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	<title>IGOPPParties prenantes &#8211; IGOPP</title>
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		<title>Private market investors neglect risk in rush for returns</title>
		<link>https://igopp.org/en/private-market-investors-neglect-risk-in-rush-for-returns/</link>
		<comments>https://igopp.org/en/private-market-investors-neglect-risk-in-rush-for-returns/#respond</comments>
		<pubDate>Wed, 04 Dec 2024 15:16:42 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
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		<description><![CDATA[The recent scandal involving Adani Group and Canadian pension fund CPDQ exposes flagging standards as investors rush for private markets across emerging markets in Asia. [&#8230;] François Dauphin, who leads the Montreal-based Institute for governance of private and public organisations, identifies a concerning trend. He notes the investors&#8217; due dilligence is suffering under pressure to [&#8230;]]]></description>
		<content><![CDATA[The recent scandal involving Adani Group and Canadian pension fund CPDQ exposes flagging standards as investors rush for private markets across emerging markets in Asia.

[...]

François Dauphin, who leads the Montreal-based Institute for governance of private and public organisations, identifies a concerning trend.

He notes the investors' due dilligence is suffering under pressure to deploy capital quickly and achieve returns, often in unfamiliar investment vehicules.

''In recent years, there has been an abundance of capital from private funds or institutional funds looking for private investments opportunities to improve their total returns,'' Dauphin told AsianInvestor.

''The appeal of private placements lies in the potential of high returns, but the level of risk associated with such projects is also necessarily higher. This is all more true when distance does not allow for direct monitoring.''

Numerous institutional have rushed past standard risk assessment procedures in eagerness to secure leading investment positions, he added.

''This compromised approach to due dilligence has inevitably, led to adverse outcomes, as evidenced by the current situation in India.''

Read more [1]

[1] https://igopp.org/wp-content/uploads/2024/12/ASIANI1.pdf]]></content>
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		<title>Family Controlled Companies: Drivers of Canadian Economy</title>
		<link>https://igopp.org/en/family-controlled-companies-key-drivers-of-canadian-economic-sustainability-panel-2/</link>
		<comments>https://igopp.org/en/family-controlled-companies-key-drivers-of-canadian-economic-sustainability-panel-2/#respond</comments>
		<pubDate>Wed, 18 Oct 2023 02:51:19 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
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		<guid isPermaLink="false">https://igopp.org/family-controlled-companies-key-drivers-of-canadian-economic-sustainability-panel-2/</guid>
		<description><![CDATA[To listen to the full panel with Louis Audet (board member of IGOPP), about the most recent report of IGOPP on family businesses, please click here or on the image below (the panel&#8217;s duration is 43 minutes):]]></description>
		<content><![CDATA[To listen to the full panel with Louis Audet (board member of IGOPP), about the most recent report of IGOPP [1] on family businesses, please click here  [2]or on the image below (the panel's duration is 43 minutes):

[1] https://igopp.org/en/the-performance-of-canadian-controlled-companies-listed-on-the-sptsx/
[2] https://www.youtube.com/watch?v=EneTrzShDZM]]></content>
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		<item>
		<title>Family Controlled Companies: Key Drivers of Canadian Economic Sustainability &#8211; Panel</title>
		<link>https://igopp.org/en/family-controlled-companies-key-drivers-of-canadian-economic-sustainability-panel/</link>
		<comments>https://igopp.org/en/family-controlled-companies-key-drivers-of-canadian-economic-sustainability-panel/#respond</comments>
		<pubDate>Wed, 18 Oct 2023 02:34:41 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
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		<description><![CDATA[To listen to the full panel with Louis Audet (board member of IGOPP), about the most recent report of IGOPP on family businesses, please click here or on the image below (the panel&#8217;s duration is 43 minutes):]]></description>
		<content><![CDATA[To listen to the full panel with Louis Audet (board member of IGOPP), about the most recent report of IGOPP [1] on family businesses, please click here  [2]or on the image below (the panel's duration is 43 minutes):

 [3]

