. That only

flows

from

a

clear

understanding

of the

responsibilities

of

each element

of the

governance structure,

an

appropriate

flow

of

information,

a

concept

of

teamwork

and

common goals,

and a

clear

and

unwavering recognition that

the

directors

and

officers

must

act

with

a

view

to the

best

interests

of the

corporation.

The

focus

in

most corporate governance discussions

is on the

board

of

directors. While

the

board

is an

important,

and

probably

in

most sit-

uations

the

most important, element

of the

governance

of an

organiza-

tion it's certainly

not the

only important element. Management

and

senior operating personnel

are a

very important part

of the

governance

of

an

organization. It's inappropriate

to

focus

on the

directors

to the

exclusion

of the

other

critical

elements

of

governance.

Structure

is

relevant

to

ensuring

that

all of the

matters

important

to

governance

are

dealt with

effectively

in

some fashion.

If so

inclined,

a

small board could probably

fulfil

all

aspects

of the

governance oversight

responsibilities,

with

a

separate audit committee only

to

deal

with

the

statutory requirements.

Larger

boards

are not

effective

bodies

for

detail

Roundtable

Discussion

on

Corporate Governance

555