Canadian Values and the Responsibility that Comes With Leadership

Kamal Hassan, Director, The South Asia Group Ltd., and Director, The Empire Club of Canada; Jessica Van Rooyen, Grade 12 Student, North Toronto Collegiate Institute; Reverend Douglas Kramer, Pastor, St. Philip's Lutheran Church, Etobicoke; John C. Koopman, Vice-President, Spencer Stuart, and Past President, The Empire Club of Canada; James S. Kinnear, President, CEO and Director, Pengrowth Management Limited; Beverly Topping, President and CEO, Institute of Corporate Directors; Sean O'Sullivan, COO, HSBC Bank Canada; Lisa A. Baiton, Vice-President, Government Relations, Environics Communications Inc., and Director, The Empire Club of Canada; The Hon. David Crombie, PC, OC, President and CEO, Canadian Urban Institute; John Stackhouse, Business Editor, The Globe and Mail; Raymond J. Protti, President and CEO, Canadian Bankers Association; and Byron C. Neiles, Vice-President, Legal, Regulatory and Public Affairs, Enbridge Inc.

Introduction by William Whittaker

A 1950's quote attributed to Charles Wilson, then President of General Motors Corporation and subsequently Secretary of Commerce in the administration of President Eisenhower, captured the ethos of the times. "What's good for General Motors is good for America." Business was in ascendancy after the devastation of the Second World War and the 1950s to the 1970s saw the development of the international corporation carrying on business in many countries. The investment community was mainly occupied with underwriting the investment offerings of established companies and most market scandals, at least in Canada, were related to business startups on our junior exchanges. Viola MacMillan's Windfall Mines and C. Powell Morgan's Atlantic Acceptance fiascos of the 1960s led to the establishment of the Ontario Securities Commission and the hegemony of today's investment industry regulation. The moral certitude of the time was that big business and its executives could do no wrong.

A watershed change occurred in the 1980s with the rise of the mutual fund industry when investment performance became the mantra of the investment community. Enterprising investment companies developed the buyout mechanism for underperforming companies which resulted in increasing debt burdens causing management to focus almost entirely on short-term returns to keep share prices high. Established companies also had to contend with the euphoria of the dot.com industry of the late 1990s where unheard of market valuations were placed on neophyte or concept dot.com companies. Likewise, the mantra of investment returns produced such outright frauds as Canada's Bre-Ex.

A more ominous development were the number of senior corporate executives in the United States who were charged and convicted of outright fraud or of manipulating the accounting records of their companies to enhance financial results. To name a few of the better known examples:

Bernard Ebbers of WorldCom fame where the loss to investors was $11 billion;
John Rigas's theft of $3.1 billion from Adelphia Communications;
Dennis Kozlowski's theft of $400 million from Tyco International; and
Andrew Fastow's manipulation of Enron Corporation's financial records.

The real tragedy was that Adelphia and Enron went bankrupt with employees losing their jobs and pension entitlements.

There were also black sheep in the investment community--for example, Frank Quattrone formerly of Credit Suisse/First Boston who was convicted of obstruction of justice, the same charge that sank that doyen of domesticity, Martha Stewart, at least for a while.

The reaction to all this inventive financial structuring and criminal activity in the senior echelons of American business has resulted in the growth industry of the first decade of this century--corporate governance and business ethics. The United States Sarbanes-Oxley Act and our milder Canadian version, while laudatory, are in many commentators' views placing a heavy compliance burden on issuers. It has meant increasing business for the legal profession and has led to a major restructuring of the accounting profession, as many mid-level accounting firms no longer do audit work, given regulatory demands, liability exposure and the prohibition from doing other work for their audit clients. What the proper balance is between regulation and its cost is today a raging debate.

This ongoing debate is now focusing on the importance of a senior executive's personal ethics and values, which cannot be legislated but must come from within. No doubt many of you read Monday's Report on Business article about the impact of executives lying on their personal resumes.

