Here is an offering of nine tête-à-têtes between our reporters and business news makers in 2013
Preet Bharara, U.S. Attorney for the Southern District of New York. Feb. 16, 2013
Since 2009, Preet Bharara has led the largest campaign against illegal insider trading in a generation or more – including the aggressive pursuit of SAC Capital, the hedge fund management firm run by Steve Cohen. He also has a wicked sense of humour, Joanna Slater discovered.
Last summer, 400 finance types gathered to hear Preet Bharara, the top federal prosecutor in Manhattan, speak at a conference at the Pierre hotel.
He surveyed the investors, traders and analysts assembled in the gilded main ballroom and remarked that the crowd was larger than he had expected. “So I just wanted to apologize in advance that I don’t have enough subpoenas for all of you,” he said.
The audience roared with laughter and surprise.
“Obviously, I’m kidding,” Mr. Bharara added in a reassuring tone. There was the briefest of pauses. “I do have enough,” he said. …
I ask him about the sheer number of insider trading cases he has pursued and what that tells us about the financial industry. When people believe the authorities aren’t paying close attention, he says, a culture can develop where the attitude is “very cavalier and casual about bad conduct.” So a prosecutor’s job is to change that calculus. If engaging in wrongdoing means running the risk not simply of paying a fine, but spending “time away from your children and your spouse and your family and open air, behind bars, for a long period of time – that, I think, severely alters the risk analysis,” he says dryly.
What connects the insider-trading investigation to other recent financial scandals is a “degradation of corporate culture,” Mr. Bharara says. He isn’t much impressed when executives tell him about their expensive systems to avoid regulatory infractions and worse. Such compliance programs and teams of in-house lawyers are necessary but not sufficient in his opinion.
He has a modest suggestion. Employers should make it a habit to say:,“One thing you should know about this place is we do not cheat, we do not steal, and if you do, you’re going to be out on your behind,” Mr. Bharara says. Too many companies, he says, eschew such statements of principle in favour of “fancy legal mumbo jumbo.”
Christine Day, CEO of Lululemon. March 9, 2013
In an interview given just before Lululemon’s “sheer pants” controversy occurred, CEO Christine Day talked to reporter Marina Strauss about the company’s leadership, and dealing with criticism. A few months later, Ms. Day announced she would leave the company.
It wasn’t easy for [founder Chip] Wilson to give up control of his retail “baby” to another “step-parent,” Ms. Day says, as she orders a mid-morning yoga-friendly green tea instead of a planned full brunch. (She had eaten poached eggs and mixed berries at an investor breakfast meeting, clad in her Lululemon black stretch yoga pants and blazer.)
“Chip is an idea-a-minute guy and he’d pursue all of them tomorrow and that would set the organization off on so many different things,” Ms. Day says, after sliding into a plush booth in the restaurant of the ritzy new Shangri-La Hotel on a working trip to Toronto.
“And so I’d have to say, ‘Okay Chip, here’s the deal: I can carry 20 balls and you can say, ‘I love the shiny one,’ and I’ll figure out how to put it in. But something’s got to come off. You can’t run around the other side of me and say, ‘You dropped this ball.’ You’ve got to trust that I’m always going to make the right decision about what’s needed now.”
Ms. Day’s handling of Mr. Wilson underscores her vision of running a company: encouraging grassroots participation and delegating decision making, while staying in control – and never being a pushover.
Charles Bronfman, businessman and philanthropist. April 6, 2013
Mr. Bronfman was refreshingly open during a lunch with Joanna Slater, discussing missteps – even painful ones – in the hopes others might learn from them.
Over the years, he held various positions in the Canadian operations of Seagram, eventually becoming co-chairman of the company. His elder brother Edgar ran the firm from 1971 to 1994 and then handed the reins to his son, Edgar Jr.
The subsequent implosion has been well documented: the sale of a highly profitable stake in E.I. du Pont de Nemours & Co. to finance a foray into the film industry, the acquisition of Seagram by Vivendi in exchange for shares whose value would plummet, the dismemberment of what remained of Seagram’s business.
After our plates are cleared, Mr. Bronfman orders some hot water with lemon and a plate of cookies, and I ask him about Seagram.
