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John E. (Jack) Irving gets a hug from his wife Suzanne before the 2008 Canadian Business Hall of Fame ceremony.

Peter Power/Peter Power/The Globe and Mail

The powerful Irving family empire in New Brunswick is reeling from the loss of two central players, with the death of one of the three aging brothers who control the massive conglomerate and the sudden unexplained exit of the rising star of the next generation.

J. E. (Jack) Irving, 78, one of three sons of the late empire builder K.C. Irving, died Wednesday morning, just hours after the family had confirmed that his nephew Kenneth, the major leadership figure at Irving Oil, was taking an indefinite leave of absence for health reasons.

It means the sprawling private business has, within days, been robbed of two leading characters in the succession drama that is playing out in the Irving companies, which are based in Saint John and own great swaths of Atlantic Canada's energy, forestry, steel, media, retail and construction base.

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In a clan legendary for tight control over business and information, it is a new scenario for the wealthy Irvings, whose net worth was recently estimated at $4-billion (U.S.) by Forbes magazine.

It is a fact of life at large family companies that, as they proceed down the generations, their focus becomes splintered by the divergent interests of various cousins and the sheer randomness of human events, such as sickness and death. It turns out the Irvings, whose remarkable business success began with a family sawmill in Bouctouche, N.B., in 1881, are no different.

For the past two generations, the Irving interests, controlled through offshore trusts established by K.C. Irving, retained an astonishingly tight-lipped discipline. But as a new generation became restive over the centralized ownership structure, the family embarked on a complex reorganization that would see the grandchildren of K.C. assume more independence in their operational fiefdoms.

That means Kenneth, the son of 79-year-old Arthur Irving, the middle brother of K.C.'s sons, would assume more autonomy in Irving Oil, which owns Canada's largest refinery in Saint John. Similarly, the two sons of the oldest brother, 82-year-old J. K. (James) Irving, are poised for greater independence on the forest products side.

Now, the succession chart on the energy side has become cloudy with the departure, however temporary, of Kenneth Irving, 49, who was considered a visionary and modernizing force in the organization. His younger brother, Arthur Jr., had already left day-to-day operations to focus on his own business interests.

The reasons for Kenneth's departure were not disclosed. A tightly wired, energetic leader who relaxes by strenuous rowing, he had big dreams for a highly diversified energy business under its holding company, Fort Reliance Ltd. But he had suffered crushing disappointment, particularly in the deferral of the plan to double the capacity of the giant oil refinery in Saint John.

His leave of absence means a loss of top leadership at Irving Oil at a key moment in its history. The top operating executive is a well-regarded non-Irving, Mike Ashar, who was lured from Suncor Energy to be chief operating officer. He reports to Kenneth's father, Arthur, who is never far from the action.

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Meanwhile, the forestry side, run by J. K.'s sons Jim and Robert, seems like an island of stability. As an indication of business-as-usual, several members of the forestry branch showed up this week at former New Brunswick premier Frank McKenna's annual clam bake for the Atlantic elite at the Fox Harb'r golf resort.

But this line of the family had to cope with last year's temporary exile of Jamie Irving, the first of the fourth generation to join the family business.

Jamie, the son of Jim Irving, left his job as publisher of the Irving-owned New Brunswick Telegraph-Journal, following the newspaper's apology to Prime Minister Stephen Harper for reporting he had slipped a communion wafer into his pocket at a funeral mass for former governor-general Roméo LeBlanc. Mr. Harper insisted he had followed religious protocol to consume the wafer.

Within six weeks, Jamie returned to the fold as a vice-president of the newspaper holding company.

Amid all the change, Jack Irving had been a figure of congeniality who was greatly liked by New Brunswickers of all ranks. He oversaw a collection of smaller non-core businesses, such as construction, steel and property, while ceding the big core jobs to his harder-driving brothers, J.K. and Arthur.

"Jack was all about civility," said Donald Savoie, a leading public administration professor at Université de Moncton. "He was an extraordinarily polite, low-key, decent New Brunswicker."

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Jack's death, after a brief illness, now focuses attention on the future role of his son, John Irving Jr., a Harvard MBA who had moved around the organization before taking a major role in property and restoring parts of downtown Saint John. He now assumes his father's role as a pivotal player in the succession drama, and possibly a business force in his own right.

Jack Irving will be missed, said Jonathan Levin, a partner with Fasken Martineau DuMoulin LLP and long-time legal adviser to Mr. Irving. He said Mr. Irving "delighted in meeting people from all walks of life. He was very approachable and was just as happy to shake hands with shipyard workers as he was senior executives and government officials."

With files from Jacquie McNish

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About the Author
Senior Writer, Report on Business

Gordon Pitts is an author, public speaker and business journalist, with a focus on management, strategy, and leadership. He was the 2009 winner of Canada's National Business Book Award for his fifth book, Stampede: The Rise of the West and Canada's New Power Elite. More

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