Matthew William Barrett, who is on the board of Goldman Sachs, is seen in his Oakville home on December 21, 2009. JENNIFER ROBERTS FOR THE GLOBE AND MAILJENNIFER ROBERTS/The Globe and Mail
We knew he wouldn't go quietly. Matthew Barrett has too much nerve and verve to retire anonymously to a Toronto suburb, after a career that carried him from a bank clerk's desk to the top of two major institutions, Bank of Montreal and Barclays Bank in Britain.
At 65, he is becoming a busy director (Goldman Sachs Bank, Harry Winston), and he still radiates an aura of celebrity - which he insists can be an unwelcome distraction. For Mr. Barrett, it was always about the self-learning and the ideas that drove an Irish kid without a university degree to the pinnacle of global banking.
Why come back to Canada to retire?
It's my home. I came to Canada in 1967. My four children and two grandchildren are here and my lifelong friends are here. That becomes more and more important as you approach dotage. You must love Canada to come back to the taxes - and I do. I regard the 10 years in London as a walkabout, as the Australians talk about it: You are always on your way home.
You said on leaving Bank of Montreal, "I'm going to write a bad book, find my karma and grow a ponytail." What happened?
It haunted me. When I was at the BMO press conference to announce my retirement, there was this huge burden lifted off me and I thought I could have some fun. So I said all those things about "smelling the roses before I fertilize them," and, of course, three months later, I'm in Barclays, so it made a lie out of everything I said.
What about writing a good book now?
I'm going to try, but my problem is that autobiographies or memoirs can be the ultimate conceit. A lot of them are exercises in self-aggrandizement. What delays me is: one, I'm not a good enough writer; and, two, I am trying to find a way to say something new, rather than, "In the early years, blah, blah," - who cares?
I have some views on the role of the CEO that might be interesting. My shorthand for it internally was "soft-side strategy." You've got all the hard strategies about expansion, distribution and M&A - the soft side was more the psychology of the organization, of customers and the reputation in the marketplace - in fact, the political dimension of the CEO's job, which I think from the outside is misunderstood.
Political in what sense?
You have a lot of contending, competing constituencies and you have to manage and bridge them. The diplomacy is tricky. And you have to learn to use power positively. Those are like political skills.
A journalist in London once asked me, "Why is it people hate you business guys for your big pay, but they don't resent Beckham?" I had a theory: When people turn on the television and they see an elite athlete, they've probably played that game themselves. It's obvious to them that the person they are looking at has skills on another planet in comparison to their own. ... But when they look at me, they see a suit. They don't see any skills. ... "Why does he deserve so much?" they say. People can't make a connection between the reward and the skill set, whereas they can when they are looking at a great athlete or performer. In the case of a CEO, they think, "I could do what he does."
So, in a book, how do you describe a day in the life or a year in the life of an effective CEO? What is the job? I would argue all businesses are people businesses. I don't care whether they are high tech or engineering. In the end, they revolve around the quality of the people and their motivation, morale and skills.
What are you reading these days?
I just finished The Upside of Turbulence [by Donald Sull] Not a great book. It is a whole series of case studies about how in bad times people made fortuitous moves. So what? Now tell me why. It's a bit like reading The Black Swan [by Nassim Nicholas Taleb] I'm about 300 pages into The Black Swan, and I'm thinking the theme of the book is "S--t happens." Okay, what am I supposed to do about that? So something out there that is impossible to know about can come out of the wings and kill you. Now what do I do about that? I can't run a business on the basis that something might kill me.
That's why I've delayed taking a stab at writing a book myself because most business books are bloody awful. They come highly recommended, and I read them and think, "What will I do differently at 9 o'clock tomorrow morning?" And I say, "Nothing." It is an intellectual exercise, kind of therapeutic, I guess, but not very helpful. ... The great writings [on management]were done before the mid-1970s, and there hasn't been a lot that's great since. I've also finished the new Ayn Rand biography, a sad and sobering read because I was a Randian objectivist in my salad years. It is very depressing; she was such a despicable human being. I still argue she was a genius, but an extremist. I also read a biography of Francis Bacon, who was a despicable guy but I love his art. So I console myself by separating the person from their output.
Are you still a Randian?
I'm a recovering Randian. She gave a good intellectual and philosophical defence of capitalism which I liked. I would have mixed a little human compassion into all this. She is bit Darwinian and I think, Nietzschean - all this about supermen and superwomen. Someone once said leadership means getting extraordinary performance from ordinary people. I think she underestimated that. It isn't just the superman or superwoman at the top - it's thousands and thousands of little people.