[1] https://igopp.org/en/the-performance-of-canadian-controlled-companies-listed-on-the-sptsx/
[2] https://www.youtube.com/watch?v=EneTrzShDZM
[3] https://www.youtube.com/watch?v=EneTrzShDZM]]></content>
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		<title>Companies should disclose board members’ spoken languages to investors, Quebec group Médac says</title>
		<link>https://igopp.org/en/companies-should-disclose-board-members-spoken-languages-to-investors-quebec-group-medac-says/</link>
		<comments>https://igopp.org/en/companies-should-disclose-board-members-spoken-languages-to-investors-quebec-group-medac-says/#respond</comments>
		<pubDate>Thu, 29 Dec 2022 18:51:57 +0000</pubDate>
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		<guid isPermaLink="false">https://igopp.org/companies-should-disclose-board-members-spoken-languages-to-investors-quebec-group-medac-says/</guid>
		<description><![CDATA[A leading investors’ rights group in Quebec is pressing publicly traded Canadian companies to reveal what languages their board members speak, saying the disclosure is needed to ensure rising expectations for corporate diversity are being met. The call comes from Montreal-based Mouvement d’éducation et de défense des actionnaires, known as Médac. The group says the [&#8230;]]]></description>
		<content><![CDATA[A leading investors’ rights group in Quebec is pressing publicly traded Canadian companies to reveal what languages their board members speak, saying the disclosure is needed to ensure rising expectations for corporate diversity are being met.
The call comes from Montreal-based Mouvement d’éducation et de défense des actionnaires, known as Médac. The group says the information should be made public in the circulars sent to investors ahead of companies’ annual meetings.
Médac is making a shareholder proposal to that effect this year for each of the 21 companies in which it is invested, including Canada’s big six banks and pillars of the Quebec corporate community such as Alimentation Couche-Tard Inc and Dollarama Inc. and it has submitted the suggestion to the federal Finance Department as part of recent consultations on improving diversity in federally regulated financial institutions.




“We think this is a blind spot for companies in terms of diversity,” said Willie Gagnon, Médac’s managing director. “We want the disclosure of languages spoken, starting with the official languages of course. But we also want the other languages when it’s pertinent.”




The request plays into an ever-sharpening focus in Canada on corporate governance standards, including expectations that boards have more members from traditionally underrepresented groups than they did in the past. It also reflects the thorny issue of language in Quebec [1], a province shaken by several linguistic controversies that have spilled into the business world in recent months.
Arguably the biggest of these was Air Canada chief executive Michael Rousseau’s verbal faux pas [2] in November, 2021. Following a speech he made in English to the Chamber of Commerce of Metropolitan Montreal, Mr. Rousseau said he had managed to live in Montreal for 14 years without speaking French, and suggested he was too busy to learn the language.
His comments shocked politicians in Quebec City and Ottawa alike, and triggered more than 2,500 complaints to the office of Canada’s Commissioner of Official Languages. In the ensuing storm, SNC-Lavalin chief executive Ian Edwards called off a largely English-language speech he was set to give just days later. Attention also turned to other Quebec-based companies with perceived linguistic shortcomings, including Canadian National Railway Co., whose board lacked any French speakers for a time.
[...]
The Canadian government has since 2020 required companies incorporated at the federal (but not provincial) level to report to shareholders and Corporations Canada yearly on the representation of women, visible minorities, Indigenous peoples and people with disabilities on their boards and in senior management. The requirement does not include any disclosure related to language.
That is an omission that needs to be corrected, according to Médac. The group argues diversity can’t be reduced to matters strictly related to biology, or other things that don’t bear on competence.
François Dauphin, president of the Institute of Governance for Public and Private Organizations, said it makes sense for companies to disclose the language skills of their executives and directors because it would show they understand the different contexts and geographies in which their businesses operate. But he said it should be a voluntary disclosure, rather than one forced by regulation.
“It has to be relevant to the strategy of the organization itself,” Mr. Dauphin said. If, for example, a third of a company’s shareholders are native French speakers, it would be nice to have someone who speaks French on the board, he said.
“Just as much as diversity in general, where we want to have minorities on the board, we need to have that representativeness in a way to retain employees or to confer some kind of legitimacy with stakeholders in general,” Mr. Dauphin said.




