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David Beatty has worn a lot of hats: academic, consultant, director, senior executive in the Weston food empire, and economic adviser to Third World countries. But he has attained perhaps his highest profile as managing director of the Canadian Coalition for Good Governance, an activist group of large institutional investors. The happy warrior recently announced that, at 66, he is retiring from the coalition—but he'll hardly be sitting on the sidelines.

Why leave the coalition after being the first managing director?
When I took it on, I sat on a number of boards and had my teaching, but the coalition's founders ganged up and said, "You're the guy to do this." I guess my ego was big enough that I thought, "You may be right." I love larger policy, I'm quite entrepreneurial and innovative, and I know the field. After five years at the coalition, we've got something established, and I've got three grandkids. So there is no other excuse than simply saying, I want a little of my life back.

Are you leaving the field?
No, I still have a chair at the Rotman School of Management, where I run the Clarkson Centre for Business Ethics and Board Effectiveness. I'm staying in governance for sure, but from an academic point of view.

Will you write a book?
Now that I'm back full-time at Rotman, [dean] Roger Martin says, "You have to write a book on governance." I think it's going to be about the director of the future. Boards have to become more expert. We need more industry-specific expertise. The flyover at 50,000 feet, Mach 2, isn't going to pick up a lot, what with globalization of businesses and the competitive intensity. Also, there needs to be more talent management as we get into the knowledge economy. There are tricks at the board level to make that happen.

What legacy do you leave at the coalition?
The governance awareness of Corporate Canada is significantly enhanced because of the work we've done—because of our mere presence. It's, like, "Hey, Mr. Board, you are responsible to shareholders and, my gosh, here's a whole bunch of them, and they are all long-term. They care about your company. We'd like you to be more aware of that linkage."

Is there one big thing left undone?
Compensation is a continuing challenge—to find the balance between market dynamics and shareholder and employee sensibilities. We live beside the most exuberant financial market in the world, where they pay chief executives on average 250 times the "teller's salary." It will be a continuing pressure if you are hiring executives out of the U.S. or seeking to retain your own.

In this era of Conrad Black, isn't there the sense Canada is a pushover on corporate fraud?
You're absolutely right. We recently told the federal panel on a single securities regulator that, wherever they go on this issue, it doesn't solve the problem of criminal activity in a white-collar vein. It's astounding how huge a hole that is.

What do you think of dual-class shares, which give more votes to some owners than others?
The shareholders in the coalition would have the view that it should be one share, one vote, period. But I've throttled back on the potential of companies to add value through widely held boards. What you do get in the dual-class companies

is the guy going to work every day.

One of those guys, Frank Stronach, owns less than 1% of Magna but commands more than 60% of the votes. Is that a good thing?
He stands in a class by himself, and I don't deal with outliers. If you look at controlling shareholders like Rogers, Thomson, Weston, Southern, Jackman and Desmarais, their returns over the long term have far surpassed those of Jack Welch and Warren Buffett. You have other risks with dual-class companies: Somebody may run over you; you've got the mad King George III syndrome; and the idiot-heir challenge. But what you do get is individuals and families who are committed to their businesses and who go to work every day, in comparison with a drop-in board.

Are you ever going to retire?
No, I'm curious. I love teaching, I love learning, and being on a board is a huge privilege.