Aimee Schulhauser, a serial entrepreneur in Regina, Saskatchewan, was contemplating how best to regrow her original trio of culinary businesses to their pre-COVID profitability levels. Her early successful entrepreneurial business decisions were led by a combination of gut instinct, watching trends, and seizing opportunities, but her more recent start-ups in 2018 and 2020 were more calculated business decisions that ultimately failed. In June 2023, the original trio of “sister businesses,” as she referred to them, were improving in both sales and profitability, but it had not been easy. Customers’ buying behaviours had changed significantly, and with six months before the federal government’s Canada Emergency Business Account loan was due to be paid, Schulhauser’s focus had shifted from growing through new businesses to how best to regrow the core businesses.
<div style="font-size: 0.94em; line-height: 1.4;"><p align="justify">Ivey Business School Professor Emeritus Glenn Rowe has learned a lot about leadership by studying decision-making in the private sector, but his most valuable leadership lesson was learned as the officer-in-charge of Patrol Boat Standoff in the mid-1980s, when Rowe was a staff officer at a Canadian naval reserve division. On his first day as officer-in-charge, Rowe made an error that led to his ship’s grounding—a cardinal sin in any navy. This article—which Rowe co-authored with Ken Nason, another former Canadian naval officer with a second career in business—examines how failure can drive leadership development by highlighting how it positively affected Rowe’s career. Although we often hear that failure is not an option, this is a costly perspective. After all, failure shapes our character, restores focus, renews motivation, and teaches us about accountability, transparency, responsibility, adaptability, and ownership. Learning from failure, however, can’t happen unless one embraces failure as a teacher. When Rowe grounded his patrol boat, he learned the value of staying calm during a crisis and discovered that he had command ability. Earlier in his career, when approaching HMCS Preserver’s commanding officer to discuss issues tied to his performance, he didn’t save his job, but by admitting to himself and navy authorities that his performance was less than ideal, he avoided the “ostrich effect.”
In March 2021, the newly appointed senior vice-president of the Alfa Romeo brand in North America, headquartered in Auburn Hills, Michigan, was facing the main task of rebuilding the brand to increase sales. Since its inception, the company had seen inconsistent sales in its efforts to capture the high-end exotic auto market. The brand’s origins in the high-performance and competitive world of auto racing emphasized its true essence of excitement, spirit, performance, seductive design, technical advancements, and seamless interface between driver and machine. Contributing to the company’s sales volatility were numerous factors, including macroeconomic forces, consequential effects of past brand managerial decisions rooted in infidelity to the brand’s origins, and a notable lack of consistent brand management or leadership that had witnessed the appointment of four brand managers over the previous decade. Alfa Romeo’s brand building success was inextricably tied to effective marketing communication. The senior vice-president had to find a way to communicate and instill the brand’s desired exotic and exciting mystique in the minds of consumers.
In January 2024, Ben & Jerry’s Homemade Holdings Inc. (Ben & Jerry’s), a subsidiary of Unilever, was facing several critical decisions. It had been over a year since the company had been sued by its independent board about the company’s decision to sell its Israeli business to a long-time licensee in that country. That situation was resolved with the court ruling against the independent board. However, guiding principles had to be developed to prepare for similar situations in the future. Specifically, the Ben & Jerry’s management team had to work with its independent board to help avoid such incidents from reoccurring. Ben & Jerry’s also had to achieve a balance among the perspectives and demands from various stakeholders, which were sometimes in conflict with each other.
On March 5, 2022, Ronni Kahn sat at her desk in Sydney, Australia, reflecting on what she was going to share at an international conference on leadership. Kahn was the founder and chief executive officer of the food rescue organization OzHarvest, a charity with the goal to nourish Australia through redistributing food and food waste to those in need. Kahn’s work involved a combination of running OzHarvest and being an international ambassador for and keynote speaker on sustainable food practices and living with purpose and meaning. As Kahn reflected on the work that had been done over the last eighteen years, what were the leadership lessons she had learned that she could share with others?
The Procter & Gamble Company (P&G) was facing a proxy attack from Trian Fund Management, L.P. (Trian) after Trian declared a US$3.5 billion position in P&G, equivalent to a 1.5 per cent shareholding, in February 2017. The fund manager called for a reorganization of the company to improve its performance and for a seat on P&G’s board of directors for Trian’s co-founder Nelson Peltz. Over the next few months, both parties discussed Trian’s proposals, but the negotiations broke down in July 2017, and the conflict became public. Trian announced it would put its demands to a vote during the annual shareholder meeting in October. A month before the meeting, P&G CEO David Taylor had to make a recommendation to the board: should the company accept or rebuff Trian’s attempt at gaining influence?
