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20 L RI AP Diverse and inclusive leadership has the power to transform Canadian competitiveness

Canada’s prosperity depends in large part on innovation, and innovation requires new ways of thinking — diverse thinking. If your board directors aren’t focused on innovation and helping you to think in new ways, your company will be left behind.

RAHUL K. BHARDWAJ, LL.B, ICD.D President and CEO, Institute of Corporate Directors

It’s time to bring more diversity to the boardroom.

Today only 5% of Canadian companies have a female CEO and just 14% of board seats at publicly traded firms are occupied by women. Clearly, more progress can be made. Take the important step of complying with the federal government’s new diversity disclosure requirements. To help your Board, use the ICD Board Diversity Toolkit at icd.ca/diversity.

Visit ICD.ca/diversity to learn more. Contents 28 LUCARA DIAMOND Eira Thomas is redrawing the face of a famously macho 2 EDITOR’S NOTE industry (oh, and revolutionizing how 4 ADVISORY BOARD diamonds are tracked and sold, too) 8 7 THINGS Why working from home isn’t a career killer but your thinning 34 hair might be TRANSALTA How Dawn Farrell 11 NEED TO KNOW turned a potentially Why a winner-takes-all disastrous edict—to approach is the best way to spur innovation shutter its coal plants— into a whole new future 15 BIG IDEA in renewable energy Want to do your part in the fight against climate change? Put 40 more women on your board of directors SIENNA SENIOR LIVING Lois Cormack spent 18 TL:DR years as a personal care How your company worker and nurse. Now, can take a bite out of as CEO, she’s using what

DEN the market for edible she learned to build a FO cannabis products business that empowers frontline workers

EPHANIE 20 ASK AN EXPERT ST Newsletters, emails GE) and town halls might PA not be the best way 44

(THIS to communicate with Carinne FORTIS your employees Chambers-Saini, The Newfoundland CEO of Diva WOMEN LEAD HERE TYNIUK; power company has 22 THE EXCHANGE International OUR FIRST MAR worked hard to increase Page 48 MEG Energy CEO female representation EPH ANNUAL Derek Evans has some ST in its ranks. Now it’s

BY BENCHMARK ideas about how to bringing that same focus reduce greenhouse STUDY OF to its next big challenge: gas emissions without GAZINE WOMEN IN kicking coal MA shutting down the

SS oil sands CORPORATE LEADERSHIP BUSINE 56 WEALTH 48 ON How North Growth T Management’s Erica Lau GOOD ADVICE Three leaders on the REPOR beats the index—while R best way to create an

FO eschewing oil and gas Y stocks inclusive organization USIVEL

CL 60 TURNING POINT EX Jennifer Twiner 50 McCarron is building

APHED Thunderbird HONOUR ROLL GR Meet the 73 publicly

TO Entertainment into a global studio thanks traded companies on PHO to the explosion in our inaugural Women VER streaming content Lead Here list CO

APRIL 2020 / REPORT ON BUSINESS 1 Editor’s Note

April 2020, Volume 36, No. 8 Editorial Editor JAMES COWAN Assistant Editor DAWN CALLEJA Senior Editor JOHN DALY Copy Editor LISA FIELDING Research CATHERINE DOWLING, ANNA-KAISA WALKER Art Art Director DOMENIC MACRI Associate Art Director BRENNAN HIGGINBOTHAM Director of Photography CLARE VANDER MEERSCH Contributors MICHAEL BARCLAY, STEVE BREARTON, JOE CASTALDO, TREVOR COLE, TIM KILADZE, JASON KIRBY, JOANNA PACHNER, JUDITH PEREIRA Advertising Chief Revenue Officer ANDREW SAUNDERS Managing Director, Creative Studios and Ad Innovation TRACY DAY What does “good” look like? Senior Manager, Special Products ANDREA D’ANDRADE Product Manager RYAN HYSTEAD That was our question at the outset of our work on Women Lead Here, a new Production report on the extent of female leadership at Canadian corporations. Our goal Managing Director, Print Production SALLY PIRRI was to find organizations at the forefront of appointing women into executive Production Co-ordinator roles. But we weren’t sure whether even the front-runners on this issue would ISABELLE CABRAL look particularly impressive. Publisher PHILLIP CRAWLEY All available evidence suggests Canada’s C-suite is a long way from achieving Editor-in-Chief, The Globe and Mail DAVID WALMSLEY gender parity. Women held just 8% of the senior executive roles in large compa- Managing Director, Business nies last year, according to a report by Rosenzweig & Co. That was a drop from and Financial Products nearly 10% in 2018 and a meagre three-percentage-point improvement since the GARTH THOMAS Editor, Report on Business consulting firm began tracking the data in 2006. DEREK DECLOET Regardless of our results, we wanted to set a benchmark for all companies to assess themselves against. The research started with Canada’s largest 500 Report on Business magazine is published 10 times a year by The Globe publicly traded companies, as we evaluated the top three tiers of executive and Mail Inc., 351 King Street E., Toronto leadership, from the CEO to senior vice-presidents (or their equivalents). Ulti- M5A 0N1. Telephone 416-585-5000. mately, we identified 73 companies in which women held an average of 44% of Letters to the Editor: [email protected]. the executive roles. Some firms have achieved gender parity; a handful have The next issue will be on April 24. more women than men in their highest echelons. These firms—which span the Copyright 2019, The Globe and Mail. country and multiple industries—are what “good” looks like in Canada today. Indexed in the Canadian Periodical Index. Advertising Offices In this case, good isn’t good enough. Our team worried about celebrating Head Office, The Globe and Mail, results that still, on average, fall short of gender parity. Throughout this project, 351 King Street E., Toronto M5A 0N1 an advisory panel of experts guided our decisions. On this point, they offered Telephone 416-585-5111 or toll-free 1-866-999-9237 clear advice. Advocates often focus on naming and shaming corporations that Branch Offices fall short of societal expectations. Our advisers suggested there is also a need to Montreal 514-982-3050 “name and fame” companies leading the way. The goal is to highlight strategies, Vancouver 604-685-0308 Calgary 403-245-4987 cultures and mindsets that lead to tangible improvement. Email: [email protected] Our survey reflects the current state of corporations. We intend to make this United States and countries outside of an annual initiative, tracking progress and noting the reasons it improved. North America: AJR Media Group, Send feedback to I’d be remiss if I didn’t thank our advisory board for their invaluable guid- 212-426-5932, ajrmediagroup@ robmagletters@ globeandmail.com globeandmail.com ance. They were: Lynn Beauregard of Governance Professionals of Canada, Publications mail registration No. 7418. Caroline Codsi of Women in Governance, Rola Dagher from Cisco Systems The publisher accepts no responsibility Canada, Maureen Jensen of the Ontario Securities Commission, Jodi Kovitz of for unsolicited manuscripts, SHIRI KE