In 2021, Médac made a separate shareholder proposal on language that it presented to its portfolio companies, in which it asked that the official status of French be expressly written into their corporate statutes. The idea was rejected by all of them.




Read more [3]

[1] https://www.theglobeandmail.com/canada/quebec/
[2] https://www.theglobeandmail.com/business/article-air-canada-ceo-sets-off-firestorm-in-quebec-over-language-comments/
[3] https://igopp.org/wp-content/uploads/2023/01/Companies-should-disclose-board-members’-spoken-languages-to-investors-Quebec-group-Médac-says-The-Globe-and-Mail_December-2022.pdf]]></content>
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		<item>
		<title>The Age of ESG: new issues for corporate governance ?</title>
		<link>https://igopp.org/en/actionnaires-et-parties-prenantes-quelle-gouvernance-a-venir/</link>
		<comments>https://igopp.org/en/actionnaires-et-parties-prenantes-quelle-gouvernance-a-venir/#respond</comments>
		<pubDate>Sun, 09 Aug 2020 18:01:18 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
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		<guid isPermaLink="false">https://igopp.org/actionnaires-et-parties-prenantes-quelle-gouvernance-a-venir/</guid>
		<description><![CDATA[For 40 years or so, corporations listed on stock markets were expected to pursue diligently, if not exclusively, value creation for their shareholders. A number of factors had pushed corporations away from an earlier “stakeholder model,” prime among them the revolution in executive compensation. Then, in the new century, a perennial criticism of business corporations [&#8230;]]]></description>
		<content><![CDATA[For 40 years or so, corporations listed on stock markets were expected to pursue diligently, if not exclusively, value creation for their shareholders. A number of factors had pushed corporations away from an earlier “stakeholder model,” prime among them the revolution in executive compensation.

Then, in the new century, a perennial criticism of business corporations and “capitalism” suddenly took on new urgency, with the capitalist system being held responsible for the wealth and income inequality it produces and the environmental havoc it has wreaked. This time around, though, the complaints did not issue from some leftist organization but from the very heart of the system, from large institutional shareholders who have recently converted to the church of ecological sanctity and social responsibility. In this new view, corporations should henceforth be accountable for their financial performance, yes, but also for achieving set targets in matters of environment (E), society (S) and governance (G). The ESG triplet, tacitly fostering a “stakeholder” doctrine on corporations, has created new challenges for corporate governance.

A year ago, this revised doctrine received a surprising endorsement when 181 CEOs of large American companies signed on [1] to a new “purpose” for the corporation: a fundamental commitment to all of our stakeholders (customers, employees, suppliers, communities and shareholders). “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.” 

So, institutional funds and others now require specific ESG action plans, target metrics and linkage of executive compensation to these metrics.

But there are unresolved issues with this “stakeholder” model of the corporation:

When the interests of various stakeholders are divergent, how should the interests of the corporation be understood? How should the board proceed in determining a fair trade-off between the interests of various stakeholders and which of them are entitled to such consideration? 

A second concern: How are business corporations to cope with ESG demands when facing tough competitors, domestic and international, who are not subjected to these same pressures? A recent study shows that activist hedge funds treat ESG targets as a signal of management’s less than absolute devotion to shareholder interest. Firms spending more than average on corporate social responsibility activities have double the probability of being targeted by “activist” hedge funds.

At a more fundamental, philosophical, level: Should ESG targets go beyond what government regulations call for? In a democratic society, is it not, rather, the role of governments, elected to protect the common good and represent the general will of the people, to regulate business corporations so as to achieve society’s social and environmental goals? But, perhaps the recent ESG focus and re-discovered “corporate purpose” are but maneuvers to fend off popular pressures on governments to impose stringent regulations.

