Bank of Montreal chairman Robert Prichard is defending his involvement in the political and legal fracas over SNC-Lavalin Group Inc., saying he informed the bank he was joining the team at a Bay Street law firm that was hired to give advice to the engineering company.
Canada’s fourth-largest bank was drawn into the controversy over the Trudeau government’s handling of the SNC file after the federal Ethics Commissioner released a report Wednesday that found the Prime Minister broke the rules in directing government officials to find a solution to SNC’s legal troubles that would safeguard its interests.
The report revealed two senior BMO officials, Mr. Prichard and vice-chair Kevin Lynch, made multiple attempts to lobby cabinet minister Scott Brison to help SNC avoid a criminal prosecution.
The two men met with Mr. Brison, who was Treasury Board president at the time, in October and November. Mr. Brison, in turn, conveyed their legal arguments and concerns over SNC to then-attorney-general Jody Wilson-Raybould, and to senior members of the Prime Minister’s Office.
In January, Mr. Brison announced he was quitting politics, and in February he joined BMO’s capital markets arm, BMO Nesbitt Burns Inc.
The web of influential officials at the heart of the SNC-Lavalin affair highlights the governance challenges confronting some of Canada’s largest companies as they navigate the myriad responsibilities borne by directors who have roles at different companies. In pushing SNC’s case for a legal settlement of the charges it faces, Mr. Prichard and Mr. Lynch sought to meet their obligations to SNC-Lavalin, rather than to BMO – Mr. Prichard as chair of law firm Torys LLP, which represents SNC-Lavalin, and Mr. Lynch as chair of SNC’s board.
Under BMO’s conflict of interest policy and director independence standards, directors are required to declare outside activities and interests to the bank and to recuse themselves from certain board discussions.
“Under these policies, I have always declared my outside activities to BMO (including my joining Torys legal team advising SNC in the fall of 2018) and recused myself as appropriate,” Mr. Prichard said in an e-mail. “The other boards on which I serve, like all public company boards, have similar conflict of interest policies.”
BMO’s policies apply to directors “in their roles on the board and in their outside activities,” a bank spokesperson said in an e-mailed statement. “BMO’s Code of Conduct is the ethical foundation for everyone in the organization. The Code guides our decisions, actions and the way we work.”
The bank also confirmed that Mr. Lynch, who is not on BMO’s board, is required to get bank approval for outside activities in advance, including his work for SNC-Lavalin.
Mr. Prichard is an experienced corporate director who is used to wearing several hats at once. A former law professor, university president and newspaper executive, he has served on BMO’s board since 2000. He is chair of Torys LLP, a director of private-equity firm Onex Corp. since 1994 and of retailer and food company George Weston Ltd. since 2000, in addition to doing board work for non-profits such as the Hospital for Sick Children. He was also a director of mining company Barrick Gold Corp. from 2015 until January, 2019, and chair of public transit agency Metrolinx until last July.
“For most people, that would be too much," said Richard Powers, a corporate-governance expert at the University of Toronto’s Rotman School of Management. But Mr. Prichard “has an amazing capacity for work" and “he’s followed the rules,” Mr. Powers said.
Mr. Prichard had perfect attendance at board and committee meetings for BMO, Onex, Weston and Barrick last year – a combined 77 meetings in 2018 – according to public filings. Last year, he earned $592,648 as BMO’s chairman, in addition to a combined $718,500 for his director’s roles at the other three companies.
Mr. Prichard intends to step down as BMO’s chairman at the bank’s next annual meeting, after 20 years on the board and at the age of 70 – both limits BMO set for directors who joined the bank before 2010. (Term limits have since been shortened to 15 years for directors who were first elected from 2010 onward.)
“I certainly can see people coming up with the perception of a conflict. But when you look past that, I would say that they [Mr. Prichard and Mr. Lynch] acted properly,” Mr. Powers said.
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