Our speaker today is a senior statesman of Canadian business who will speak to us about leadership and values in Canada from a wider perspective than my introductory remarks respecting the business community. Gwyn Morgan is from the big sky country of Alberta where these days optimism abounds and where people rightfully ride tall in the saddle. He is not from the navel-gazing East and has a clear view of what is right and what is wrong.

Mr. Morgan was the founding CEO of EnCana Corporation, which resulted from the 2002 amalgamation of Alberta Energy Company and PanCanadian Energy Corp. Prior to that, he was President and Chief Executive Officer of Alberta Energy Company which he joined at its inception in 1975. In January 2006, he assumed the role of Executive Vice-Chairman of EnCana, primarily as Advisor to Randy Eresman, its newly appointed President and CEO.

Mr. Morgan serves as the lead director of HSBC Bank Canada, a director of Alcan Inc. and SNC-Lavalin Group Inc. and a member of the Energy Advisory Board of Accenture Ltd. He is a member of the Board of Trustees of the Fraser Institute.

In 2005, Gywn Morgan was recognized as Canada's outstanding CEO of the Year and also as Canada's Most Respected CEO. He has received the Canadian Business Leader Award from the University of Alberta, the Ivey Business Leader Award from the University of Western Ontario, and the Strategic Leadership Forum President's Award.

Please join me in welcoming Gwyn Morgan, Executive Vice-Chairman, Encana Corporation to our podium today.

Gwyn Morgan

Three decades ago I joined a startup oil and gas company. On January 1, I stepped down from the role of CEO of North America's largest oil and gas exploration and production company. Some people ask me how it feels to have realized my dreams. To them I say: "How could a farm kid from a small, rural community even have had such dreams?"

So if it wasn't dreams, what was it that drove me forward on my journey?

Well, the first thing was my father, who possessed the capability, but not the opportunity to receive the education I was privileged to receive. His greatest dream was for his only son to achieve a better life than he and my dear, hard-working mother had.

And second was my innate curiosity, which meant I could never learn enough about the world around me. Those were the two biggest motivators that propelled me forward in life's journey. But we all know that success in life requires much more than God-given abilities and motivation.

How often do we see exceptionally talented people veer off course because of bad choices? We can all name someone from the world of sports, entertainment, business or politics who has veered off course destroying their own lives and those of people closest to them.

As well as ability and drive, I believe success in life's journey requires two other critical qualities: self-discipline, to stay on the course you choose and ethical values or moral compass, which directs you to make the right choices.

It's the ethical values component that I want to focus on today and more specifically the critical importance of high ethical values in the people chosen for leadership positions in our country.

I have been passionate about the importance of strong Canadian-headquartered enterprises, and about the importance of building a company upon a foundation of strong ethical values. So when people ask me what it is about my career in which I take the most pride, my answer is two-fold: the building of a flagship Canadian company that competes and ranks with the world's best, and the development of its moral compass--EnCana's corporate constitution. Our corporate constitution is a unique document that defines the character of the company, and the ethical and behavioural expectations of everyone who works for or with us. EnCana's constitution is an intrinsic part of life in the company. It's available online at www.encana.com and I think you'll find the 15 minutes or so to read it will be well worth your time.

Companies need strong values to "live long and prosper," to use a quote familiar to us, the now-not-so-young fans of Star Trek.

So do countries.

Last summer, as we planned to mark an important anniversary, my wife tallied up some 43 countries we had visited in just the last decade. Only a few of those countries offer a quality of life anywhere near what we enjoy in Canada. In fact, if you move outside North America, Europe, Scandinavia, Australia and New Zealand, how many countries can you think of that even come close?

The difference isn't our resources, or our education and health-care systems, and it's certainly not the weather. And it isn't just because we're a democratic country; there are many democracies that are not very desirable places to live.

No, it's all about values--Canadian values. It's the ethical foundation that our forefathers have built which defines what we love about being Canadian.