In any case, the achievement of ESG targets will require changes in management incentives. Executive compensation in its current format is in large part linked to financial performance, with major components highly sensitive to stock price. Linking compensation to some ESG targets will call for re-tooling the way executives are compensated, a difficult task. In 2019, 67.2% of S&#38;P/TSX 60 firms incorporated at least one ESG metric in their incentive plans, but only 39.7% related to environmental factors. Some 90% of the firms include ESG metrics in their annual executive incentive programs but rarely in their long-term incentive programs. Willis Towers Watson also noted in a recent study that only four per cent of S&#38;P 500 firms used ESG metrics as part of their long-term incentive awards.

Finally, if a company is to be stakeholder-driven, why only shareholders get to elect board members? That nagging question may come to haunt some of the promoters of the “stakeholder model” as it opens the door to board membership by other stakeholders, such as employees. It may not be what the institutional funds had in mind when pushing their ESG agenda.

A sharp debate is now raging (in academia at least) about the pros and cons of the stakeholder model. Be that as it may, in the business world, the relentless pressure from investors has converted most corporate management and boards of directors to the ESG religion despite many unresolved issues.

&#160;

Opinions expressed herein are strictly those of the authors.

[1] https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans]]></content>
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		<item>
		<title>Corporate Governance in the post-pandemic world</title>
		<link>https://igopp.org/en/corporate-governance-in-the-post-pandemic-world/</link>
		<comments>https://igopp.org/en/corporate-governance-in-the-post-pandemic-world/#respond</comments>
		<pubDate>Fri, 01 May 2020 15:42:27 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[News Articles]]></category>
		<category><![CDATA[Crise financière]]></category>
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		<guid isPermaLink="false">https://igopp.org/corporate-governance-in-the-post-pandemic-world/</guid>
		<description><![CDATA[Human beings are wonderful amnesiacs, an observation grounded in the history of traumatic events which have faded gradually into oblivion. That may well be the case with the current pandemic. For instance, how did societies, corporations and their governance system cope with recent dramatic events (so called “Black Swans” or for the more statistically inclined [&#8230;]]]></description>
		<content><![CDATA[Human beings are wonderful amnesiacs, an observation grounded in the history of traumatic events which have faded gradually into oblivion. That may well be the case with the current pandemic.

For instance, how did societies, corporations and their governance system cope with recent dramatic events (so called “Black Swans” or for the more statistically inclined “Six-Sigmas” events, although many would rightfully question whether these were really “Black Swans”)?

Take the financial/economic crisis of 2007-2008. Few sequels remain. Regulations of the financial sector were enhanced somewhat, banks had to increase their capital, executive compensation was “subjected” to an advisory “say-on-pay” vote by shareholders and some of the most outrageous financial speculations were curtailed. But overall, not much has changed despite the panic and dread at the time when many knowledgeable observers and actors feared a total collapse of the world’s
financial and economic system.

But 9/11 is a different story. Although located in New York, the event has brought about lasting, dramatic changes on an  international scale. Air travel was never the same after 9/11. States and government have increased permanently their authority and means to surveil and control societies and the worldwide flow of communications. Some individual freedoms were sacrificed on the altar of security with the consent (?) of the citizenry.

As the current pandemic has a much broader and deeper impact, the 9/11 scenario offers a weak template for what will happen when the pandemic begins to fade away: greater control on citizens’ behavior, close monitoring of all movements through instant communications, government-issued safe-conducts to gain access to any public event. Constitutionally protected individual freedoms will be infringed upon by a State/medical bureaucracy determined to protect us at all costs. All of these coercive measures will be promoted, and accepted, as essential to avoid a recurrence of some form of pandemic.

This painful experience will also foster some changes of a social/political nature: the work arrangements adopted during the crisis will call for a critical re-thinking of the standard pattern of commuting/office work/in-person meetings with colleagues. The resulting reduction of “polluting travel” will be hailed by all environmentalists despite the “irrelevant” cost of anomie, social isolation and estrangement.

The inevitable quest for greater self-sufficiency in many areas (food, pharmaceuticals, etc.) will bring about different industrial policies as well as a renewed skepticism about “globalization” and its supposed benefits. But this latest crisis may also generate a lasting anxiety and a sense of vulnerability in large segments of the population, who will subject all their public activities to the imperatives of total safety.