What do you think about Britain's Chancellor of the Exchequer taxing bonuses for bankers?
It doesn't surprise me. This is the last-ditch effort by a dying Labour Party, that's almost certain to be ousted, to pander to public opinion at the moment. I think public outrage is pretty serious. ... And he's not unique. [U.S. President Barack]Obama has joined the bank-bashing and [German Chancellor Angela]Merkel has. At the moment, casting banks as the villains of the piece is popular.
But aren't they the villains?
They have no exclusivity in this regard. You had irresponsible lending by banks, irresponsible borrowing by consumers, irresponsible fiscal policy by governments, bad monetary policy by central bankers. The banks have to bear more than their fair share of it, because they are supposed to be the experts. But there were a lot of other experts, including supervisors and regulators. So let he who is without sin ...
Don't you agree an industry more attuned to the vibes out there wouldn't be paying these huge bonuses?
It's a tough one, yeah. It depends on the nature of the bonuses. Certainly you can't do it in companies that are major recipients [of bailout money] But I think you either believe in markets or you don't. There is a market for talent in every profession. Even with the banks under major government support, you want them to succeed, do well and attract the talent that will turn them around and get shareholders a nice profit.
Have Canadian banks lost their window to acquire U.S. banks?
Not yet, at least I hope not. This may be the one period when the [Canadian banks']market caps are so high, it puts you in merger-of-equals territory with some pretty big properties that otherwise would be untouchable.
The question is, how toxic are the assets in those other banks and how much support you can get from the U.S. Federal Deposit Insurance Corp.? Because price-earnings ratios in the U.S. are traditionally higher, and you've been in a softer currency here, it's always been very difficult for Canadians to buy anything of scale. Now that may not be true. ... I'm just hopeful for them. I've always wanted Canada to be home to some banks that could play on the world scale.
Are we seeing an important turning point in terms of Asia's future dominance?
The magnitude of wealth creation in China and India is shifting the balance of power in the world, but I am a long way from writing off the Americans. In technology and innovation, I would still bet my money long range on America. ... But how do you shift your sights to participate in China? It's not easy for banks. As someone who spent a lot of time in China, it was never clear to me what would happen after you got over the excitement, the exotica and the thrill of seeing something move from the 14th century to the 22nd. I found myself saying, "Show me the money. Where do I make some money here?" It's not clear how outsiders can make money on the banking side.
Would you advise an aspiring young banker to get an MBA?
I used to argue, "Give me a good MBA and I'll deprogram him over the next couple of years." You want people who can think. They won't necessarily have specific skills anyway; they will have to be taught skills specific to the industry. The MBA degree and process is valuable but so is an MSc or an MA in literature. I used to joke that if you can find me someone who has a degree in figuring out patterns of imagery in Chaucer's Canterbury Tales, I can teach him to break down a balance sheet in 30 minutes. What you want is a mind.
A liberal arts education is extremely valuable for someone coming into business because increasingly business is about context as well as about the technical aspects. You can teach the craft skills of business.
Were you too charismatic to be taken seriously as a banker?
Well, I did reasonably well in my career, so I must have got something right. I tip my hat to my late predecessor, Bill Mulholland. I once gave a presentation internally when I was coming up through the ranks. And I am a little irreverent. Afterward, Mr. Mulholland called me over and said, "Son, let me give you a piece of advice. It's okay to be idiosyncratic - you just better be very good." He was signalling that if you are going to be different, you had better make sure you perform or otherwise you will be killed.
It stems from reading all these books. I thought there was a much simpler way of getting complex ideas across, so I talked in parables and metaphors. I was trying to communicate in a way that would make opaque concepts accessible. And I was concerned that banks and bankers were seen as remote gnomes of Zurich, as mysterious and hidden. Also, in BMO's strategy, we were trying to build a bank that was open, approachable and human, and so I tried to do that myself.
Did I sometimes overdo it? Probably. I think the modern CEO should be a little less profiled than CEOs in the past. You pay the price for it. But neither can you hide in your bunker.
Matthew Barrett Oakville, Ont.
Director, Goldman Sachs Bank USA; Harry Winston Diamond Corp.; member of advisory board, NBK Group (National Bank of Kuwait)
Born: Sept. 20, 1944, County Kerry, Ireland
Education: Attended advanced management program at Harvard Business School
Career: 1962-67 Clerk in London, England, office of Bank of Montreal 1967: Came to Canada as BMO management trainee
1987-1989, BMO chief operating officer
1989: BMO chief executive office and, the following year, chairman. Served until 1998
1999-2004: CEO of Barclays Bank
2004-2006: Chairman of Barclays