Our new prime minister, Stephen Harper, has defined Canadian values as freedom, democracy, the rule of law, human rights, free enterprise and compassion for those less fortunate.

The question is, at this point in our country's history, which of these values has been most under threat?

My answer is really a subset of the first one: freedom from corruption.

Corruption destroys the lives of people who live in countries where its cancerous tentacles strangle their hopes and dreams. It teaches the young that corruption is "natural" and you must "play the game." There are whole continents and sub-continents where corruption is so embedded that it's hard to see how it can ever be changed. In fact, throughout the world, countries free of corruption tend to be the exception, not the norm.

Transparency International (T-I) publishes the widely respected world corruption index. More than two-thirds of the 159 nations surveyed scored less than five out of 10 on the index.

At the top end of the index, Iceland, Finland, New Zealand, Denmark, Singapore, Sweden, and Switzerland were viewed as the least corrupt nations, receiving a score of nine or higher.

The report noted that some of the high-income countries that rank among the least corrupt nations, such as Canada and Ireland, have shown a marked increase in corruption over time. (Canada dropped to #14 on the index, and Ireland to #19. The U.S. ranked #17.)

"Corruption is a major cause of poverty as well as a barrier to overcoming it," said T-I chairman Peter Eigen in a statement released with the index. He goes on to say, "The two scourges feed off each other, locking their populations in a cycle of misery. Corruption must be vigorously addressed if aid is to make a real difference in freeing people from poverty."

And David Nussbaum, T-I's Chief Executive Officer, states that, "Corruption isn't a natural disaster: it is the cold, calculated theft of opportunity from the men, women, and children who are least able to protect themselves."

Ladies and gentlemen, as passionate Canadians who love our country, there can be nothing more crucial to the integrity and prosperity of our country than to protect Canada from the proliferation and acceptance of corruption.

Okay, I know that very few would disagree, so why am I choosing now as the time to make this passionate appeal?

The reason is my deep concern about what I call the "values drift," both at the personal/family level, and at the business/government level.

Examples of this values drift are pervasive in our society: there is Internet porn, a never-ending series of even more destructive drugs and mono-cultural street gangs. We see the attack on personal/family values with the ever-increasing violence and immorality of television and films. And we despair of the Hollywood and sports stars with no moral compass who are idolized by our young. We see a media which all too often reinforces the adulation of the dysfunctional. Equally alarming, the media all too often is quick to tear down Canadians who have lived their lives as ethical role models. The latest example is Wayne Gretzky, who has clearly stated his innocence. Yet the media frenzy continued with absolutely no factual evidence to go on.

In business, we hear of ethical transgressions which lower confidence in the very free enterprise system crucial to our standard of living.

Government corruption rocks the confidence of Canadians in the whole democratic process.

With these worrying trends threatening to erode the very ethical foundation upon which Canada is built, why aren't more Canadians speaking out, and what can concerned Canadians do?

First, we need to remember that, whether it's our family, our business, our community, or our country, we get the behaviour we tolerate. We must stand up and be counted if we believe there are limits as to what should be shown on television, or tougher treatments of drug pushers and violent street criminals.

And when it comes to business and government, we need to prosecute wrongdoers expeditiously.

But the other side of getting the behaviour we tolerate is getting the behaviour we demonstrate. And this is where every parent, every business person, every politician and indeed every concerned Canadian has a role to play.

Just as my ethical values reflect those of my father and mother, we all know there is nothing more important than exemplifying good ethical values as parents.

And when it comes to business and government, there is an especially heavy responsibility that comes with leadership--the responsibility both to exemplify strong values and to demand ethical behaviour from those we lead.

It is the small and large business enterprises of the country that essentially creates all of our wealth both for personal expenditures and government programs. Therefore, confidence in Canadian business is vital. It's up to Canadian business leaders to act as role models of strong ethical values.

If confidence in the integrity of business is important, then confidence in the integrity of government is absolutely crucial. And on this front, recent events in federal politics have touched new lows.

