There was a time in this country when bankers and civil servants signed on young and stayed put for life. If the stars and their intellectual, political and economic skills aligned propitiously, they reached the top. That's the way it was with Donald Fullerton who joined what is now Canadian Imperial Bank of Commerce at age 22, and retired four decades later as president and chair of the board.
Banking is all about assessing risks and calculating rewards in an effort to ensure that the interest you reap more than repays the risks you incurred in lending the bank's money. The trick is balancing between stinginess and profligacy, caution and foolhardiness. Being an astute judge of character and a visionary economist, however, can't insulate bankers from the financial land mines planted by previous administrations, or external calamities like real estate collapses, oil embargoes and global recessions.
That's when a banker's mettle has to morph from risk averse to risk management, a fancy term for writing down bad debts to get them off the balance sheet. Then there's human frailty: trustworthy clients who suddenly become megalomaniacs, or a banker's own rampant delusion that the market will continue to soar and the economy expand. That's why bankers, like demographers, are right until they are wrong. And usually when that happens, as in 2008, they are very wrong indeed.
By all those measures, R. Donald Fullerton, who died in Toronto on May 29 at age 79, was widely considered a good banker. The CIBC was ranked second when Fullerton stepped down as Chair and CEO in 1992; now it is fifth.
He took over the top job for the cleanup of Dome Petroleum and Massey Ferguson at home and Third World debt around the world; he stepped down about the time that Olympia & York and Enron went south. In between he had restructured the bank into three main banking divisions, flattened the hierarchy, steered the takeover of the venerable stock brokerage, Wood Gundy, an acquisition that took a long time to turn profitable, instituted a succession strategy, embraced customer service, technology, including credit cards and ATMs, and pro-active policies and practices to promote women to senior positions.
Few people will talk on the record about Fullerton, but most suggest that he was a transition figure helping to move the bank into the modern era, a process that some suggest was more cumbersome than reversing the venerable Queen Mary out of a tight berth. "He was a very good banker, no question about that," said Darcy McKeough, a former Ontario Cabinet Minister who was a member of the CIBC board for nearly 25 years, pointing out that Fullerton had "spotted" the problem with Olympia & York early on and had warned Paul Reichmann that he was "expanding too fast and too hard" in the late 1980s.
"He was probably the first modern bank CEO in that he recognized that being the chairman and chief executive officer of the bank was not a singular position, but that it was a responsible position, which depended on not just the chairman, but many others. Up until Don Fullerton, and I think this is true of the other banks as well, bank chairmen were the boss and the full boss. They ran the show, they had a board of directors who they tolerated, as opposed to recognizing that that is how they got there and that's how they stayed as chairman." Nowadays, of course, the CEO and the chair of the board are separate functions.
Hugh Brown, recently retired analyst with BMO Capital Markets was an analyst with Burns Fry during Fullerton's tenure as head of CIBC. "He was a real gentleman and a pleasure to deal with," said Brown describing him as a professional who "inherited a hand of cards that wasn't great" and who "got the bank through a difficult period," citing the real estate collapse of the late 1980s and the recession of the early 1990s, among other issues. "The CIBC has had a number of issues over the last 30 or 40 years and "he was one of the better stewards, but certainly he didn't have a lot of fun."
In an e-mail message, former CIBC board member Conrad Black said he had had "the opportunity to appreciate his high intelligence, astute judgment of people, banker's overview of almost all types of business, his thoroughness as a director, and his very lively wit," during the more than two decades the two men sat around the same board table.