For decades Tony Griffiths was Canada's ubiquitous corporate fixer. He served on the boards of many troubled companies and took on the CEO job at several firms that were struggling. In some cases – like Mitel Corp. – his actions ensured their survival. Mr. Griffiths, now 82, still sits on a handful of boards, and has written a book, Corporate Catalyst, an insider's account of the management and mismanagement of many iconic Canadian firms.
Are there as many mismanaged companies in Canada as there were when you started in business six decades ago?
Management is really about people, and people don't change. I think there are always problem companies. Activists, hedge funds and private equity funds are always looking for undervalued situations, and very often the situations are undervalued because of poor management.
Is it good that those activists shake up these companies?
Yes, if they go in and stay, as opposed to looking for a quick flip. To me this is not a new thing. If you look at the conglomerates in the 50s and 60s – ITT and Gulf & Western and all those – they were doing the same thing. They were buying companies low and then pumping them up, then either building on them or dumping them.
Is management more professional now than 50 years ago?
Yes, because there has been a great growth in finance and business schools. That is a very good thing.
Why is it often necessary to bring in outsiders to fix troubled companies?
The very strong personalities that build companies often don't build a team. Then there is room for an outsider to come in and get a fresh look. People also tend to operate as if they are in silos. When I went into a company, one of the first things I did was to look at the competition. As an outsider I never felt constrained about talking to my competition, whereas people in the business think they are going to give away secrets or something.
You have also served on boards at many solid companies, right?
One that comes to mind is Alliance Atlantis. It was very well run. The management did well, the shareholders did well. It was fun to be a director there, because [CEO Michael MacMillan] listened to me. That was so different from some of the other experiences I had.
What was your worst board experience?
Probably the nightmare at Confederation Life [which collapsed in 1994]. It lasted, from start to finish, about five years, and it was exasperating. It was a tragedy that never should have happened, even with the problems it had.
What was the main thing that kept it from being fixed?
There was a division on the board as to whether to change the management or not. I was pushing to bring fresh people in. There was a segment of the board that basically told me to bug off. I was sitting in my corner and they were sitting in their corner.
Are boards better now than when you began in business?
There is a general recognition of the importance of governance at the board. Of course now you have all of these directors' qualification courses, which make the awareness greater. It makes people more attuned to what the role of a director is.
You also see far more women and minorities on boards today.
Yes, that is an excellent thing. I have been out talking to MBA students, and at the Rotman School [at University of Toronto] something like 35 per cent of the students are female. When I was taking a business course, there were no women in it. Basically, it was a man's game. With the growth of women going into business, it is just a question of time before women will be equal to, or even more dominant than men on boards.
Is executive compensation out of whack?
The whole compensation system for public companies got out of control in the 1990s. There has been this gradual push up in pay, and I think it is too bad. There should be some relationship between what the top guy gets paid and the average salary in the working population.
Should there be a closer link between pay and financial performance?
No question. Bonuses are almost expected now. In my early days, a bonus was a very small portion of somebody's compensation. And stock options didn't exist.
Does it take more time to be an effective director now than it used to?
Yes. There are a whole bunch more regulatory, formalized things you do. I can remember the days when there wasn't an audit committee. Somebody told me one day we were going to have an audit committee, and I thought, what the hell is this? Now there is an audit committee, a compensation committee, a governance committee, a safety committee, a risk management committee. All these things require more attention.
You get credit for turning Mitel around, twice. Is it gratifying that it is still in business?
Mitel has now gone back to one of the founders [Terry Matthews, now chairman], which is quite a strange event. While I got credit [for fixing Mitel], I was lucky twice. The first time, British Telecom came in with $350-million and bought half of it. If that hadn't happened we would probably have gone down. Then they dumped it, and I went back again. And again we were able to get money to come in and buy it up. The worst thing in my life is to see a company that I was involved with, like Harding Carpets or Slater Steel or Confederation Life, go out of existence or go bankrupt. It just makes you sick because you know a lot of the people involved.
What is the most frequent question you get from business students?
Why do companies get into trouble?
What's your answer to that?
I say it comes down to people not doing what they are supposed to do. Usually it is the board in conjunction with the management. They are not tough enough. That doesn't mean you have to be brutal, you just have to be tough.
Born in Rangoon, Burma; 82 years old
BA from McGill University; MBA from Harvard
First full-time job was at Canadian Resins and Chemicals Ltd. in 1956
Became president of Consumers Glass in 1969.
Held executive and board positions at dozens of companies, including Canadian Cablesystems, Canadian Tire, Harding Carpets, Shaw Communications, Campeau Corp., Ondaatje Corp. and Confederation Life Insurance Co.
Was twice CEO of Mitel Corp., 1985-1987, and 1991-1993.