His response is devoid of self-pity. It is the thought of his father, whom he adored, that brings sorrow. “I think about how hard my dad worked to build up what he built up,” he says. “When I think of his dreams of building something and then all of a sudden, it disappears – that’s pretty tough.” The physical manifestation of that dream is the Seagram Building on Park Avenue, an architectural landmark that is no longer connected to the Bronfman family, he noted, something that would distress his father.
“I don’t know where he is, because I don’t know whether I believe in God or not,” Mr. Bronfman says. But if there is a heaven, and his father is there, “he’s got to be very, very upset. And I am still very upset – you can see it in my eyes.”
Jack Diamond, architect. May 4, 2013
Jack Diamond is known more for his buildings than his business, but as Gordon Pitts discovered, his most enduring legacy may not be projects such as the newly opened Mariinsky II opera house, but his answer to the puzzle of how a large organization can be both disciplined and creative.
At Diamond Schmitt with its 120 employees, the founder projects the image not of some distant celebrity but a working architect, who can play hardball in the down-and-dirty world of construction or grow misty-eyed at the sound of strings in a Mahler symphony wafting through the $700-million Mariinsky II. (The original Mariinsky, completed in 1860, sits nearby.)
He rejects the idea of the celebrity architect but sees himself akin to a movie director. “A director doesn’t do the acting, hold the [light] gaff, or do the sound, but he does hold it together with an artistic hand,” Mr. Diamond says. “It’s a not a one-man effort, not like doing a painting or sculpture; this is a complex enterprise and so managing is part of it.”
To show how this managing happens, he is hosting lunch in his office before we stroll a bit among the cubicles. The fare is ordered-in sandwiches of turkey and chicken, with a heaping bowl of Caesar salad.
At his age, he picks carefully among the projects he woos and works on, while his long-time partner Donald Schmitt, about 15 years younger, is the company’s primary rainmaker. At one point, Mr. Schmitt blows through the office, just back from a Chicago client meeting and scrambling to make a conference call on time. The two partners are now among 15 principals who own shares in the firm.
Another reason for eschewing a lavish lunch is that this is Friday, and at 4:30 p.m., Mr. Diamond will join the weekly beer-and-popcorn session, a bonding exercise where drawings are presented and critiqued in the manner of a university class. The event knits together 120 people with diverse egos and tastes – “the best graduate seminar in town about architecture,” says the founder, who first came to Canada as a teacher. There is no talk of insurance, deadlines or business – just the craft, and the founders can demonstrate they are still, at heart, designers.
Shane Smith, co-founder of Vice.com. June 15, 2013
Simon Houpt found out why the Montreal-born media company’s notorious bad-boy founder has stopped partying so much.
Mr. Smith has a Hefnerian reputation for embodying his company’s reckless, anti-authority brand. When you last saw him, a couple of years ago at a marketing conference in Toronto, he gleefully swore his way through a panel discussion on Generation Y; he turned off roughly as many attendees as he turned on. And he has a reputation for liking the drink.
But on the 15-minute stroll over here from Vice HQ, across the north side of the Brooklyn neighbourhood of Williamsburg, he admitted that indulgence has lost much of its attraction. “The thought of going to a bar till 4 in the morning doesn’t really interest me any more. I mean, I’ve already been to the best party I’m ever gonna go to, I’ve already seen the best band I’m gonna see. When you’re young, you give a shit about that sort of stuff.”
By way of explanation, he mentions the filmmaker Spike Jonze, who became Vice’s creative director in 2006. “I spent my 30s partying, Spike spent his 30s making stuff, and at the end of 10 years, Spike had pretty much won every video award there was to win, won at Cannes for every commercial he did, made two Academy Award-[nominated] films, [was a writer on] Jackass, a cultural phenomenon – and I had a hangover. So it was kind of a wake-up call: All right, maybe we should get to work here.”
Mr. Smith certainly has gotten to work. In the past few years, he has built Vice, which started as a free magazine distributed on the streets of Montreal, into a globe-straddling media brand with operations in 34 countries.