#MoveTheDial, Justina Omokhua from Endeavor, Paulette Senior of the Cana- transparencies or other material. H Printed in Canada by Transcontinental OS

dian Women’s Foundation and Louise Taylor Green of the Human Resources Printing Inc. Prepress by DMDigital+1. UR Professionals Association. Report on Business magazine is electronically KO available through subscription to Factiva.com As I said, we started this project with a question. We have an answer—but from Factiva, at factiva.com/factiva APH GR only for now. We can only hope that the good of today will look completely or 416-306-2003. TO unacceptable in the years to come. /James Cowan tgam.ca/r PHO

2 APRIL 2020 / REPORT ON BUSINESS

Advisory Board

KRISTEN GALE ANIL ABROL CEO, THE TEN SPOT CEO, ECO GUARDIAN Operates and franchises Designs, makes and a chain of beauty bars distributes compostable As we grow, we want food and consumer every franchise partner packaging who joins our system Growth should come to have the same level with a “highly flammable” of care and attention as warning. It’s easy to lose Secrets of scale our first-ever partners. focus and undermine One of our core values is everything you’ve In our last issue, we profiled four “love the details,” and this achieved. Beware the companies that have gone from buzzy philosophy has enabled magpie syndrome of us to create a robust and chasing after so many startups to sustainable enterprises. systematic framework. bright, shiny objects. Then we invited executives from the As we award more beauty Learn to say no. Trust Report on Business list of Canada’s bars, we first ensure in the process that got to hire enough support you here. Redouble your Top Growing Companies to offer their personnel at our head efforts around targeting own advice on making sure a business office to be proportional the right customers, and to the needs of our build on that momentum remains sound as it scales. franchise partners. of success.

SURVIVAL RATE OF BUSINESSES OVER TIME To put it simply, happy (NUMBER OF YEARS SINCE COMPANY’S FOUNDING) people do good work, 100% and good work pays off

80 TIM MCGUIRE CEO, MOBILE KLINIK PROFESSIONAL SMARTPHONE REPAIR Runs a network of smartphone and tablet repair storefronts 60 Mobile Klinik grew from 40 to 80 stores in 2019. We plan to grow just as quickly in 2020 and beyond. There are three key things to ensure we remain sound as we scale. First, communication: We focus on sharing information, staying focused and engaging our teams 40 in the mission and vision, while ensuring all channels of feedback are open to keep a pulse on the organization’s Send us your health. Second, HR: We put the right people in the right thoughts at roles to ensure we remain true to our strategy as we robmagletters@ rapidly scale the organization. The growth of our store 20 globeandmail.com, tweet us count is planned six or more months ahead with signed @robmagca leases and committed opening dates, so we know what roles we will need to fill. Finally, capital: It’s the lifeblood of explosive growth. Being better than anyone in our sector at raising the capital we need has been 0 key to winning the race. >1 12345678910

4 APRIL 2020 / REPORT ON BUSINESS

Advisory Board

JUDY KAYE ANDREW MONKHOUSE Beware the magpie CO-FOUNDER, OASIS AQUALOUNGE MANAGING PARTNER, MONKHOUSE syndrome of Operates a private, female-focused LAW EMPLOYMENT LAWYERS sex club in Toronto Practises labour and employment law chasing after Oasis Aqualounge continues To put it simply, happy people do so many bright, to experience year-over-year good work, and good work pays off. shiny objects growth. To ensure the business We have grown from a one-person can consistently provide a high shop to a team of 25 in seven years. level of customer service, we focus Law is a conservative business, on two things: employee training and each time we expanded, we and development, and software had to challenge our professionals’ RICHARD BEAUMONT automation. We continue to develop mindsets. Our guiding principle CEO, GREEN STANDARDS formal processes of all different has always been improving client Helps firms redistribute used office kinds. We document these in experience while enhancing internal furniture, equipment and supplies training manuals and videos, as experience. For us, it’s people: having the right we recognize that individuals learn The only way to succeed as an people in place at the right time, best in different ways. In terms of entrepreneur is to ensure the team working together and adapting to software automation, we provide shares your core values and is open challenges as we position ourselves staff with better tools to track to change. Three quick tips: Be open for ambitious growth targets. Being information, from checklists to about upcoming changes, involve more selective with the projects we inventory to scheduling. We also non-management team members accept and having the right systems look for ways to automate how we in preparing for those changes, and and processes in place to expedite communicate with and reward our assess whether the changes do what the onboarding has been key to valued customers. you expected them to do. achieving this growth.

Leaders should be defined by what they do, not what they are.