In 2021, Rogers Communications Inc. (Rogers), one of the largest telecommunications companies in Canada, suffered a leadership crisis amid conflict between members of the Rogers family controlling the company. A decision by board chair Edward Rogers to oust chief executive officer Joe Natale triggered a chain of events that pitted Edward Rogers against his mother and two sisters (all board members). The company’s complex governance model, which consisted of a dual-class share structure and the Rogers Control Trust representing the majority shareholders on the company’s board, made it unclear who had effective decision-making power. In the light of this uncertainty, investors owning Rogers Class B non-voting shares had to decide whether to hold on to, sell, or purchase more shares.
In May, 2020, Rio Tinto PLC, a global mining company, blasted a 46,000-year-old Aboriginal site in the Juukan Gorge, an area in Western Australia. While Rio Tinto’s actions were legal, the company was nonetheless widely criticized for its blasting of the sacred site, which contained remains and artefacts dating back tens of thousands of years. Furthermore, investigations revealed that Rio Tinto had knowledge of the sacred nature of the site. Internal investigations also revealed that the company had earmarked the site as being important to the Aboriginal peoples. The reaction to the blast was swift and unforgiving.
Dual-class share structures offer stakeholders real advantages, but more firms need to follow best practices in deployment to mitigate the risk of abuse. This article highlights four different ways that Canadian firms, including Rogers and Shaw, implement dual-class share structures. It also discusses the related advantages and risks. Advantages include how dual-class shares facilitate the execution of strategy; encourage founders to publicly list stock; insulate the firm and management from short-termism; protect founders from activist shareholders; and protect firms making capital expenditures with long pay-off horizons. Disadvantages include how dual-class shares create agency issues and conflicts of interest, especially when controlling shareholders have minimal economic interest; create an inferior class of shareholders; allow entrenchment of management with directors often elected by controlling shareholders; increase the likelihood of related-party transactions; and reduce the likelihood of independent/non-executive board leadership. The article finishes with some governance considerations, including how the Canadian Coalition for Good Governance developed a dual-class share policy that encourages best practices for companies with dual-class shares. Some of the key principles include subordinated rather than non-voting shares, meaningful equity ownership, and mandatory sunset provisions.
Shareholder primacy has been a widely accepted norm in the business community for decades, leading executives and directors to focus on maximizing profits along with the value of the corporation’s shares. Nevertheless, critics have long questioned whether public companies should prioritize the interests of investors over the interests of other stakeholders. The most recent analysis of the legal standard that dictates the fiduciary duty of directors in Canadian corporate law was issued in 2008 when the Supreme Court of Canada released the BCE v 1976 Debentureholders decision. Some scholars theorized that this decision signalled a shift toward a more stakeholder-friendly model of corporate governance by calling on directors to act in the “best interests of the corporation.” This article provides an overview of the framework governing the fiduciary duty of directors with an analysis of the historical and economic context that has underpinned this area of corporate law since the Great Depression. It then examines what director duties within Canada might look like in the future while offering insights from the landmark BCE decision to help manage the director’s dilemma. The BCE decision suggests that when competing interests arise, the overriding principle for corporate directors should be to act in the best interests of the corporation by making decisions that aim to drive long-term success, as opposed to immediate profits and increased share value.
NorLand Limited (NorLand) was a construction company based in British Columbia, Canada, with operations in Alberta, British Columbia, Quebec, and the United States. Having grown primarily by acquisition, the company was moving toward an ambitious goal: to achieve CA$500 million in revenues and CA$50 million in net operating income (NOI) by 2025—the 500-50-25 goal. The main questions facing Dave Reynolds, NorLand’s chief executive officer (CEO), and his leadership team revolved around not only expanding the business to achieve this target but doing so sustainably, while giving NorLand’s business units the latitude and freedom that had drawn them to join NorLand in the first place.
Ireland-based Ryanair DAC (Ryanair) was the largest European low-cost airline, serving approximately 120 million customers in 34 countries in 2016–2017. The airline was considering entering new markets as its growth in existing markets had plateaued. The untapped Ukrainian market offered a huge growth opportunity for Ryanair as the country had recently signed a free-trade agreement with the European Union (EU) and was about to enter a visa-free regime that would increase travel between Ukraine and the EU. However, in July 2017, Boryspil International Airport (KBP) in Kyiv returned a co-signed service agreement that withheld several important terms and breached earlier verbal agreements it had made with Ryanair. KBP didn’t want to provide a preferential tariff for Ryanair’s flights to London because this would conflict with existing routes. It also insisted on solving disputes in Ukrainian courts rather than in UK courts, as Ryanair preferred. As the airline was confronted by KBP, Ryanair’s chief executive officer, Michael O’Leary, needed to decide what to do in order to enter the Ukrainian market: What were the available entry options and entry timing? How should Ryanair proceed?