The role and responsibility of boards of directors

1. Coping with uncertainty

Even if 9/11 or the 2008 financial crisis may not fully qualify as Black Swans, for most corporations these events were unexpected and unplanned for. Corporations were taken by surprise and had to improvise some response. After the 2008 financial crisis particularly, most boards have enhanced their role in risk monitoring and risk mitigation.

But, boards have to cope with uncertainty, not only risk. Uncertainty is different from risk because there is no probability estimate of the occurrence of uncertain event within a given time frame, no way to predict the likely occurrence of a “six-sigma” event. The typical “predict-and-prepare” approach of risk management system and process does not work.

There are always “clairvoyants” who claim, with some justification, that they had foreseen the catastrophe. But how often had they been wrong in the past?

So what is a board to do? To ask management to list all unlikely dramatic events to which a corporation may be vulnerable and prepare contingency plans for each would paralyze any organization. A bank executive claimed recently that his institution had planned for “all” contingencies (nuclear attacks, fires, hurricanes) but had never foreseen a pandemic (Richard Dufour, La Presse, April 25th 2020). What about tsunamis, 9.0 earthquakes, an asteroid hit, etc.?

In an uncertain world where unpredictable and uncontrollable events may have catastrophic consequences, a board of directors must call upon management to hoard strategic and financial resources, build redundancy, and increase the corporation’s flexibility and adaptability to uncertain events. (See Allaire and Firsirotu, Coping with Strategic Uncertainty, Sloan Management Review)

Coping with uncertainty means:

 	maintaining an acute sense of the firm's vulnerability;
 	experiencing the future as largely unknowable; and
 	considering the firm’s survival to be dependent on organizational flexibility, on building buffers and redundancy and on hoarding strategic and financial resources.

No doubt such measures will have a short-term impact on earnings per share, on return on assets, on optimal capital structure. But that is the cost of some preparedness to cope with uncertain events.

2. Designing the organization for a new set of circumstances

There will be a decisive relaxation, even rejection, of the neo-liberal framework which has defined the functioning of societies and large corporations for decades: the expectation of continuous growth in earnings per share; the cost-driven global search for the locations of cheapest labor where to farm out operations; the massive creation of income and wealth inequality; the indecent enrichment from financial speculation and legerdemain, from activities with little or no social value; the tradeoffs between debt, deficits and social expenditures with the former having a distinct priority over the latter.

Boards of directors should heed the early warnings of impending disturbances of a political and social nature. They may be harbingers of the next flock of black swans. If boards do not effectively handle expectations, they should expect governments, now flush with power, to take actions about work arrangements, executive
compensation, sharing of wealth, punitive taxation for outsourcing, and so forth.

Contrary to what one might have expected given the serious financial issues that will be faced by many business corporations, the recent infatuation of large institutional shareholders with ESG (Environment, Society, Governance) drivers and its corollary, the stakeholder model of the corporation, will not abate. Too much wind in those sails and the pandemic will push further for compliance by publicly traded corporations.

It behooves management and boards of directors to act pre-emptively in five areas:

 	Monitor and enhance the corporation’s self-sufficiency in critical supplies within the home country;
 	Review and re-assess all past decisions to outsource and off-shore operations to low-cost countries;
 	Design work arrangements to adapt to the circumstances post pandemic as well as to the people’s legitimate quest for balance, couple burden sharing;
 	Cut the Gordian Knot of executive compensation; examine the form and level of compensation so as to reduce the gap and set an acceptable ratio of top management compensation to the salary of the median employee;
 	As most large institutional funds have become advocates of ESG, make clear to shareholders what this emphasis and the above adjustments will mean for the management and performance of the company in the future.

The powerful forces of continuity, habits, and normalcy may bring us back to the status quo ante. We may wake up from this nightmare unscathed. Perhaps! But a board of directors should not take this happy ending for granted.