ISC is proud to be among those companies recognized for leading the way for the next generation of female executives. We’re committed to ensuring strong representation across the board, and on the Board.

ISC is the leading provider of registry and information management services for public data and records.

company.isc.ca TSX: ISV WE’RE PROUD TO CELEBRATE WOMEN IN LEADERSHIP

Hudson’s Bay Company congratulates all of those included in the inaugural Report on Business Women Lead Here list. Seven Things2 In-house counsel are too cautious $17 million 1 Amount 04/20 the average organization is SEVEN IDEAS YOU NEED TO HEAR losing each year because in-house % 55— lawyers offer 15 64 44 18 advice that is — .4 3 Working 5 % Older consumers too conservative, 3 according to have embraced %

8 4 from home . Gartner research. 5

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1 varying their shopping

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per lawyer in an 8 make purchases both on- and off-line.

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your career average-sized U The majority of these shoppers are over

% legal department. 5 the age of 45, according to Nielsen. 6 1 5

“We examined the relationship + between the extent of telecommuting and career success.... Results indicated telecommuters and non- telecommuters did not differ in number of promotions, but EMPLOYEES EXPECT THEIR telecommuters experienced lower salary growth. Additionally, CEOS TO SPEAK OUT the extent of telecommuting was Fully 92% of workers want their executives to be vocal about one or more negatively related to promotions societal issues, according to a survey by Edelman. and salary growth, indicating TRAINING AUTOMATION’S it is not simply telecommuting FOR JOBS OF IMPACT ETHICAL INCOME CLIMATE per se that affects career THE FUTURE ON JOBS USE OF TECH INEQUALITY DIVERSITY CHANGE IMMIGRATION success, but rather the extent of telecommuting.” —Timothy D. Golden and 484% 81% 81% 78% 77% 73% 62% Kimberly A. Eddleston, Journal of Vocational Behaviour

There’s a connection between DRINKERS leadership and locks 5 Researchers at the University of Otago in New Zealand digitally LOVE HARD altered photographs to show men with varying levels of hair loss. The results revealed respondents preferred a leader with SELTZERS a full head of hair. Meanwhile, men with shaved heads were Products like White Claw have seen viewed as most dominant. exponential growth. ($US) $1.6 BILLION ESTIMATED AGE FULL HEAD OF HAIR SHAVED HEAD BALDNESS OF A MAN WITH: 40.7 YEARS 41.3 YEARS 42.9 YEARS

7 $1.2 BILLION

Americans VIEWS ON TRADE are increasingly 2020 18 79 $496 MILLION supportive 2018 25 70 2016 34 58 $210 of trade MILLION 2019 The majority of Americ6ans now see THREAT TO ECONOMY international trade as a chance for 2018 OPPORTUNITY FOR ECONOMIC GROWTH economic growth, according to Gallup. RETAIL RESTAURANTS

8 APRIL 2020 / REPORT ON BUSINESS At Chartwell, DIVERSITY is our SUCCESS

As Canada’s largest retirement residence operator, we are committed to gender diversity. 82% of our over 15,000 employees, 75% of our Senior Vice Presidents and 50% of our C-suite are women. In addition, 37.5% of our independent Directors are women. Together, with all of our employees, we are proud to be Making People’s Lives BETTER.

Need to know

A big thing or a small? The winner takes all is the best approach for spurring innovation, according to new research

Imagine you put a group of artists in a room and tell them, “We need you to be creative! Right now!” says Joshua Graff Zivin, econom- ics professor at the University of California at San Diego. It probably wouldn’t yield great art, but it’s exactly how employers expect innovation to hap- pen every single day. For years, Graff Zivin and his col- league Elizabeth Lyons, an assistant professor of man- agement at UC San Diego, have been preoccupied by CIA GAR AN RY ION AT TR US ILL

