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Chartered accountant, oilpatch executive, corporate director, and noted Calgary philanthropist.

Now Richard (Dick) Haskayne adds another title to the list: author. This month, he launched his book Northern Tigers, Building Ethical Canadian Corporate Champions . Written with Paul Grescoe, it is a self-described memoir and manifesto for change in Canadian business.

The book is a fond, frank and fulsome chronicle of the Canadian oilpatch through some of its most tumultuous years.

Mr. Haskayne was online earlier today [Monday, April 23] to take your questions and discuss some of the hurdles corporate Canada needs to overcome it it is to prosper now, and in the future.

Your questions and Mr. Haskayne's answers appear at the bottom of this page.

Mr. Haskayne is a highly-respected member of Alberta's oil and gas industry, and a leader in business education and the promotion of high ethnical business standards.

In 2002, the Faculty of Management at the University of Calgary was renamed the Haskayne School of Business in recognition of his many contributions to the university and the greater business community.

He has served a wide range of organizations including the University of Calgary, the United Way, the Canadian Cystic Fibrosis Foundation, the Olympic Trust of Canada, the Alberta Children's Hospital Foundation and numerous southern Alberta arts organizations.

Mr. Haskayne was born and raised in Gleichen, Alta. Recently, he and his wife Lois donated 37 hectares of riverbank land near Bearspaw for a new city park. The land, along with land purchased from the University of Calgary and originally donated by the couple to the University of Calgary in 2002, will be known as Haskayne Park.

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Cathryn Motherwell, deputy editor, Report on Business: Welcome Dick to the new ReportonBusiness.com. We're delighted to have you join us today with our new look. I have enjoyed reading your book over the past week, and am impressed with the candor and openness you brought to the story-telling. It's also impressive that you are staking out very firm ground in the area of corporate governance, and perhaps we could start with that. What do you think are the most critical governance issues facing Canadian companies at this point in time?

Dick Haskayne: Cathryn - Thanks for the opportunity to participate in this unique interview process. As a person who is technologically incompetent, this is a unique method of communication and we will attempt to do our best to make the process successful. Special thanks for reviewing the book at this early date.

In so far as the first question is concerned - about the critical governance issues facing Canadian Companies - we are well on the way to superior governance procedures in Canada, compared with other countries in the world including the US. We can't be smug, but comparing the procedures of some of the major companies I have been involved in Canada,compared with Weyerhaeuser (where I have just retired as a Director) one of the oldest and most ethical and best managed companies ins the US, I believe that we have the edge. Let me give you a couple of examples:

The first is one of the most important and effective governance principles is the split of of the roles of Chairman and CEO. In Canada, the majority of large Canadian Companies have complied with that structure whereas in the US, I believe only about 10% have made the split. Despite my encouragement as a member of the three person executive committee of that 107 year old company that the split would be beneficial.

I have some comfort now that they at least (at Weyerhaeuser) have identified the other independent member of our Executive Committee as the Lead Director who now chairs regular in-camera meetings without the participation of the CEO - this may sound like a breakthrough because we have been doing that in Canada for many years as a regular governance process.

Another sensitive issue for Weyerhaeuser and a number of other major companies in the US is a Staggered or Classified Board, which they deem a takeover protection and even though shareholders have voted to change that bylaw management and the other 11 members of the board have not seen fit to change.

Another issue that is now mandatory under SOX is the review of quarterly financial statements which up until recently was not in their process and one we had been implementing in Canada for many years.

In general I think the biggest challenge facing Canadian compainies is to have a Board with a wide array of talents who can provide balanced and well informed decisions and have the courage to make tough decisions with respect to executive compensation and other high profile items as they occur.

F. Wm. Woodward from Calgary asks: We recently had a situation where a Lawyer stated he would not be in conflict nor prohibited from becoming a Director of our Company even though his firm acts for us. If this is the case then why are Chartered Accountants treated differently?