Two years ago, Vice sold a minority share to the London-based marketing firm WPP estimated at $50-million (U.S.) and struck a representation deal with the William Morris Agency’s Ari Emanuel. ... And on Friday night, it wrapped up its first 10-week season of Vice, a raucous TV news magazine for HBO, which attracted harsh words from the U.S. State Department after its crew, including Mr. Smith, travelled to North Korea with Dennis Rodman and the Harlem Globetrotters last February and wound up partying with Kim Jong-un; the show, which earned about 2.5 million viewers an episode, received an order for a second season this week.
Angeliki Frangou, founder of Navios Maritime. July 6, 2013
She controls one of the largest and fastest-growing Greek-controlled shipping companies. Over a Mediterranean meal in Piraeus, Eric Reguly talked to Angeliki Frangou about how she got started.
A 14,000-ton freighter, the Fulvia, lay in Rio de Janeiro, unloved and very much for sale. It was 1990 and the Brazilian economy was in one of its periodic messes. Surely the rotting dry-bulk carrier would find no buyer.
The sight of a young woman inspecting every aspect of the ship, from its wheelhouse to its engine room, must have seemed incongruous to the burly men in the shipyard. The woman was 25, and so obviously not the captain.
Who was she, what would she possibly know about ships and why would she want one in this economy? The woman plunked down $1.5-million (U.S.) for the ship, and with it began to build an enterprise that, by 2011, got her on Fortune magazine’s list of the world’s 50 most powerful businesswomen.
The Fulvia would spawn a shipping empire. The woman who walked the Fulvia’s decks in 1990 is Angeliki Frangou, founder, CEO and chairwoman of Navios Maritime Holdings Inc. At last count, the Navios group of companies – three of which are listed on the New York Stock Exchange – had 119 ships under its command, plus nearly 300 barges and small tankers that ply the Hidrovia river system between Paraguay and the Uruguayan coast.
In Greece, where control of shipping companies is considered a virtual birthright, she is the executive to watch; a potential Aristotle Onassis in the making, though adorned with pearl earrings and necklace. ... The Fulvia is long gone, but it “was a great investment,” Ms. Frangou says. “I wanted to have my own business, so I took the challenge to reactivate the vessel. I supervised everything. Everything had been stolen. You opened the machinery and the parts were missing inside.”
Lord John Browne, former CEO of BP. Oct. 26, 2013
The former head of BP was feeling ill when Eric Reguly shared coffee and cookies with him in London. But he spoke freely of his rise through the oil company’s ranks, and his dramatic fall.
Mr. Browne studied physics at Cambridge, toyed with the idea of a career in academia, changed his mind and joined BP in 1969 at age 22. He was promptly expedited to the Alaskan oil rush, where he worked as a trainee petroleum engineer. Until he resigned six years ago, he had never worked at any other company.
Along the way, he had stints in Calgary, San Francisco and Cleveland. The Calgary years, in the late 1970s, convinced Mr. Browne that BP should not be an oil sands player, setting it apart from rivals such as Exxon and Shell. I ask why he and his then second-in-command, Jim Buckee, who would later become CEO of Talisman Energy, BP Canada’s successor, took a pass on the Alberta goo. “We concluded that BP didn’t have all the best bits of acreage, that Imperial and Shell did,” he says. “We just didn’t have enough money to do everything we wanted.”
He now admits that he “absolutely” should have pushed harder in the oil sands and that new technology, such as SAGD – steam-assisted gravity drainage – went a long way to make oil sands production more profitable.
But Mr. Browne will be remembered more for what he bought than what he didn’t. Between the late 1990s and the early part of the past decade, he did three deals that launched BP into the big leagues, all of them done when oil was at rock-bottom prices. BP merged with Amoco and shortly thereafter bought Atlantic Richfield and Burmah Castrol.
BP got even bigger in 2003, when he and the Russian oligarch Mikhail Fridman formed the TNK-BP joint venture, creating Russia’s third-largest oil producer. “We made a huge amount of money with TNK-BP,” he says. ...
But shade was to fall on the Sun King’s empire too.
In 2005, an explosion at BP’s Texas City refinery killed 15 and injured 170. An independent report on the tragedy concluded that it was the fault of a safety mishap that could have been avoided. Two years later, Mr. Browne lied about how he met his live-in Canadian lover, which, in fact, was done through an escort agency. He lost his case against the Mail on Sunday newspaper to keep the details of his private life out of the press.