APRIL 2020 / REPORT ON BUSINESS 11 Need to know

what drives innovation. “Why do people lates. “Since there’d only be one winner, become innovators? What makes inno- we actually destigmatized failure,” he says. Rain it in vators better at innovating? Can anyone Entries were judged by a panel of six innovate, or are you either an innovator or (three from the industry and three from It’s common knowledge not?” asks Lyons. Perhaps most interesting academia) and evaluated on a scale of one that people shop more is the question of whether—or how—the (idea not novel; already on the market; do when the weather’s nice, process might be hacked. Asks Graff Zivin: better next time) to five (a brand new, very but is it that simple? “We “How do we create incentives to encour- impressive idea). Groups actually outper- had our suspicions that age innovation when it’s a wild uncer- formed individuals in both categories, it wasn’t,” says professor tainty by its very nature?” likely because they were able to draw on JoAndrea Hoegg from Looking for answers, the research- diverse skill sets. But teams in the winner- UBC’s Sauder School of ers paired with biotechnology company takes-all model performed the best. Fur- Business. To learn more, Thermo Fisher Scientific, which needed thermore, participants were surveyed on Hoegg’s team partnered help with a real-world problem: creating their risk tolerance, with those most will- with an eBay-esque software to help small health care clinics ing to take chances performing best in the European company to share medical equipment. The research- winner-takes-all contest. cross-reference a year’s ers invited non-management employees The moral of this story? Getting more worth of shopping and from the company and nearby tech firms innovation happening at your workplace weather data. Some to tackle the challenge. (Participants might be as easy as throwing some money findings were obvious: weren’t told the exact problem until go at the problem. When searching for an “When it’s sunny, people time.) They could choose to work alone outside-the-box solution, a winner-takes- are more likely to buy or in small teams; $15,000 would be up for all competition could be the best way to sunglasses,” says Hoegg. grabs as a prize. get latent risk-takers to make the needed There was a big caveat: Here’s the catch: The 132 participants leaps. While you’re at it, giving closer and “Only if they’re appealing.” were split into two groups. One was vying careful consideration to human psychol- Consumers will pay for for a $15,000 winner-takes-all top prize. ogy can help companies overcome barri- quality shades because of The other group was offered more modest ers to innovation. “mental simulation”—you prizes for the top 10 ideas. Once they knew “Talent and ability are extremely impor- imagine yourself enjoying the prize, they could determine what level tant,” notes Graff Zivin, “but put the most the sunshine thanks to fab of effort to put into the submission. Would talented person in the world in an environ- new glasses. A cheaper innovators try harder for a juicier but less ment where the incentives run counter pair invokes opposite likely payday? Or would the longer odds to creativity, and they’re not going to be feelings; there’s a fear that discourage people from completing a creative.” If you put a group of artists in a the glasses won’t fit or submission? “This is what we were really room, you cannot just demand creativity. will fall off, and you won’t observing,” says Lyons. You can, however, provide all the neces- enjoy the sun. But just The results surprised both researchers. sary tools, remove unwanted distractions when the co-ordination “We expected fewer submissions from and offer incentives for those who deliver between weather and the winner-takes-all groups, because the results. “In a world where you want inno- supplies seemed perfectly chances of winning were so much lower,” vation, you not only want to remove logical, there’s a wrinkle. says Lyons. But the number of submissions unnecessary roadblocks, but you want “We found this standard was roughly equal (20 and 22). Knowing to think deeply and thoughtfully about effect just doesn’t work they were less likely to win made partici- incentives.” In short, a fat cheque won’t for rain,” says Hoegg. pants less intimidated, Graff Zivin specu- hurt one bit. /Rosemary Counter She thought consumers would be investing in umbrellas and raincoats when it poured, but they did not. “We speculate WE DON’T FOLLOW rain tends to be seen as THE RULES preventing behaviours rather than enabling them. Snow makes you think of skiing; rain makes you Almost every company has a code of conduct for its employees. The language used to want to stay in and wait it express those rules might affect whether workers obey them, according to new research out.” Stores could use this by Maryam Kouchaki, a professor at Northwestern University. Working with two col- leagues, Kouchaki conducted a series of experiments in which participants were asked insight to sell their gear, to complete a task after reading an ethical guide. Half were given an impersonal set of she notes. Consumers rules (using words like “employees” and “members”), while the others received one with might want to remember “communal” phrases (such as, “We value integrity in all aspects of our work”). Surpris- this tip: “Look out the ingly, individuals who read the communal codes were more likely to cheat on subsequent window before you buy,” tasks. It doesn’t pay to be touchy-feely. /James Cowan she says. /RC

12 APRIL 2020 / REPORT ON BUSINESS

O THE H&R REIT TEAM!

H&R REIT embraces the philosophy that the best leadership is diverse leadership. By recognizing the achievements and talents of our people, we have been able to create a dynamic executive team which is a foundation to our success.

Thank you to The Globe and Mail for ranking H&R REIT on the inaugural list of Report on Business "Women Lead Here" companies.

www.hr-reit.com Need to know

BIG IDEA the hundreds of studies demonstrating the benefits that come from better repre- sentation of women and people of colour Greener pastures in positions of authority. To wit, a recent study from the University of Calgary’s New research shows adding women to a board isn’t just an Haskayne School of Business shows com- issue of gender equity. It’s environmentally friendly, too panies with women on their boards per- form better on environmental issues than those without female representation. There were still three companies on the Using data from Sustainalytics, a firm that S&P 500 with all-male boards at the start rates companies’ sustainability, research-

K of 2019. By the end of the year, there were ers found boards with women directors ZY

RC none. The holdouts—Skechers, the foot- were more likely to have formal environ-

BA wear maker; travel website TripAdvisor; mental policies, protecting biodiversity and Copart, an online vehicle auction- and reducing air emissions. HANNA eer—all added women within the span of “Diversity, put simply, is good,” says Irene ION a few months. Herremans, a Haskayne professor who co- AT

TR It’s a bit surprising that companies have authored the study with her former PhD US been slow to diversify their boards, given student Jing Lu. As the pair writes: “Diver- ILL

APRIL 2020 / REPORT ON BUSINESS 15 Need to know

sity allows for a healthy mix of in 2017—had boards completely devoid of women. Women held just knowledge and experience to 17.8% of the board seats covered by the Statistics Canada study. A year improve the decision-making later, there was a paper-thin increase to 18.1%. process of the board.” And while the benefits of adding women to boards is well-docu- Moreover, the researchers mented, the exact reasons are unclear, says Claude Francoeur, a pro- found the beneficial impact of fessor at HEC Montréal and a leading expert on the subject. “One thing having women as directors is that’s been assumed,” he says, “is that a more gender-diverse group at more pronounced in environ- the board table tends to discuss issues more in-depth than a board that mentally sensitive industries, is just men alone. It helps break down the groupthink that often hap- such as mining, forestry and pens in more homogeneous groups.” energy, compared with other If reams of evidence show diversity improves corporate governance sectors, such as finance. “Women and performance in such increasingly important areas as environmen- think a little bit differently than tal and social sustainability, why men. So they bring a different SHARE OF WOMEN ON CORPORATE BOARDS, are North American compa- point of view to a board,” says BY SELECTED INDUSTRIES nies slow to appoint women to Herremans. They also offer boards or the C-suite? “It’s not unique skills. By comparing UTILITIES easy to explain,” says Francoeur. directors’ biographies, the study FINANCE “[Men] have subconscious found 18.6% of women have MANAGEMENT OF biases. It’s human nature. You 25% COMPANIES AND expertise in sustainability, com- ENTERPRISES tend to want to hire people that pared with 5.1% of men. Women are similar to you.” DISTRIBUTIVE TRADE more often have backgrounds To overcome that phenom- ENERGY in government or academics, or enon, corporations in Euro- 20 working for NGOs; those varied MANUFACTURING pean countries such as Ger- experiences lead them to value CONSTRUCTION many, Spain and France have different corporate objectives. been legally required to have Men are inclined to focus on 15 women holding at least 40% of the economics of business and to their board seats. (Skechers and be more skeptical about the envi- the other holdouts made their ronmental effects of their indus- changes in the face of new diver- tries. “Women tend to be a bit 10 2016 sity regulations in California.) more practical and risk-averse,” No such quotas exist in Canada, says Herremans. though there’s mounting pres- The researchers do worry 2017 sure for governments and other their study’s implications might 5 bodies to push harder for diver- be misconstrued. “We don’t sity in corporate governance. want companies to interpret As of Jan. 1, companies gov- our results as saying, ‘Okay, if erned by the Canada Business I just put more women on our 0 Corporations Act must provide board, we are going to have bet- information to shareholders ter environmental performance.’ about what efforts they are making to nominate women and members A That’s not what our intention of minority groups to their boards and senior management. If they NAD CA is. We want them to put quali- have no such policies, they must also explain why. S TIC fied women with environmental That might eventually help women and break corporations’ bad IS AT