Dick Haskayne: In my view, most major public companies do not have have their outside legal advisors on the Board even though in earlier times it was almost a tradition that a top partner member of a outside legal firm was given a seat on the Board. I agree that there is no need for that and in fact, it is hard to determine that they could be independent. Accordingly, it seems that CA's who are auditors of the company would also not be considered independent members of the Board. This is not to say that in general, Lawyers and CA's do not make good Board members, but it is important that they do not have a conflict of interest by virtue of doing work for the firm in their other professional capacities. This guidline would also apply to other professional as well.

Cathryn Motherwell: A short question, that I know will have a long answer. But could you please talk about your seven benchmarks for success?

Dick Haskayne: The full thesis is on our web site at www.haskayne.com - but I could give you a bob-tailed version.

The seven benchmarks are:

Family

Friends

Finances

Career

Health

Infrastructure

Reputation

In summary, each of the benchmarks is self-explanatory but in my speeches I try to explain them in a little more detail. Perhaps the one that needs the most explanation is what I mean by Infrastructure. That term is simply used to be all encompassing - to make people understand and appreciate the support systems they have or for that matter, don't have. Some people would describe that as your community support mechanisms - meaning family, friends, neighbors, clubs, church and other relationships built up over a number of years. The reason for the emphasis on this is that most people don't realize how important these relationships are to their success. In particular, when people retire, they often move away from their infrastructure with negative results. Recent studies have shown that your social network in many cases is more important that your financial underpinning or even your health. Accordingly, people should pay attention to the net-works they develope throughout their business career because it is such an important element in defining their ultimate success.

The final benchmark is your reputation - because I believe when you leave this planet -the only thing you really leave behind is your reputation.

The reasons for developing these benchmarks is that in earlier times people would congratulate me on a success having seen my photo in the paper or they had read a salary disclosure. While the compliments were nice, I said that my definition of success was much broader that those two indicators because even though you may have had a high profile or made a lot of money, if you had done it at the expense of your family, your friends or your health, that diminished the apparent measure of success - if one compares only finance and position.

However, the most important element in your success is your reputation and this has now become evident as a result of the greed that has taken over the corporate world and has ruined the apparent "success" of many high profile corporate leaders.

My conclusion is simply - that unless you keep those seven benchmarks in balance you are not successful - by my definition.

Cathryn Motherwell: What are the biggest changes you have seen in Canada's oilpatch?

And what are the most important changes you've seen?

Dick Haskayne: I never would have believed that we would have had companies of the size and stature we currently have in Canada. They are covered in our "Northern Tigers " book and my basic message is that they have been created in the last ten years through clever strategies coupled by superb execution by management . Of course, the success has been helped with $60 oil and $8 gas. Some people may consider that luck on the pricing side, but frankly, some of the astute management teams had seen this coming and capitalized on that opportunity by purchasing assets at what now appears to be bargain prices.

The end result is that we have many "Northern Tigers" in the book including EnCana, Canadian Natural, Suncor, Talisman, Nexen and Husky. We have also, of course, had the major integrated companies that were part of the giants like Exxon and Shell. Of course, PetroCanada has emerged from a government controlled company to a very fine integrated company without a major share holder. With respect to pipe lines, TransCanada and EnBridge have emerged as the two strongest pipelines in North America whereas 10 years ago there were 5 big pipes who were larger and stronger than our Canandian Companies - that just did not happen by luck! It was a result of excellent strategies by the two companies coupled by great talent of the management and of course helped by the disastrous results of the major pipelines companies like Enron.

Cathryn Motherwell: What do you think about the increasing activism of investors — including the rise of really aggressive investors like hedge funds? Is this changing the boardroom? Will it improve governance?

Dick Haskayne: With respect to corporate activism — in most cases it has been healthy and constructive. The result has been directors have been more dedicated to making the tough decisions. The danger with activism is that in some cases their motives are not necessarily in the best interest of all shareholders and that may be a problem in the future. The best example in my experience has been at MacMillan Bloedel where 10 shareholders representing 40 per cent of the stock demanded changes in the board and that action pushed the directors to make changes in management and the direction of the company which turned out to be positive and which was perhaps overdue.