&#160;

The authors are solely responsible for the opinions expressed in this article.
]]></content>
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		<title>What was the story behind SNC-Lavalin&#8217;s supposedly &#8216;excellent&#8217; corporate governance regime?</title>
		<link>https://igopp.org/en/nota-bene-what-was-the-story-behind-snc-lavalins-supposedly-excellent-corporate-governance-regime/</link>
		<comments>https://igopp.org/en/nota-bene-what-was-the-story-behind-snc-lavalins-supposedly-excellent-corporate-governance-regime/#respond</comments>
		<pubDate>Thu, 21 Mar 2019 23:16:18 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
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		<description><![CDATA[Excerpted and translated from “Le fiasco SNC-Lavalin: crime, culture, governance?” by Yvan Allaire, executive chairman of the Institute for Governance of Private and Public Organizations, published in Policy Options March 18, 2019.  The tragedy of SNC-Lavalin was in the making between 2000 and 2012. To outside observers, these were years of quiet profitability for the [&#8230;]]]></description>
		<content><![CDATA[Excerpted and translated from “Le fiasco SNC-Lavalin: crime, culture, governance?” by Yvan Allaire, executive chairman of the Institute for Governance of Private and Public Organizations, published in Policy Options March 18, 2019. 

The tragedy of SNC-Lavalin was in the making between 2000 and 2012. To outside observers, these were years of quiet profitability for the company. And yet, these years were teeming with fraudulent and corrupt activities carried out by some managers and executives of SNC-Lavalin. For reasons that are little understood (but should be), a culture of duplicity, greed, and flouting of ethical norms had taken root in the management of the company — with the board of directors totally unaware, it seems.

Yet at the time, SNC-Lavalin was highly rated for the quality of its governance. According to the annual ranking of some 250 Canadian companies for the quality of their governance published by The Globe and Mail, SNC-Lavalin got top ranks: 1st in 2005 and 2009, 2nd in 2006, 3rd in 2008, 7th in 2003, 2011 and 2012. How could it be that such “excellent” corporate governance did not detect any sign of malfeasance nor trigger any alarm?

All boards of directors rely on the information that is passed on to them by management, which is assumed to be honest and reliable. That is the Achilles heel of governance.

So, if management lies to the board or provides false information, how can the board be blamed? This argument, although legally valid, is not fully satisfactory. What could SNC-Lavalin’s board of directors have known? What questions should have been asked of management of the company at the time?


For instance:



— Who decides, and on what basis, to seek contracts in countries with exotic political mores?

— Who has the authority to approve sales agent contracts and assess that the amounts paid to them are appropriate?

— How does the company manage to be so successful in these countries?

— What is the opinion on these matters of the seven (out of 12) board members who indicated on the Skills Matrix that they “are familiar with the geographic areas where the company operates”?

The board of directors at the time may have raised these issues and management might not have been forthcoming. Except for its somewhat limited curiosity, the board observed all the rules of “good” governance (according to The Globe and Mail). Boards of directors, in the traditional form of governance, are always a bit like skaters making arabesques on a frozen lake, unaware of the teeming activities under the ice. This form of governance must be changed…

Has the company sacked or sued all the managers responsible for this corrupt culture in the years 2000 to 2012? The Canadian anti-corruption law makes that a key factor in deciding whether to come to a deferred prosecution agreement with an indicted company.

If no such factors can be invoked, it is difficult to understand why the prosecutors of the Canadian justice department refuse to come to an agreement with SNC-Lavalin.

Indeed, the Canadian anti-bribery legislation should be modified and stipulate that a corporation is liable to criminal charges if its board of directors has authorized or endorsed criminal acts or failed to put in place all necessary safeguards and exercise appropriate oversight of management. However, this argument has not been raised so far in the present case.

Read more [1]

[1] https://business.financialpost.com/opinion/nota-bene-what-was-the-story-behind-snc-lavalins-supposedly-excellent-corporate-governance-regime]]></content>
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		<title>Why Quebec sees SNC-Lavalin as an asset, not a liability</title>
		<link>https://igopp.org/en/why-quebec-sees-snc-lavalin-as-an-asset-not-a-liability/</link>
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		<pubDate>Thu, 14 Feb 2019 18:44:16 +0000</pubDate>
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		<description><![CDATA[In Ottawa, there appears to be little sympathy these days for SNC-Lavalin, the giant engineering corporation facing prosecution for bribery schemes in Libya. The company was hoping to strike a deal with federal prosecutors in order to avoid a trial. If guilty, it would be cut off from lucrative Canadian government contracts for a decade. [&#8230;]]]></description>
		<content><![CDATA[In Ottawa, there appears to be little sympathy these days for SNC-Lavalin, the giant engineering corporation facing prosecution for bribery schemes in Libya.