We have witnessed the party that governed our country over most of its history, embroiled in behaviour that is comparable to that of countries at the bottom of the world corruption index.

And if that wasn't enough, the same party ran attack ads which took the Canadian political process to unprecedented lows in civility, respect, and honesty.

We saw an orchestrated attempt to impugn a Canadian political leader whose integrity is beyond reproach and a person who openly honours Christian values, but respects all religions. A person whose modest home, wife from small town Canada, two much-loved kids (and cats) place him solidly in the middle class mainstream of Canadian values.

We saw a governing party torn apart by dissention and corruption, a party which alienated the West and fanned the flames of separation in Quebec, actually base its election campaign on convincing Canadians that it best represented "Canadian values" and that it could best preserve national unity. Well, at least a plurality of Canadians saw through the charade.

This was also an election where the leaders of two national parties seemed to adopt as their principal definition of Canadian values "we're not American."

How sad. How counterproductive. Canada has so much to be proud of, and I for one, want the leaders of our country to champion the best of what we are, not what we are not.

And you'd better believe that this kind of irresponsible behaviour by a Canadian prime minister drives the kind of mindless behaviour described by Vancouver Sun sport reporter Pete McMartin:

"U.S. sucks! U.S. sucks!" That was the chant from the crowd at the world junior hockey championship in Vancouver last month. Had it been Canada playing the Americans that might have been barely tolerable. But the Canadians weren't on the ice. Instead, it was the United States playing Russia, and the crowd was cheering not for the Russians but against the United States. The chanters weren't so much interested in a hockey game as scoring points against America the country, not the team."

Recent comments by our classy and thoughtful former ambassador to the U.S., Frank McKenna, are revealing when it comes to how hard these gratuitous attacks make the job of dealing with our closest neighbour and the country that we depend upon for 85 per cent of our trade: "There was a tone at the top that I think created an environment where a lot of Canadians and Americans felt there were a huge number of fundamental problems."

In other words, leadership does matter...

But the election's over, and Canadians need to move one. I am absolutely confident that a Stephen Harper-led government will not only stem the leakage from the measurement glass of national moral values, but also raise the glass to the level Canadians should expect from elected representatives.

Some people would respond by questioning how this could be when one of his first acts was to appoint a floor-crosser to cabinet.

On this point, I believe that the moral glass is more than half full, rather than half empty.

First, floor crossing is a tradition, which has persisted throughout much of the history of our country. While always surrounded by political controversy, it has never been considered morally repugnant by mainstream Canadians.

Where was the moral outrage in the media when two of the people who had actually run for the leadership of the new Conservative Party crossed to the other side? In the case of Belinda Stronach's last minute pre-vote gambit, which won her a cabinet seat, it was Stephen Harper who was ridiculed in the media for "losing" Belinda, while Paul Martin was made out to be the great winner.

Now when the shoe is on the other foot, Stephen Harper is accused of losing his moral compass. How different is the view when seen through blue glass rather than red.

If Canadians want to reexamine parliamentary tradition to eliminate floor crossing, let's have that debate. But let's not characterize its occurrence as a great victory of leadership one time, and immoral the next.

The other glass-is-half-full part of the new cabinet is that Stephen Harper acted as a statesman. Rather than saying to Vancouver (and Montréal)--"You didn't elect any members--too bad you're out of the game," he reached out to bring them in.

And, I might say, he chose two fine Canadians to represent these cities. That, I believe, is the real story that political pundits and reporters are completely missing.

So let's put politics aside and come back to my main theme. How do we learn to preserve the best of the values, which have made Canada a great place to live?

We know that values drive choices, and choices drive behaviour, and behaviour drives results. So what Canadian values do we most want to preserve?

Well, we've seen that some of what people have called "Canadian values" are actually behaviours that divide Canadians.

