One of David Denison’s most cherished possessions is a thick, leather-bound book that he keeps in his study.
The book is full of messages from employees and his management team, presented to him when he stepped down this year as chief executive officer of the Canada Pension Plan Investment Board. It was a gift to celebrate a colourful seven-year run for Mr. Denison, whose job at the board was essentially to help it grow up.
When he took over in 2005, the CPPIB was five years old and had a staff of 70. It was responsible for about $70-billion is assets, mostly invested in passive market indexes. It now employs 850, steers a portfolio worth about $170-billion and owns a full range of active investments, including real estate, private companies, infrastructure and public company stocks.
During that time, Mr. Denison became one of Bay Street’s most prominent deal makers. And yet, it is the people he managed that he considers his greatest legacy – the talent he brought in to guide the fund, even more than the money it made. “If you focus on the people … the deals will take care of themselves,” he says. “And if you don’t pay enough attention to the people and the culture, you will end up with some deals you probably won’t be happy about having on your track record.”
The CPPIB makes investments on behalf of the Canada Pension Plan, which is responsible for the retirement incomes of more than 18 million Canadians. You’d be hard-pressed to find a weightier job on Bay Street. Which isn’t to say Mr. Denison, at 60, is done working. He recently joined the boards of two of Canada’s largest companies – BCE Inc. and Royal Bank of Canada – and has another director’s job lined up at a non-Canadian company, though that has not yet been made public. He has agreed to work on three private company boards, and has a roster of charitable activities.
For someone who spent his career as a shareholder and a committed advocate for better governance in boardrooms, it marks a dramatic move to the opposite side of the table. Mr. Denison says his early experience has reaffirmed that it is “tough job” to be a director of a large and complex company, and there is a steep learning curve. It has also convinced him of the benefit of having directors “with years of experience and therefore a broad context.”
The Reds Wine Tavern, in the centre of Toronto’s financial district, has been called the “Bay Street power lunch destination,” which seems apt for someone who has been one of Bay Street’s ultimate power brokers. But as he takes his seat and declines the wine list, Mr. Denison admits that, while he proposed lunch at Reds, he hasn’t eaten at Reds in a long time and isn’t familiar with the menu options.
“I don’t pay a lot of attention to food and menus,” he says.
It’s easy to believe. He is whippet-thin, and opts for a modest mushroom soup and chèvre-topped salad for lunch.
His discipline runs core deep. A lifetime runner, the 60-year-old says his nod to retirement from the CPPIB is that he no longer gets up at 4:30 each morning to strap on his sneakers. He has backed it up to 5:30 a.m.
Mr. Denison’s commitment to Canada’s public pension system came relatively late in life. Before joining the CPPIB in 2005, he spent 10 years at U.S.-based mutual fund giant Fidelity, his last years as head of Fidelity Canada. He was lured to the CPPIB, he says, by the opportunity to shape a still-young organization.
The CPPIB had been created just five years earlier with a mandate to invest the CPP’s money professionally with a very long-term horizon and at arm’s length from government interference. Until the mid-2000s, it had largely been a passive index investor, but he says he was attracted by plans to transform it into an active investment fund.