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On the morning of August 13, Brendan Calder was gripped with a sense of unease as he sat down for a board meeting at Coventree Inc., the financial company where he served as a director. Outside the boardroom's glass walls, the trading desk in asset-backed commercial paper - Coventree's bread-and-butter - was eerily still. Mr. Calder, a business school teacher and former financial services executive, had never observed such silence on a money market desk.

It was a "black swan" moment, concluded Mr. Calder, an adjunct professor at the Rotman School of Management at University of Toronto. On the day when Canada's market in asset-backed paper ground to a halt, he happened to be reading U.S. trader-academic Nassim Nicholas Taleb's book The Black Swan, The Impact of the Highly Improbable, which is about unpredictable events and how they trigger massive, history-making consequences.

The ABCP crisis, which had spilled over from the U.S. subprime mortgage crisis, had all the earmarks of an out-of-the-blue black swan - part of the category of improbable, world-changing phenomena in which Mr. Taleb also places the Sept. 11, 2001, terrorist attacks.

More than three months later, Mr. Calder, 61, is now Coventree's chairman, as the paralyzed company awaits an industry-wide solution to the ABCP crisis. For Mr. Calder, a voracious reader and sponge of ideas, this is where textbook management gets down and dirty in the real world.

Why is the Black Swan so meaningful?

Because I'm in the middle of a black swan. It fits the definition - completely improbable, high impact and, after the fact, everybody says they saw it coming.

Here I was reading the book and the [asset-backed] paper didn't roll on Aug. 13. In hindsight everyone saw it coming - but only in hindsight. Technically, people were worried about it two or three days earlier, but a month earlier they weren't, a year earlier they weren't, in the last 30 years they weren't.

There I was in a highly unlikely event, and the good news is the book gave me a context to practise what I preach, in actually managing our way out of it.

Is Black Swan the most influential book you've read?

It's my most recent meaningful book. The most enduring is The Effective Executive by Peter Drucker. I have 40 of his books. Drucker doesn't talk about leadership much; he talks about management and effectiveness, because that's what you can get done.

So we have a chance again to practise management, which is defined as getting the right job done, the right way.

How do you manage through

a crisis?

You've got to keep your nerve, for a start. And this is very Buddhist - you have to be very mindful of the situation. You have to be aware of all the factors going on.

I've spent time in Tibet practising mindfulness. Once you are mindful, that is part of keeping your nerve. Then you work with the people who matter and agree on short-term objectives, which are time-bounded and measurable. When you set objectives, you do not tell people - you agree. Then you allocate roles and set rewards for achieving those goals.

It's not much different than when you're not in a crisis, except it is accelerated and the pressure is on keeping your nerve.

Aren't executives always mindful?

Not in the Buddhist sense. I have a book, The Miracle of Mindfulness [by Thich Nhat Hanh] which is actually in my Buddhist library. It is the notion of 'stop, sit, breathe, listen.' It's not meditation but it's being mindful about what's going on. You're not seeking - you're watching.

But you're in the middle of a hurricane. How mindful can you be?

I've been practising it for a long time.

On that Aug. 13 morning, at the board meeting, I was mindful. I used to work on a desk, and I know a money market desk at 9:30 in the morning is pretty active. But it was quiet out there. I was just watching.

So I excused myself from the board meeting, and I went out and said 'Did the paper roll?' The people on the desk said 'No, everything's gone quiet.' I said 'Why doesn't one of you come into the board meeting and I think we'll change the agenda.'

Have you personally invested in Coventree?

That's good governance - it's what board members do. I have about a hundred grand invested, book value, which is probably less now.

How do you exert your ideas on senior management?

Only by example. I don't want to come across like I'm trying to convert these guys. I also have the experience of having been in a crisis. I was running [Fidelity Trust] in 1982 when Calgary fell apart. I was 35 and I had to tell people that they weren't going to get a dime back.

But you, as a veteran mortgage executive, must have been aware of the subprime risk potential.

By definition subprime is not prime, so you have to do it well, and in Canada, they did it well.

There is no subprime problem in Canada - it's a contagion issue. There is a crisis of confidence.

In our case, the [ABCP trusts] contain just a small portion of U.S. subprime loans. No, this is a crisis of confidence and I'm proud to be the chairman at this stage, being involved and dealing with this crisis.

So didn't you see this problem coming?

No, it was a black swan for me.

Except perhaps in investing, the Black Swan doesn't provide much of a road map for a manager.

It gives me a context. Then I go back to Drucker and organizational effectiveness. I'm able to commiserate with the [Coventree] folks - that it is nobody's fault. Even not anticipating it is nobody's fault. The issue at hand is: What is the right thing to do now?

This too shall pass?

Oh, sure, eventually. This is where the flip side of Black Swan occurs. Over time, everything becomes a normal distribution.

What hasn't changed is that there are people with assets who need to finance those assets. But to get there, you have to decide how to help and how to work with the solution in the short run. That's what we're doing.

Why did you become Coventree chairman?

We had the practice of electing a chairman at each meeting. We've decided to have a permanent chair till the next annual meeting, and I'm the guy. It's about having a non-management focal point.

Is there much you can do now as a company?

All you can do is think, create, propose. You can offer solutions and input but you don't have any authority.

You can also mope, cry foul, get mad, but you don't - because that's not how to handle a crisis. You deal with it and that's what I enjoy. Every company I've worked with produced things I bring to the classroom.

gpitts@globeandmail.com

Brendan Calder

Titles: Chairman, Coventree Inc.

Adjunct professor of strategic management,

Rotman School of Management

University of Toronto

Born: Toronto, 61 years old.

Education: Bachelor of mathematics, University of Waterloo

Career highlights:

1969 to 1978: General manager, director, Canavest House

1980-1983: President and CEO, Fidelity Trust

1983-1988: President of Counsel Corp.

1988-1996: President and significant shareholder, FirstLine Trust

1996-2000: Chair, president and CEO, CIBC Mortgages

2001: Joined Rotman as adjunct professor; entrepreneur in residence.

Director of six companies