36

Listed|Winter 2015

The Directors Chair

Helen Kearns

Purpose, processresults

In The Directors Chair with David W. Anderson: An accomplished wealth manager, financial markets
executive and veteran director, Helen Kearns has relied on a disciplined, strategic, long-term approach
to create lasting value in every role
Photography by Jeff Kirk

With an exemplary career in wealth management and capital market finance,

Helen Kearns not only knows as much as anyone about making and managing money, but also how to anticipate and repel setbacks on the way to achieving long-term goals. Its a combination of skill and savvy that has made her a
valuable contributor as a director on the boards of two of the countrys leading
pension funds and, prior to that, at the Toronto Stock Exchange. Here, in
conversation with governance and leadership adviser David Anderson, Kearns
explains how a rigorous approach to decision-making and an unwavering,
strategic focus on long-term goals can help boards block out noise and shortterm distractions. She also reflects on some of the highlights of her board
career and how a commitment to continuous learning keeps her director
skills sharp.

Helen Kearns
Primary role
President and CEO, Bell Kearns & Associates Ltd.
Additional roles
Director, Alberta Investment Management Corp. (AIMCo); Director, Ontario College of Art and Design University
(OCADU), and chair, investment committee
Former leadership positions
President, Nasdaq Canada (2001-2004); President, Kearns Capital Ltd. (1996-1999); Senior vice-president, head,
institutional sales and trading, Richardson Greenshields of Canada Ltd. (1993-1995)
Former chair/lead director
Lead director, KingSett Capital Canadian Real Estate Income Fund (2008-2014); Chair, governance committee,
MS Society Research Foundation (2011-2014)
Former director
Ontario Teachers Pension Plan (2005-2011); Toronto Stock Exchange (1993-1999); MS Society Research Foundation
(2005-2015); National Ballet School of Canada (1996-2004)
Education
Bachelor of Arts (Honours), Bishops University; ICD.D, Institute of Corporate Directors
Honours
kJohn Molson School of Business Award of Distinction (2002)

kMontreal Board of Trade Women of Distinction Award (2002)

kWomen on the Move Entrepreneur of the Year Award (1997)

k100 Most Powerful Women in Canada by the Financial Post (2004)

Current age
62
Years of board service
25

37

Winter 2015|Listed

The Directors Chair

Helen Kearns

David Anderson Before you became known for your talent putting capital to work, you found early success as a journalist with
Business Week and The Gazette in Montreal. How did that prepare you for taking risks with other peoples money?
Helen Kearns Being a journalist was the best training ground for my
career. It has helped me to this day by training me to assimilate information and pull out salient points. Whats the headline? Whats
driving the story? As a corporate director, I need to get to the heart of
whats important to understand what its all about. I focus on whats
going to move the organization forward, the opportunities and strategic direction.
David Anderson You made a strategic review of the business a

condition of your continued service on the TSX board in 1996.

Thats an unusual move for a director. What prompted you to
do this?
Helen Kearns I had a unique perspective on the evolution of the
markets because at both Richardson Greenshields and then at
the newly formed Kearns Capitalwe were underwriting companies that were changing the world, in a fast-changing world.
Companies such as Newbridge, JDS Fitel and Vienna Systems,
among many others, were upending the way in which business
was being done. The Internet and telecommunications were exploding underneath us and boundaries were disappearing. In the
face of this, I saw an exchange that was focusing on rote trading
rules and its technology platform instead of the essential question: How will we compete? I wasnt trying to be difficult but
the reality was, in asking for that condition as part of accepting
another term on the board, I simply didnt have time to waste. I
had launched my own firm that was very involved in underwriting many of these companies. It was frustrating to realize, as a
Canadian, that our exchange was seen as a minor player in raising
capital when in fact we were excellent at creating new technologies. We had the talent. Our tools, our exchange,had to become
better. It seemed obvious to me that a strategic review could help
both management and the board at a time when the dynamics of
the industry were changing rapidly and we needed an appropriate response at both the management and board levels.
David Anderson This type of strategic review can help a board

affect change. Was this the case with the TSX board?
Helen Kearns Yes, it was an important lesson on the need forthe

boardto identify strategic priorities. It was a lesson ondifferentiating between information that is preparedfor the board and
identifying information that the board wants and needs.The board
should always have time set aside foridentifying and discussing the
strategic imperatives of an organization and how is it competing
in the larger context. The review served its purpose by reminding
the board to ask of itself key questions: What trends should we be
watching outside of the organization? How should wemeasure
ourselves against those trends? What information does the board
need to have these discussions?
David Anderson Twenty years on, what has been the impact of

the major initiatives undertaken by the TSX as a result of that

strategic reviewin particular, demutualization and consolidation?

Helen Kearns I thinkthat most people would agree the TSX is a stronger, more professionally managed organization today than it was 15-20
years ago. Having five separate exchanges across the country hurt our
ability to compete globally. Now the Canadian market is recognized
globally as being highly competitive in several areas of financing and
raising capital. For example, the Canadian market is world class in
mine financing and capital raising.
David Anderson In todays interdependent global markets, its
of vital interest to our public companies that Canadas capital
markets are healthy. Whats working and not working well in
our capital markets?
Helen Kearns Whats working well is the leadership role being
played globally by our large pension funds. I am biased because
I am on the board of AIMCo, but I know from my experience on