experience on their boards,” says habit of choosing board members from a mostly male pool of current ST

Lu, now an assistant professor of or former CEOs. “It’s a vicious circle,” says Francoeur. “It’s really hard CE accounting at the University of to get out of that.” /Anthony A. Davis UR SO Guelph’s Gordon S. Lang School of Business and Economics. The researchers observed companies appointing one or Big Idea is produced with the support of our advisory panel two women to their boards for the sake of optics, in a practice dubbed “twokenism.” But in Can- ada, even symbolic progress is slow. Statistics Canada released Yrjo Koskinen, Associate Dean, Research; Yolande Chan, Associate Dean, Haskayne School of Business Research at Smith School of Business a study in January of 10,108 pub- Stephane Massinon, Director, Public Nancy Evans, Executive Director, lic, private and Crown corpora- Relations; Haskayne School of Business Marketing and Communications, tions that revealed the majority Smith School of Business. of them—61.7% in 2016 and 61.2%

16 APRIL 2020 / REPORT ON BUSINESS Women key actors in our transformation. Need to know

in the workplace and operating TL;DR machinery or doing your work if you’re impaired.” Major players Chew on this Beer companies have been ex- ploring the edibles space since On Oct. 17, 2019, a full year after cannabis was legalized in Canada, 2018, when Molson Coors Bever- licensed producers were officially allowed to submit their edible age partnered with Hexo, Con- and topical products for government approval. Cannabis-infused stellation Brands invested $5 bil- gummies, cookies and teas have now begun appearing on store shelves lion into Canopy Growth Corp. in a rollout that was both slower and less profitable than expected. and Anheuser-Busch InBev Here’s how this leg of legalization will affect your business teamed with Tilray. Indepen- dents are getting into the game, too—in 2019, Moosehead, the The background oldest and largest independently On the campaign trail in 2015, Jus- owned brewery in Canada, tin Trudeau promised to legalize announced plans to work with recreational cannabis use. The Sproutly Canada to develop a following year the Prime Min- line of cannabis-infused drinks. ister’s government released a Munchies plan for legalization. As of Oct. Neal Brothers, a healthy snack 17, 2018, Canadians could legally business based in Richmond buy, use, possess and grow rec- Hill, Ont., teamed with News- reational pot. But while they trike Brands Inc. in 2018, becom- were allowed to cook with can- ing the first specialty food com- nabis, the sale of edibles and pany to ink a deal with a cannabis topicals was not yet legal. That firm in Canada. And Canopy didn’t happen until a year later, and Namaste Technologies are when the government officially both betting on sweets: Canopy allowed licensed producers to is working with Hummingbird submit their edible and topi- Chocolate, a family-run choc- cal products for approval. olatier from Almonte, Ont., Why did they opt for a while Namaste acquired a gradual rollout? 49% stake in Choklat, a Cal- In a word: caution. Accord- gary chocolate company, ing to Rebecca Haines-Saah, early last year. an assistant professor at the Market outlook University of Calgary’s Cum- In a 2019 University of Guelph ming School of Medicine, Cana- survey, more than half of respon- dian regulators travelled to U.S. dents were interested in trying jurisdictions where edibles had edibles, including many who been legalized at the same time had never smoked cannabis. as other cannabis products. The But despite strong interest, officials heard “about adverse investment dealer Cowen & Co. experiences and health conse- tory 60-day review, so the earli- EDIBLES 101 significantly reduced its sales quences,” explains Haines-Saah. est a product could have been Edibles are forecast. The firm had origi- To avoid those pitfalls, the gov- approved was Dec. 17. Few com- cannabis- nally predicted $7.2 billion in infused drinks ernment opted for a gradual panies wanted to start produc- and foods, such sales for 2020 but has revised approach to legalization, start- tion without knowing whether as chocolates, its expectations several times, ing with the modes of consump- they’d be allowed to actually sell candies, mints, most recently in February, when tion Canadians had the most their products. baked goods it downgraded Aurora Canna- experience with. What’s changed for employers? and dissolvable bis, Sundial Growers, and Til- strips. What’s actually available now? Very little, according to Kristi ray to “market perform” from Not as much as consumers would Searle, a certified human re- “outperform” and made a new like. The first of the so-called sources business strategist and projection of only $3.5 billion in cannabis 2.0 products hit shelves owner of Peoplebiz Consulting legal market sales for the year. on Jan. 16, but that stock quickly Inc. “It falls under health and Cowen’s report places part of sold out. It’s a consequence of safety,” she says. “It’s not just the blame on “the slower than the government’s approval pro- about cannabis—it’s the same for expected rollout of cannabis 2.0 cess, which includes a manda- prescription drugs. You can’t be products.” /Stacy Lee Kong

18 MARCH 2020 / REPORT ON BUSINESS At Colliers, diversity and inclusion make us better.

We’re proud to have earned a spot in the inaugural Report On Business Women Lead Here list. We believe that diversity and inclusion strengthen our business by enriching our culture, acclerating success for our clients and helping us deepen relationships among our people, teams and communities.

