Canadian Council of Chief Executives Launches Corporate Governance Initiative

July 8, 2002

The Canadian Council of Chief Executives (CCCE) has launched a major new initiative on corporate governance. Co-chaired by Council Chairman A. Charles Baillie, Chairman and Chief Executive Officer of TD Bank Financial Group, and Council President and Chief Executive, Thomas d’Aquino, the Corporate Governance Initiative will lead to public recommendations this autumn.

“Canada’s business leaders must work together to champion a ‘gold standard’ of corporate governance, one that not only can enhance the performance of Canadian enterprises in an increasingly transparent and demanding environment, but also establish our country as the home of choice for well-run global enterprises,” said Mr. Baillie.

Mr. d’Aquino said that the current crisis of confidence flowing from high-profile accounting scandals and failures of governance has reinforced the need for the business community as a whole to take action. “If we want to prevent the policy pendulum from swinging back toward heavy-handed regulation and legislation, the onus is on us to prove to the public that Canadian companies will voluntarily move quickly and effectively to improve governance practices.”

The CCCE, formerly known as the Business Council on National Issues, has a long track record in corporate governance issues. In 1997, for instance, its study Jobs, Growth and Community: Large Enterprises at Work highlighted the increasing strategic importance of corporate citizenship and the growing influence of large institutional investors.

During 2002, the Council has renewed its focus on governance issues through a series of events:

• On April 9, the Council’s Spring General Meeting in Montreal featured an intense discussion of governance issues from which members concluded that collective as well as individual action would be needed.
• On May 30, the Council co-sponsored CEO Back to Campus 2002 with the Schulich School of Business at York University, which devoted an entire day to an in-depth review of governance issues and practices.
• On June 1, at a meeting of the A.T. Kearney Global Business Policy Council in Berlin, Mr. d’Aquino made the case for a governance standard aimed at ensuring responsible corporate behaviour worldwide.
• On June 25, Mr. d’Aquino chaired a panel on corporate governance at La ConfǸrence de MontrǸal that also featured Council members Robert Brown and Dominic D’Alessandro, chief executives respectively of Bombardier Inc. and Manulife Financial.

In launching the Corporate Governance Initiative, Mr. d’Aquino suggested that while market forces cannot prevent either bad judgment or criminal behaviour, they are increasingly effective at encouraging good corporate governance. “The technologies driving globalization have exposed companies to relentless scrutiny. Anything they do anywhere in the world can affect their reputation everywhere in the world with immediate consequences for share prices and executive compensation. Good governance makes good sense.”

Mr. Baillie warned that without a vigorous response from business leaders, the improper actions of the few could threaten the market-based policies that have been so effective in raising the living standards of the many. “Each of us must help to rebuild public confidence in our individual enterprises, in the collective integrity of the business community and in the continuing wisdom of a public policy approach that helps companies do what they do best: create employment and prosperity within vibrant communities worldwide.”

The Canadian Council of Chief Executives is the premier vehicle for enabling Canadian chief executives to engage in critical public policy issues both in Canada and internationally. The Council’s members head companies that administer in excess of $2.1 trillion in assets, have annual revenues of more than $500 billion and account for a significant majority of Canada’s private sector investment, exports, training and research and development.