That ended his career at BP and at Goldman Sachs, where he was a director. ... Does he wish he had come out of the closet years earlier? “Yes I do, [but] that’s a retrospective fallacy. … It’s not without risk coming out even today.” He won’t say more for fear of front-running his book about “being gay in business.”
Howard Schultz, CEO of Starbucks. Nov. 16, 2013
Over a cup of java at one of the ubiquitous chain’s Toronto locations, Marina Strauss spoke to the coffee kingpin about his decision to come back from retirement, and why he’s not going anywhere soon.“I didn’t get that [retirement] right the first time around and that was my own fault,” Mr. Schultz says, sipping – what else? – a (black) Starbucks anniversary blend that includes his favourite Sumatra dark brew. “I have no immediate plans to leave any time soon. And I don’t have any political ambitions, if that’s your next question.”
While other business leaders shy away from speaking on the issues of the day, he’s outspoken on matters from gun violence (he recently asked customers not to bring guns into Starbucks cafés) to last month’s U.S. government shutdown (he led a petition against it).
Mr. Schultz is firmly planted at the top, steering the ship in rough waters. Rivals ranging from the Oakville, Ont.-based Tim Hortons Inc. to U.S. fast-food titan McDonald’s Corp. – and its spreading McCafé – are struggling to make sales gains with cautious consumers, who still seem willing to dole out $4.15 for a large latte.
“I think it’s harder today than at any other time in my 35-year career to maintain this kind of success at this level,” he says.
In a fast-moving digital age, any perceived misstep is quickly tweeted, posted and shared around the world, meaning retailers have to be nimble.
As we speak, at a Starbucks near Toronto’s posh Yorkville neighbourhood, Mr. Schultz is surrounded like a rock star by a clutch of his “partners,” the corporate nomenclature for employees, all clamouring to shake his hand. ...
He’s in town to rally the troops and congratulate them for a record year in Canada, with more than $1-billion in sales and more than 1,300 cafés.
This is an important market for Starbucks – it was in Vancouver, across the border from the chain’s Seattle headquarters, in 1987 that the company made its first attempt at international expansion.
“If Vancouver did not succeed as Starbucks from ‘87 on, our entire international business, which is now thousands of stores and a significant amount of growth and profit, may not have existed,” he says.
Jean-Pierre Blais, chairman of the CRTC. Nov. 2, 2013
Under his leadership, the federal telecommunications and broadcasting regulator has become more vocal in defence of the consumer. Steve Ladurantaye talked to the chairman about why.
For decades, the country’s broadcast and telecom executives wheeled and dealed their way through hearings, confident they had an ally in the CRTC that would rubber-stamp almost anything they proposed. But since taking over, Mr. Blais has made it clear he believes Canada’s Broadcast Act invests him with powers ignored by his predecessors.
The Bell-Astral rejection was soon followed up with other moves to show off the regulator’s muscle. When Book Television tried to change its licence to allow for more mainstream broadcasting, the answer was no. The CRTC killed three-year cellphone contracts.
International roaming fees for most major carriers have been halved, thanks largely to sustained pressure from the regulator. Mr. Blais raised the spectre of unbundling television channels a year before the Conservatives made it sound like it was their idea in the recent Throne Speech.
The moves have boosted the regulator’s position as a consumer advocate, but have also confounded top executives at some of the Canada’s largest companies.
On the record, they say he’s a good partner who has the best interests of Canadians at heart. Get them alone, however, and they call him a control freak who is enjoying his time in the spotlight a little too much after a largely anonymous life as a bureaucrat.
He’s not particularly concerned about industry perception, and doesn’t talk in detail about his relationship with the executives he regulates – he’s just happy people are paying attention. The regulator isn’t top of mind with Canadians, he concedes, and whenever consumers do pay attention it’s because the commission is seen as an anachronism that is blocking progress in some way or other.
“When you see online conversations, it doesn’t take long before there is a post that says ‘Get rid of the CRTC,’ ” he says.
“Okay, people are allowed to have their views. I don’t think it’s particularly constructive. But it’s true – the CRTC has reputational baggage. If there’s something I worry about, it’s that you’re entrusted with something when you come here, and that’s the institution’s reputation. I want to build it back up.”
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