The company was hoping to strike a deal with federal prosecutors in order to avoid a trial. If guilty, it would be cut off from lucrative Canadian government contracts for a decade.

But since it was alleged last week that the Prime Minister's Office had pressured then attorney general Jody Wilson-Raybould [1] to allow SNC-Lavalin to sidestep prosecution, few federal politicians have been willing to stick their necks out for the company.

In Quebec, however, where it has operated for more than 100 years, SNC-Lavalin has a chorus of defenders that include the premier, the Opposition and pundits.

[ ... ]

Too big to fail?

Once the undisputed king of the province's engineering firms, SNC was overtaken in market capitalization last year by Montreal rival WSP.

The company's involvement in a number of corruption cases has been the longest-running cause for its loss of lustre.

"The reputation of SNC-Lavalin is much weaker today than it was 10 years ago because of the poor policies of its board [of directors]," said Michel Nadeau, head of the Institute of Governance.
Along with the allegations of bribery in Libya, SNC executives were implicated in a 2009 bid-rigging scheme to build a Montreal hospital [2].
The company is also serving a 10-year ban on World Bank contracts for its involvement in corruption in Bangladesh.

And the RCMP is currently investigating [3] the possibility executives were aware of bribes paid between 2001 and 2003 to secure a $127 million contract to refurbish the Jacques Cartier Bridge in Montreal.

But Nadeau said the company has moved on since then under the leadership of current CEO Neil Bruce and a new board that is more committed to governance oversight.

He said he was puzzled at the unwillingness of federal prosecutors to use the deferred prosecution agreement, which would have allowed SNC to pay a fine in exchange for avoiding a trial.


 'When you have that critical mass you should be able to weather storms,' Economy Minister Pierre Fitzgibbon said when asked if SNC-Lavalin was too big to fail. (Jacques Boissinot/Canadian Press)


"Many countries in the world have these types of agreements for companies involved in foreign bribery," said Nadeau, a former executive at the Caisse de dépôt.

"Unfortunately, the corporation is being punished, and it is its 50,000 employees — many of them Canadians — who are being penalized."

Read more [4]

[1] https://www.cbc.ca/news/politics/jody-wilson-raybould-timeline-1.5016755
[2] https://www.cbc.ca/news/canada/montreal/pierre-duhaime-snc-lavalin-1.5000518
[3] https://www.cbc.ca/news/canada/montreal/snc-lavalin-still-under-investigation-from-rcmp-in-quebec-1.5016315
[4] https://igopp.org/wp-content/uploads/2019/02/Why-Quebec-sees-SNC-Lavalin-as-an-asset-not-a-liability-_-CBC-News_Février-2019.pdf]]></content>
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		<title>&#8216;It’s sad&#8217; no one asked questions while SNC profits soared: Ex-Caisse exec</title>
		<link>https://igopp.org/en/its-sad-no-one-asked-questions-while-snc-profits-soared/</link>
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		<pubDate>Thu, 14 Feb 2019 16:19:39 +0000</pubDate>
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		<description><![CDATA[The long series of scandals ensnaring SNC-Lavalin Group Inc.  has one former executive of the Caisse de dépôt et placement du Québec calling for more accountability when it comes to corporate bribes for global contracts. Michel Nadeau, a former deputy chief executive of Caisse – the largest shareholder in SNC – told BNN Bloomberg on [&#8230;]]]></description>
		<content><![CDATA[The long series of scandals ensnaring SNC-Lavalin Group Inc.  has one former executive of the Caisse de dépôt et placement du Québec calling for more accountability when it comes to corporate bribes for global contracts.

Michel Nadeau, a former deputy chief executive of Caisse – the largest shareholder in SNC – told BNN Bloomberg on Wednesday that when he left his role in 2003, the Quebec pension fund was not aware of any corruption or fraud activity related to SNC’s construction projects in Libya at the time.