In 2011, the vice-president of Craig Manufacturing (CM)was preparing a presentation for the company’s advisory board and senior management. Craig Manufacturing, based in New Brunswick, Canada, was a privately held, third-generation family business that manufactured attachments for heavy equipment used in large construction projects in Canada and the United States. The company had achieved a strong reputation by pursuing a differentiation strategy based on product quality, leading technology, and exceptional customer service. However, the company needed new revenue streams, as it was experiencing less demand for its customized heavy equipment attachments. The vice-president was about to suggest launching a new product line by producing attachments for mini, or compact, construction equipment and growing the company with a cost leadership strategy. However, entering this market would mean focusing on standardized products, in contrast to the company’s traditional focus on customized attachments. Would the new product line and its cost leadership strategy help propel the company to be the leading manufacturer of industrial attachments in Canada and the United States?
On January 13, 2019, the Gillette Company aired the advertisement “We Believe: The Best Men Can Be.” After the airing, both the company and its chief executive officer were subjected to backlash. The advertisement, launched amid the Gillette brand’s declining market share, addressed the #MeToo movement, sexism in the boardroom, and bullying, and asked viewers, “Is this the best a man can get?” Although the advertisement was intended to challenge men to end toxic masculinity and abuse, it became both the most liked and the most disliked advertisement in YouTube’s history. Six months after the airing, The Procter & Gamble Company, reported a US$8.3 million writedown in its Shave Care business, represented by the Gillette brand, leading some observers to wonder whether the polarizing reactions to the advertisement had led to the writedown. What was The Gillette Company’s fiduciary responsibility in the era of the #MeTooMovement? Should its chief executive officer and visionary of the controversial advertisement be fired? Should he be promoted for confronting such a serious societal issue? Or should no change be made in the corporate structure?
After the management of Magna International Inc. (Magna) tabled a proposal to shareholders in May 2010 to acquire all of Frank Stronach's Class B voting shares for approximately US$1 billion, vociferous opposition emerged, heavily criticizing the process by which the terms had been agreed on and the lack of information provided by the board. The Ontario Securities Commission ruled that Magna needed to provide more information to shareholders. In compliance with that order, Magna released an amendment that included a report from its financial advisor, its advisor’s advice to the Magna board, and PricewaterhouseCooper's evaluation of the deal. In late August 2010, a Magna shareholder needed to decide whether to keep or sell her shares, and wanted to understand what amount, if any, would have been appropriate for Stronach’s Class B voting shares. As a consumer conscious of the environmental, social, and governance aspects of a corporation, she was also concerned whether Magna’s board and special committee had applied good governance principles.
After the former chief executive officer (CEO) of U.S.-based Starbucks started to voice his political opinions in September 2016, both Starbucks and the CEO faced backlash. As the CEO and former chairman of a large company, he may have felt entitled to voice his opinion as an individual voter. However, public backlash—from both sides of the U.S. political spectrum—suggested that commentators, looking to respond to him, were actually targeting Starbucks. In 2019, the challenge for Starbucks’ new CEO was to find a way to tactfully extricate Starbucks from political conversations.
In February 2018, the owner of Jump Gymnastics Inc. was preparing for her company’s upcoming strategic planning cycle. The privately owned children's recreational sport business located in Vancouver, British Columbia, delivered gymnastics programs designed to prepare children for lifelong sport participation and healthy living. In 10 years, the owner had successfully grown the company based on her passion for helping children reach their full physical potential. Now operating in two locations, the company had expanded into hosting birthday parties and other special events. An expert in her field, the owner had also started to engage in outside consulting work. She wondered what additional opportunities laid ahead. Should she pursue growth through new locations or new programs, expand her consulting and public speaking practice, launch a coaching certification program, or focus on the company’s core operations? She wanted to consider not only the best use of her time and energy but also the option that would provide the most financial security.
In late 2015, the executive vice-president and chief financial officer of Fortis, Inc., a homegrown energy delivery company based in St. John's, Newfoundland and Labrador, was preparing to meet with the company’s leadership committee. On the agenda was whether Fortis should make an offer to acquire ITC Holdings Corporation, the largest independent transmission utility in the United States. Fortis had a proven track record of acquiring regulated utilities, and if the ITC deal went ahead, it would mark Fortis’s most significant acquisition in its history. Should Fortis move ahead with the acquisition, or was taking on ITC too big a risk?
In late 2015, the chief executive officer of Shaw Communications was considering whether to reduce or divest the company’s media assets. Shaw Communications had been founded as a cable television provider and, over the years, had grown its consumer connectivity businesses to include Internet services, satellite television, landline telephony, and, most recently, cellular network services. Similar to most other major Canadian telecommunications companies, Shaw Communications had acquired media assets, including the Global Television Network and specialty channels such as History and Treehouse. Selling all or, some, of these media assets would strengthen the company’s balance sheet and help finance the expansion of its cellular network. The company’s chief executive officer needed decide how important media assets were to the company’s core strategy.