Board of Directors: You’re Among Friends

If I say “economic elite in Quebec,” who comes to mind? Media mogul Pierre-Karl Péladeau, more commonly referred to as PKP? The Desmarais family, at the head of Power Corp? Maybe former Caisse de Dépôt CEO Michael Sabia? The names Robert Chevrier, André Bérard, or Michel Labonté probably never crossed your mind. That’s perfectly normal: you’ve never heard of them.

Despite not being household names, they are very influential in Quebec. Their work is done in the shadows as board members for listed companies. IRIS’s most recent publication tries to trace the contours of a tightly knit network in which the same people come up over and over again. So… who are the top board members in Quebec?

To draw up our ranking, we started with the top 30 listed companies in Quebec. We then found the names of all their board members and tried to figure out how these people were connected to one another and through companies. We then drew a list of 37 individuals who stood out as having the most influence. On average, they currently serve on three listed-company boards in addition to those of three other companies that are not listed.

Community of interest and boys’ club

This list of names leads to a number of findings. First, influential individuals are surprisingly alike. To everyone’s surprise (…), they are mostly white men, aged 65 on average. They include a high concentration of accountants and lawyers. Diversity does not seem to be on their agenda.

Their trajectories are also rather similar. Nearly half have held office in the public sector, be it as high-ranking official, a member of an advisory committee or as an elected official. The revolving door phenomenon can also be observed when examining the other companies to which these individuals are connected. Throughout their career, the number can be as high as 13. And it goes without saying that these corporations are not limited to a single industry.

Let’s take Robert Chevrier, the most influential person according to our ranking. He served on the boards of hardware chains Rona and Richelieu, tech firm CGI, Bank of Montreal and publishing company Transcontinental, to name but a few. Even though these corporations cover very different areas, he states that “a bank is a distribution business and so is a supermarket“.

In short, we can manage pretty much everything in the same way since, in the end, everything can be reduced to distribution or to the allocation of resources. Feeding people? Lending money? Creating journalistic content? It all comes down to the same old “distribution business”. The same can be said of the public sector, in which directors are crossing over more and more from the private sector or circulating from one institution to the other as if a mega-hospital, Hydro-Québec, and a symphonic orchestra were all one and the same thing.

But I digress. Let’s return to the boards of listed companies. How are people picked to serve on boards? For starters, it helps to be part of the network. Afterwards, it all depends on the company’s needs. Does it wish to make acquisitions? Does it need cash or credit? Someone from a bank could be an important asset. Does it want to expand its market, to be able to sell its products to other companies? Then it’s best to find new board members from these other companies to optimize market integration. Does the company need to lobby the government? A former senior official or elected official would be best suited in that case.

It’s plain to see: good company management comes down to cultivating the right friendships. And as the head of the Institute on Governance, Michel Nadeau, himself puts it: “A board is a group of 15 people who talk straight, who speak frankly amongst friends, knowing that they will be making decisions.”

I rest my case.

Eve-Lyne Couturier is a researcher with IRIS, a Montreal-based progressive think tank.