We pride ourselves in attracting, developing and retaining top, diverse talent from around the world. We work hard to foster an environment in which everyone at Colliers, regardless of background, gender, ethnicity, age, religion, sexual orientation or experiences, feels respected and comfortable bringing their authentic selves to do their best work in a workplace where they feel like they truly belong. This is how we intend to lead our industry into the future. collierscanada.com 20 APRIL 20 20 / REPOR The the T emp yo ex the human to other emp of is thing be ba Th pr ca I’v ASK fr ar and Bu be a Wo yo Wi man as carving re the wr ba ON per om fic ound, quir a ov pl d nning u ur dig inclusi t ong. a positi is lliams. y wo per fe BUSINE wa ta e yo mean ains y lo lo e selfish AN ide wa k, mea “no-mea s a uld thing st emp co int ed ye yment u’ ar be rk te it! ve k, by re “While e nt EXPER st go wh mmis re ve rs animal ” e pl Laur o, to ty ve ga in We sour SS at ria na If she by re (o lo en ing ac . the can st s mo at n pr ion—bu question ev “Y it as bur ye quir tur r ar ’r arting e, “wr re ev sa a matter t” ov nothing) ce sa sa e ery ou mea T ve e onl es pos serv Wi no yo be la a la e, int er meat ge not pr zo ys ry per s ide ed ong. tionships, d pa wa tha one is u’ w la y rs . yo lliams, oducts sib . ne ve tles ba “C Yo e with re wy in ks. ve done: rt supposed t wr an yo o nt ar u t wh has re ” ’s le in r ak ert lea u not ge s ge ything, see e er u’ Leg A it to a mou member at vo so might can e, a at ta re ong , wh ain to ve caf lots ” a a fr the hit If lve leg ta ev no-meat fit rian all tha sa just ro s om be and at ths. et — er a y, s ys all ast rian t eria to y to turn of fo sa on co yo wa discrimina fr fe char Schulich or to to If isn yo str home I R. Th mea tha delect email new co co Our doing om edb ys uches yo mmunic mplain uld u u’ lea Au cr at iting e ’t a r t zo slet can t re emplo will act u fir egic doct Wi eed ra being ve lo st ye ack , updat claim ab re our st bl mp st er wr ve erizing te ne? lliams. ’t to their all on ock le es entic is pr or-or manag , School ar rs (itself pr about rs ong? ant, a ation, yee happen. y tion sed ve a , ob a br . ohibit pr es, to discrimina the wa human s. offic per ge co ought s lem, e of wn bu der with Ad et this fr ag nt ev ta ement ld a a es caf son but of c. eq t rian halls, gr ainst lack ed en mit emp an sor ce cu sa What Eve uentl Busines et legitima ea emp fr ’s rights we e ything rt ke ys har ts eria Need te om of re t cuisine ain of lo n at to carni tion. at dl sign re Ellen ha ligion d-c y lo ye someone am y, the gular home with diet fo ve ye to case es s, or tha te ods vo kno es is e t re ,” w s one so It wo influenc wh no yo Co so ignor yo sa them not halls do I list Wha hear Cha Linda no bu co to go princip emp solu Ho seem “S another with. yo to be this: Ne the Chu Ne do the a to aw st find a.k.a. Eve ove schedule yo hopefull fo Do ha simp ’s or r ys ta mmunica ne u u u ur ge deleg do , w. w t is oft ay mmunica done ws xt, I rk pefull o ening. es some also document r rything tw emails ve on ag it os rt co tions, need hear don ge lo yo Au sa “Half t’ t car go neg . an ag “If mas ing, and ed in yo en an Fo to let daunting Yo the Chu Au s 50 e Chu, o simp ying t 5, le ff ys pr a ur ain. ing y le wr st my sec sys 000 ur ything at e) minu a rw ee ’t help online er te this D: y in lar tha at u ta emails st y . of notion self , the si 5-D I’ er email a sa ba to e. nec So is bu rs re ong can s. iv as of d tha re “t er sk ar tha co ve tw to te es half inbo onds, delet ge the le . fo else t me tion “T d do e a unr Ne Ac co tion o-do do ty and , t co d m rumb it’ ra , yo “c yo sional in nnects te action to o ta es r under bu inbo /R sign —and t mer and she t with use pe is them. hose mmends s -hour scale bu 4-D ther will mmends kno surv omp s minu ws bet don until wa wo ke some x ar u ur sa this ead ose the under lands t e, of fr in ” and yo fly is ” under under ’s “I of t e ril e sa let equent. dismis y a x. deleg wh emails ling te tha rk pile tw need wl this es junk ’t mary u’ a manag ad er moti fr ey than pile or don laints. few emails. ar yo mes ys y fe of so ” def r—st And with (this te yo s te go ge re re ev action sential, o- one-on- edg at s t “Do ha ded e s edb ga in fo , s, u s co Ou rs Chu. yo can yo u quir question. od t wh ev ery wa ar st , co emails er not ’t at or hour s ve r mail. wo va nizing filing and st Count ta def , it ad si kno ntr e and, then arting u u’ can en re . to yo all ke t er is ack e, ” ntr ” ement ow y st ke ich ve te done. les tha of to be ding might don da e ve uld Doing Ho wn all er y ’t ol, u. of art, ask w ol? . s). yo yo and ing ” s, deal y , t y er w ” ’t u u ”

ILLUSTRATION JOE MCKENDRY A powerful business because of powerful women.

