Paul Tellier, left, and Dick Evans
KARL MOORE: This is Karl Moore, talking management for The Globe and Mail. Today I am delighted to speak to Paul Tellier, former [chief executive officer]of CN [Canadian National Railway]and of Bombardier, and Dick Evans, who just retired recently as the CEO of Rio Tinto Alcan.
Good afternoon, gentlemen.
DICK EVANSON: Good afternoon, Karl.
KM: Both of you have sat for a number of years on boards of directors. In fact, Paul, you sat on Dick's board. What is the role of the board of directors today? What do you see, Dick, as the role of the board? You are the chairman of the board for Abitibi Bowater these days, sitting on the board. What is the role of the boards?
DE: Yes, I sit on two boards now. One is AbitibiBowater and the other is CGI [Group] I like to say that I have the two extremes; I have one company in a growth sector with no debt and the other company in a declining sector with only debt. Each has huge challenges, of course, [such as]the opportunity of restructuring and turning around Abitibi- Bowater.
It is the largest pulp and paper maker in Canada and a leader in the world. It has good assets and good people and the ability to restructure that would be very rewarding, and that is something that we are working hard on doing. So they each have challenges, they are very different challenges.
I think that the board is there for governance, clearly; it is not there to run the company. It is not there to provide the management expertise, so therefore I think that you want a board that has diversity, that has analytical capability to probe, it has the ability to think beyond the day-to-day and continually challenge management to look to the future, because everything is pulling the CEO and his team to look at the day-to-day.
Left alone that is where the focus will be, so I think that a very important role of the board in applying its governance is in fact to cause the management team to look two years, three years, five years, 10 years out.
In fact, I think that if you look at some of the meltdowns that we had in some of the companies in the financial sector, there has been a lot of talk about 'where was the board?', and the lack of governance. What they were not doing is asking the question 'Is this sustainable? Is this same pattern going to repeat for the next two years, three years, and five years?' Had they asked that question, I think that they were well-enough informed to have reached the conclusion that it was not.
PT: A short anecdote, if you will allow me, Karl. Many years ago, over 10 years ago, Harrison McCain, one of the two founders [of McCain Foods]with his brother Wallace, invited me to join their board. Harrison said, "Paul, we have been running French fry companies all over the world; thirty of them, as a matter of fact. We do not need you to tell us how to run a factory. We expect two things from you." I think this is a direct answer to your question. "One, do we have the right CEO and the right people at the top of the organization? Two, is the company going in the right direction?" As a director, I have been sitting on boards since 1980, about 12 of them, and the more that I serve on these boards the more I realize how wise Harrison McCain was. This is what the role is, the fundamental role of a director - the overall strategy, and making sure that you have the right people for the right job at the right time.
KM: This has been Karl Moore, talking management for The Globe and Mail. Today, I have had the great pleasure of talking to Dick Evans, former CEO of Alcan and Paul Tellier, former CEO of government in some ways [as Clerk of the Privy Council from 1985-1992]and then CN and Bombardier. Thank you, gentlemen. I would love to do it again.
PT: Thank you.
DE: Thank you.