The public lacks confidence in the

integrity of capital markets. Fewer than
20% of people think CEOs consistently tell the truth. Regular exposure to
bad corporate behaviour erodes the
perception of leadership and integrity.
the Ontario Teachers Pension Plan board and from the leadership
roles taken byCPPIB, the Caisse, HOOPP and many othersthat
these organizations are renowned for their investment prowess
and their stand on important governance issues. Theres a broad
awareness among Canadians that these organizations are world
class, have integrity and demonstrate practices that are worth emulating. Leaders such as Lamoureux, Cook-Bennett and Bouey set
out the foundational governance of Teachers and deserve credit for
creating this Canadian success in the institutional space. They set
the example of keeping management independent and protected
from the political interests of government, of running it like a business, allowing it to take risks, of hiring the CEO directly and paying
for performance. This is a textbook case of why governance matters. It allows for long-term thinking. It is through their actions
that Canadian pension funds have carved out an important role as
investment and thought leaders on the global stage.
What is not working as well, in my mind, is public confidence in
the integrity of the public markets. Edelman, a PR firm, says that
less than 20% of people think CEOs consistently tell the truth.
Regular exposure to bad corporate behaviour erodes the perception of leadership and integrity in our capital markets.
David Anderson Does a lack of public confidence in the public
markets affect the practice of companies accessing capital in
those markets?
Helen Kearns Yes, I think it does. Were seeing too much shortterm thinking, particularly in public capital markets. This is
challenging for companies that want to develop a long-term
strategy. Companies become enmeshed in the tyranny of quarterly reporting. As news organizations create content around the

39

Winter 2015|Listed

The Directors Chair

Helen Kearns

earnings cycle, the importance of managing investor expectations takes centre stage. Management incentives are built upon
attaining share price gains. At the same time there has been explosive growth in index funds. So we have fundswith a weaker shareholderlink to the corporation, I would arguechasing
fewer companies.It is no wonder there is greater volatility.This
is hardly a stable environment for developinga long-term strategic growth plan. Large pension funds and to some extent private equity firms can fill this void with capital invested in private
companies that is patient and willing to invest long term. And so
it should come as no surprise that recent studies have shown that
the number of publicly traded companies in the United States has
fallen from 8,000 in 1999 to something like 5,000 now.
David Anderson What have you learned managing peoples
moneyboth on the institutional side and as an investment
adviser, that has made you a better director, whether on the
TSX, Ontario Teachers Pension Plan or AIMCo boards?
Helen Kearns I have learned two things: the value of an independent perspective in navigating the world and the necessity
of a framework for decision-making that reinforces disciplined
thinking and action. Shareholders and management teams appreciate the independence of a board in guiding and adjudicating a
business. While easier said than done, independent thinking is
the best way to add value while managing conflicting interests.
Rigorous decision-making is necessary if you take a long-term approach, as I do, to creating and preserving value.
Managing capital has taught me to establish and follow a
framework in which decisions are taken based on research and
the weighing of options in light of strategic direction and risk tolerance. This framework gives a board the discipline to stick with
the plan, in part by shielding us from short-term noise our emotions cant help but to react to.
On the investment side, we provide the tools to set the proper
governance in place and the appropriate level of risk to achieve
the returns we are seeking. We identify the managers who can
achieve value-added returns over the long term and monitor and
measure performance and risk across a wide array of metrics. Its
hard work to focus on long-term results and diversify risk, but
thats what it takes to achieve value-added returns. This hardwon focus on the long term, along with our protocol to monitor
all asset classes and their performance, dovetails nicely with my
work on a pension fund board like AIMCo. I immediately understand the backdrop against which our fund managers are making
asset decisions.
David Anderson Considering your service on these boards, are

there common misperceptions people may have about directorship?

Helen Kearns Its more work than people think. While its difficult
to generalize, I know that the sheer volume of information when
I started at Teachers was daunting. Theres a lot of detail to digest
to get up to speed on business model and performance drivers
and then to stay current. People who join a board may not realize that they have to devote a lot of timeusually full weekends
to have enough uninterrupted timeto absorb all of the materials.Despite joining a board because youve got relevant skills and

experience, you dont know until you get to the table how your
skills and experience will add value. Its interesting to see how
sets of directors learn to interact to get the right information in a
way thats valuable to everyone. The key I think is to ask questions
that show you realize youre not there to manage the business, but
rather to enhance your perspective as to how the information fits
into the bigger picture. I also think its easy to miss the fact that
the world of governance is changing right along with the broader
world of business. People might think theres little need to work
at staying current on being a good director. But I found there is a
need for continuous learning at the board level.
David Anderson You hold the director education designation
from the Institute of Corporate Directors (ICD). Given your
previous director experience, how was that useful?

Despite joining a board because youve

got relevant skills and experience,
you dont know until you get to the table
how your skills and experience will
add value. Its interesting to see how
sets of directors learn to interact.
Helen Kearns I remember debating whether to take the ICD director course. It was easy for me to think, having been on the TSX
board for the Dey and Saucier reports, that my knowledge of corporate governance practice was sufficient. I decided to take the
ICD course in 2009, not expecting to learn anything brand new,
but on the principle of continuous learning. It taught me a valuable lesson; I realized that governance does in fact change over
time, not just in the codes and regulations and the expectations
for director contributions, but in the substance of governance
strategy and oversight. Governance mores, like social mores,
evolve and change over time.
I really valued the module on information technology governance. IT governance wasnt identified and developed as a discipline in decades past, nor had it ever been a part of my previous
board experience. I immediately saw the value to boards and
management in having an IT governance framework. It allows
management to clearly explain the complexity and risk associated with each IT project. It also made for more productive conversations between board and management and lifted a cloud of
uncertainty around IT. Our job as directors is to help the organization achieve excellence. Staying on top of governance, just like
any other discipline in business, is necessary.

David W. Anderson, MBA, PhD, ICD.D is president of The

Anderson Governance Group in Toronto, an independent
advisory firm dedicated to assisting boards and management teams enhance leadership performance. He advises
directors, executives, investors and regulators based
on his international research and practice. E-mail:
david.anderson@taggra.com. Web: www.taggra.com

41

Winter 2015|Listed