Nadeau noted that under former SNC chief executive Pierre Duhaime, who pleaded guilty Feb. 1 for his role in a bribery scandal [1] around the construction of a Montreal hospital, the company’s average profit rose substantially.

“When you double your profits, shareholders, directors – they will never ask, ‘Why are you doubling the profits? What is the secret?’” said Nadeau, now executive manager with the Institute for Governance of Private and Public Organizations in Montreal.

“It’s because you have contracts which are much more profitable than your usual activity. Nobody is raising questions on how you’re making much more profits. And it’s sad, but we should be aware.”

SNC’s average profit from 2006 to 2008, three years prior to Duhaime becoming president and CEO in 2009, was $208 million. Between 2009 to 2011, with Duhaime at the helm, the company’s average annual profit nearly doubled to $404.95 million.

In February 2015, SNC and two of its subsidiaries were charged with paying nearly $48 million to public officials in Libya between 2001 and 2011 to influence government decisions. The RCMP has also charged the company, its construction division and a subsidiary with one charge each of fraud and corruption for allegedly defrauding various Libyan organizations of roughly $130 million. If found guilty, SNC could be barred from bidding on federal contracts for a decade.

Nadeau added that SNC’s past practices followed many other large engineering firms that pay bribes, which has led some Canadian companies like WSP Global Inc. to focus its business in developed countries.

“Unfortunately, it is a reality,” he said.  “I think if you look at large French, German, American corporations, you have to do this if you want to have access to contracts.”

“So that’s why if you want to go into emerging countries, unfortunately in some of them – not all of them – you have to give bribes.”

To access this interview, please click here. [2]

[1] https://www.bnnbloomberg.ca/former-snc-lavalin-ceo-pierre-duhaime-pleads-guilty-in-bribery-case-1.1207899
[2] https://www.bnnbloomberg.ca/it-s-sad-no-one-asked-questions-while-snc-profits-soared-ex-caisse-exec-1.1214272]]></content>
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		<title>On becoming an «activist board»&#8230; In the age of activist shareholders</title>
		<link>https://igopp.org/en/on-becoming-an-activist-board-in-the-age-of-activist-shareholders/</link>
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		<pubDate>Mon, 12 Jun 2017 19:57:55 +0000</pubDate>
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		<description><![CDATA[After some 15 years of tweaking and polishing the theory and practice of “good” governance, perfectly independent board members remain surprise-prone, estranged from the goings-on in the company, partially informed and lacking the wherewithal to challenge management. No doubt that the legitimacy and credibility of boards have suffered as a result. In the current age, [&#8230;]]]></description>
		<content><![CDATA[After some 15 years of tweaking and polishing the theory and practice of “good” governance, perfectly independent board members remain surprise-prone, estranged from the goings-on in the company, partially informed and lacking the wherewithal to challenge management. No doubt that the legitimacy and credibility of boards have suffered as a result.

In the current age, institutional shareholders have all become “activist” investors. Some funds make it their mission to push aggressively on boards of directors to implement measures that they (the activists) deem likely to boost stock prices. Other funds may be less vocal and less aggressive but will support the “activist” funds as well as put forth their own expectations in private meetings with management and the boards.

Boards will have to raise their game, move to a value-creating sort of governance. Corporate boards of the future will have to also become “activists” in their quest for information, their willingness to stand up to short-term pressures and their ability to question management’s strategies, compensation and performances.

This book proposes a “revolutionary” form of governance building on some of the steps taken by the more thoughtful boards: more involvement in strategy making, creation of ad hoc committees, more substantive training for board members and their extensive exposure to all facets of the business, independently sourced information transmitted to board members, etc. But that does not suffice, as this book demonstrates.

Getting to a more effective form of governance will call upon unusual, even controversial, measures by boards. It will also require institutional investors to change a number of their policies and practices and for governments to level the playing field.

This book makes, we believe, a forceful case for a different kind of governance system capable of delivering long-term value to all stakeholders and to society at large.
]]></content>
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