At Fortis, we know that diverse teams produce bolder ideas and better results. That’s why we like to see all types of people at the top. Today, one-third of our executive leaders are women. That’s one of the best records for executive gender diversity in Canada. And that number will continue to rise because gender parity is a top priority for us. When more women are at the table, it’s good for everyone. 22 APRIL 2020 / REPORT ON BUSINESS Need to know

How much of your oil is shipped by rail now? We ship about 26,000 barrels a day of product by rail, half to the U.S. Gulf Coast and half to the U.S. West Coast. We think about rail as a short-term measure while we’re waiting for these pipelines to be built. How do you think the federal government has handled the bottleneck in pipeline construction? I think what industry would like to see is greater clarity on not only pipelines, but on new oil and gas developments. I think Bill C-48 and C-69 (1) were not particularly helpful in providing the clarity the energy industry needs to proceed with new projects. THE EXCHANGE What do you want the Trudeau government to do? I’m not going to say just the Line in the sand Trudeau government. If you go back to the election and MEG Energy CEO Derek Evans knows we need the federal leaders’ debate, to reduce greenhouse gas emissions, but he has I was devastated. The climate a lot of ideas on how to do that without shutting was pitched back and forth down the oil sands. /By Trevor Cole as something you could have different opinions on and different approaches to. There’s When long-time oilsands exec Derek Evans left Pengrowth Energy a only one thing we need to do couple of years ago, his plan was to become an industry advocate. Then about the climate, and that is to came the offer to run a company again. Since taking over as CEO of get after solving these problems. 1. Bill C-48 Calgary’s MEG Energy in August 2018, Evans has found a way to com- Tell me what concrete action bars oil tankers bine both interests, thrusting himself and his company into the head- you want to see. from loading at northern B.C. lines. When Rachel Notley’s Alberta government curtailed heavy oil The challenge is that when you ports, while production in late 2018 to help reduce a supply glut and boost prices, have big problems, we think Bill C-69 places Evans put MEG on record as supporting that decision when a number we have to drive to absolute greater demands on oil companies of much larger producers opposed it. In the lead-up to the 2019 federal decisions—shut down the to consult election, he nosed MEG into the political debate, teaming with two hydrocarbon industry, expand Indigenous

ON other producers to run full-page national ads to push back against pro- the renewables industry. We communities, engage the

BINS posed regulations and tout his industry’s efforts to reduce greenhouse don’t think about taking the public, and RO gas emissions. Between those events, he dealt with the news-making smaller steps that can be consider the UN disruption of an imminent, then suddenly aborted, takeover by Husky impactful. You know, if we’re environmental SHA Oil. With pipeline turmoil and climate politics now a constant in the going to have cars for a while, effects around major APH oil patch, Evans still has plenty to talk about. In the aftermath of the why don’t we increase miles per

GR extraction and

TO rail blockades in support of the Wet’suwet’en chiefs, we began on the gallon from 30 miles to 70 miles? transportation projects.