The last federal election saw leadership behaviours and tactics designed to deliberately pit region against region and country against country. Too often we see religious and community leaders using language, which pits culture against culture. Many of us are guilty of using counterproductive labels, for example, "left wing versus right wing," as if they defined some universal kind of values. Canadian core values must honour freedom, including:

Freedom of religion;
Freedom of speech;
Freedom of enterprise;
Freedom of movement; and
Freedom from discrimination.

This means that we must respect and honour our freedom to be different. But we must also strive to keep our differences from dividing us. We must all be Canadians first! This brings me to another "label" which needs to be better understood.

Canadians are justifiably proud of the rich and diverse ethnic and cultural backgrounds that have helped build our country. But we need to be careful that "multiculturalism" doesn't, in fact, become a value that divides, rather than a value that unites. This is a flashpoint topic in many western countries.

Recent riots in France and Australia are timely and troubling examples. It seems as if "multiculturalism" in these countries has created "sub cultures" bearing little relation to the mainstream culture and values of the country.

I quote from a recent article in "The Australian."

"Multiculturalism began and, until recently, was regarded by most Australians as a civilized concept to ease immigrants into their new environment.

"In Sydney it has been plain for at least a decade that, instead of ethnic communities living happily in the diversity of social pluralism, multiculturalism has bred ethnic ghettos characterized by high levels of unemployment, welfare dependency, welfare abuse, crime and violence.

"The social engineers responsible should have been well aware of the likely outcome, especially for young men.

"All the evidence from the numerous studies of similar ethnic ghettos in North America and Europe show they produce much the same result, whatever the colour or ethnicity of their inhabitants.

"Ghetto culture for young men everywhere is characterized by interpersonal violence, sexual irresponsibility, incomplete education, substandard speech, a hypersensitivity about being disrespected and a feckless attitude towards work.

"Multiracialism has been a success in contemporary Australia but multiculturalism has been an abject failure."

A very sobering analysis from Australia and one that residents of many Canadian cities will agree is not unique to the land down under. So how do Canadians celebrate our religious, ethnic and cultural diversity in such a way that it unites us around an over-arching Canadian identity? I believe that we must start by focusing on the core values, which led Canadians from so many countries to choose Canada to build their future.

I believe those include:

Respect for all religious and ethnic origins;
Respect for the laws of the land (and that also means rejecting attempts to use cultural background as an excuse for committing violence);
Intolerance of corruption and dishonesty;
Personal and economic freedom;
Equality of opportunity (not outcome); and
Pride in, and loyalty to, our country.

So, how do we rally Canadians around values that unite us?

Once again, it starts with the responsibility of leadership; leaders need to model the way, including:

Cultural community leaders;
Religious leaders;
Business leaders; and
Political leaders at all levels--mayors, premiers, and the Prime Minister.

I believe that individual Canadians must take responsibility for choosing leaders who live and model Canadian values that unite us. I believe that individual Canadians must reject those who try to gain popularity by using cultural differences as wedges, either to pry people apart, or as an excuse for violent crime or other behaviour which tears apart the fabric of our country.

I will close by going back to where I started, to the core value of freedom. Some time ago, one of our national publications asked several Canadians to finish the sentence: "I wish I had invented..."

Here was my reply. I wish I had invented freedom.

If I could have invented freedom, I would have decreed that all mankind would always be free:

To elect those who govern us;
To own what we earn;
To practice our religion and culture;
To own and enjoy property;
To conduct free enterprise with our fellow human beings;
To be responsible for ourselves;
To choose who teaches our children;
To travel where we want;
To choose who, where and when the illnesses of our body are treated;
To debate issues openly and honestly;
To have a government for the people rather than for the power;

And lastly, to have a government which limits our freedom only where necessary to ensure freedom from harm by the actions of other citizens, and the security of our country from the actions of those outside our country.

Long live Canada, glorious and free.

The appreciation of the meeting was expressed by Lisa A. Baiton, Vice-President, Government Relations, Environics Communications Inc., and Director, The Empire Club of Canada.