As we speak, Weyerhaeuser is facing a challenge from one of the large funds which has taken a substantial position and is pushing for a change in strategy and requesting changes to the board. The outcome will be apparent in the months to come.

In some cases I think that major funds could play a more important role in keeping some of the fine Canadian companies from being taken over by foreigners. A classic example of that is what was done at Nexen, where Ontario Teachers were involved in the restructuring of the company by taking out the American parents' controlling interests. This created one of the true "Northern Tigers." Another example is EnCana. In creating that company, the company that exists today would not have happened if we had not negotiated a private friendly merger between AEC and PanCanadian. If it had become apparent that either company was interested in a merger, I predict both companies would have been taken over by now. Using the EnCana example there may be other possibilities using such a technique and a good example might be the recent Inco/Falconbride situation.

Without criticism of the directors of Inco and Falconbridge, or for that matter, the big funds that might have played a role in encouraging such a different outcome. I could see the possibility of a merger between those two companies with substantial interest taken by the pension funds and the outcome would have retained a true "Northern Tiger" in Canadian mining rather than see both of them now controlled outside this country.

I may be dreaming in Technicolor, but I believe we must be more creative in attempting things like that because we have lost so many public companies and at the same time, some of these huge funds are developing of the size that they will need true Canadian public companies in which to invest.

With actions by the funds and co-operation with the corporate boards and perhaps coupled with the revision to legislation, we might find a solution to the apparent "hollowing out" of Canada. The whole purpose of "Northern Tigers" was intended to be positive and demonstrate that we can indeed develop global champions in Canada but we still need to do more to blunt the types of foreign takeovers we have seen in the past year. I certainly don't have all the answers but based on my long experience in this field, this is going to be my next mission in life — to see if there are not some better answers than we currently seem to have.

Dick Haskayne: It is true this is controversial for very good reasons — because the compensation levels in some companies have gotten totally out of line with the normal relationship to the average worker. In earlier times the average CEO made 40-times what the average worker did and now the numbers can range up to 400-times, which becomes ridiculous. There is a Blue Ribbon committee spending an enormous amount of time on this and their deliberations will be made soon and from my understanding they make a lot of sense and directors need to pay attention to these recommendations.

Dawn Tinling from Calgary writes: Mr. Haskayne, what is the biggest change you've noticed in the past ten years in how boards conduct their business?

Dick Haskayne: I have been blessed by sitting on Boards who have been leaders in governance as evidenced by the ratings provided by various groups and publications. As I had said in earlier comments, without being smug, corporate governance in Canada is on the leading edge compared with other countries in the world.

I guess the most significant change has been as a result of SOX legislation in the US for companies under the jurisdiction of the SEC. The types of internal controls to meet the SOX requirements and the presentation of financial statements using guidelines of "presenting fairly" rather than simply complying with generally accepted accounting principles are examples of more intensive efforts on behalf of directors.

The other important issue receiving more attention is ensuring corporate boards have a variety of talent and complimentary backgrounds to ensure that the best decisions are made on behalf of shareholders. In earlier times people were invited to the board because of their profile and their general knowledge of business. However, now, before an invitation is extended to a new director, it is done on the basis of what talents are required to fill voids in the knowledge of current board members. A current example: at TransCanada Corp., after making big investments in nuclear, it was decided we needed more talent with that knowledge and specifically recruited an outstanding individual from the U.S. with that background.

In the case of Weyerhaeuser, after the retirement of Bob Herbold, the former COO of Microsoft, we lost an outstanding expert in technology and the current search for a new director to replace him will place heavy emphasis on someone with similar technical skills.

Cathryn Motherwell: I am afraid that is all the time we have for today. Thank you Dick, for offering your insight into the way Canadian businesses are being run today and what needs to change in the future. And thanks to our readers for their questions and continued interest in holding corporate Canada to account.