PHO difficulty of moving oil. That would be a concrete action

APRIL 2020 / REPORT ON BUSINESS 23 Need to know

that would reduce greenhouse perspective, we’re living within attention to the future. So, on Jan. gas emissions. Why don’t we our cash flow. We’re not using 17, when we came back to work, take all the electrical energy in increasing levels of debt or we had to develop a strategy and Ontario that is effectively given equity. So, that’s one definition of a budget. One of the things that away between 11 at night and 5 in sustainable. The environmental makes me so proud to be the the morning, and turn that into one is encompassed in that net- CEO of this company is the way hydrogen and run it through fuel zero target, but also continuing those people responded. They cells for transit or for trucking to leave a smaller footprint as didn’t miss a step. (5) companies? We’ve got our feet you drive forward in terms of Speaking of big transactions that stuck in the mud. We’ve had this greenhouse gas intensity. didn’t happen, were you surprised debate for 30 to 35 years, and Let’s talk about the Husky takeover when Teck Resources pulled out we’ve done very little. Inside the 2. Rachel that didn’t happen in January 2019. of its Frontier oil sands mine? Notley’s NDP hydrocarbon business, we need government Why did Husky walk away? I certainly didn’t have any to drive down our emissions to unveiled the I have no idea. Nobody’s ever inkling. To me, one of the really net zero as quickly as possible. cap in 2015 told me why they walked frustrating things we have to show the Do you support the province was away. We were as surprised as with these big projects of any 100-megatonne cap on annual serious about everybody else was. (4) sort, be it Teck or any other big emissions from the oil sands? (2) fighting climate Maybe you were putting a brave industrial project in the oil and Absolutely. change. face on it, but at the time, you gas business, is we start these Jason Kenney insists the industry 3. 28% of said MEG shareholders rejected processes 10 or 12 years ago, and is actually producing about 68 Canada’s the deal. Was that not right? we walk through and work with megatonnes of greenhouse gases. emissions I think that’s correct. I think Indigenous groups in the area. Is that a legitimate figure? comes from the Husky relied on the fact that We get agreements, we work all transportation I think that’s probably in the sector; the they didn’t get the 66-and-two- of these things to the end, and ballpark. figure is 29% thirds of the shareholders to vote then we find the goal posts are So that leaves a lot of room for in the U.S. for the deal. Most merger-and- shifting on us, yet again. increased emissions. Is that a 4. Husky cited a acquisition specialists would You mean the political goal posts? good thing? lack of progress have told you they got enough Well, yeah. Under Bill C-69, the No. Part of the reason I support on pipeline that if they had extended the minister of the environment had the 100-megatonne cap is I don’t expansion deal, they would have got the 66 the right to cancel that project. and Alberta’s think we’re ever going to get decision to and two thirds. We believe they But when that project started, there. With the work MEG is cut production had over 60. there was no Bill C-69. That’s a doing, we’re actually reducing as reasons it What was the ripple effect very challenging environment. our intensity, and we’re reducing couldn’t muster for MEG? Not only for the people who are sufficient our emissions. investor I had over 500 employees that developing oil and gas assets in Then maybe it should be support. had all checked out. All thought Canada, but also for attracting a 50-megatonne cap. they were either going to be investors. Let’s think about this a little bit working for Husky or not having Given that, what’s the likelihood differently. The gold standard a job. I didn’t have a capital of any new major oil sands project for low emissions is probably the budget. We hadn’t turned our in the near future? Equinor platform in the North It’s low. I think you’ll see Sea that has less than a kilogram companies continue to invest of CO per barrel equivalent. On the day Husky called off its bid, in small brownfield projects— 2 MEG’s stock price dipped roughly That’s an exceptional target. If 40% and Husky’s rose nearly 15% small, incremental additions you want to build a new mine —but MEG continued to climb to existing projects. But a new or oil sands facility, should we greenfield project? I don’t think be proactively setting the target MEG ENERGY CORP you’re going to see a lot of those. 5. HUSKY ENERGY INC that we expect people to meet, Is that partly due not just to the as opposed to setting targets in regulatory environment but also terms of emissions on the back 20% the price point oil is hitting now? end? Carbon taxes are sort of Yes. You know, we all have defensive. Why don’t we change 0 different versions of what we how we think about regulation think the long-term price is in this country? (3) going to be, and these are all -20 MEG makes a point of positioning 40- to 50-year projects. They’re its operations as “sustainable.” not projects that depend on the What makes them sustainable? -40 oil price in the next year or two. There’s financial sustainability So, I would say the regulatory and environmental sustainability. environment is probably the From a financial sustainability JAN. 2019 MARCH 4, 2020 bigger issue. But if you believed,

24 APRIL 2020 / REPORT ON BUSINESS inside of those industries, to invest in. People are going to invest in oil sands stocks; you just need to be the best. You need to demonstrate that you are worthy of their investment inside of that space. What is the industry’s obligation when it comes to fighting climate change? What should you be committed to? The industry should be obligated to do what’s in the best interest of the company at the end of the day. I think your question sort of hinges around, “Well, addressing climate change is not in the as a company, that oil was going best interest of the company.” It EMISSION INTENSITY ASSOCIATED WITH to be $40 or $45 for the next 40 EXTRACTION AND PROCESSING FOR absolutely is. If your motivation years, that would create some CRUDES PRODUCED IN NORTH AMERICA is to produce the last barrel, (KG CO e/BARREL OF CRUDE) challenges in terms of trying to 2 then you need to do what needs redesign your project to make 6. to be done to ensure that you sure you could generate a return CANADIAN OIL SANDS are that barrel. And you need to for your shareholders. find a way to make sure it makes 150 Do you have a price prediction? money for your shareholders at

My personal belief is that WTI NE the end of the day.

is probably going to a range ZO Are you at all concerned about the NORTH

between $50 and $60. I’m not AMERICAN OIL Buffalo Declaration (8) and how

worried about a $45 price. That WEIGHTED CK it might impact investment? is obviously in direct reaction to AVERAGE I’m more concerned about it BLA

78 OPE what I believe will be temporary sucking oxygen out of the room RD SL

demand changes in China. FO in terms of trying to deal with TH FLARE) Where I can see us getting into 50 some of the challenges we have ARELL GLE NOR (FLARE) (NO NT

a very challenging situation, EA as Canadians. I’m as frustrated S CA and much higher oil prices, is if SKA as anybody else with some of the KKEN KKEN we move forward with reducing O decisions that have been made. ALA BA BA TEXA S. S. S. the amount of capital available 0 S. But I’m a Canadian, first and U. U. U. MEXIC to the industry worldwide. U. foremost, and I don’t want to be So you see this is pretty temporary. debating the Buffalo Declaration Well, I hope it’s temporary. when we could be dealing I was in Texas some months ago, Armando Senra, the head of 7. Environmental, with how we pull this country learning about shale plays. The BlackRock’s iShares America social and together, sort out some of the governance U.S. industry has pulled money out funds, said that oil sands are investing takes long-term systemic issues, and of the oil sands to exploit shale “destructive” and “the worst into account figure out how to be a force for deposits in the Permian Basin offenders” from a climate a company’s good in the future. and elsewhere. What impact perspective. How much of a environmental If you could pick any industry policies, has that had? threat is that to the industry? approach to to be in right now, would you pick The people who have left Alberta First, let’s go back and look at diversity and the oil industry? are more the big European our U.S. competitors in the shale governance, I love the industry, and it’s on players. You’ve seen some capital basins. Their greenhouse gas and more. the leading edge of the climate move from our conventional intensities tend to be higher, on 8. The Buffalo change debate. I can’t think producers to those shale plays average, than what we’re doing Declaration, of a better place to be, where in the U.S. From my experience, in the oil sands. (6) So, I would which is picking I can hopefully be part of the investors are quite skeptical take umbrage with the statement up signatures, solution and be impactful. promotes TITUTE about the sustainability of those that we are the worst. We are not. the idea of a So, categorically, yes. INS business plans in the U.S. When we talk to fund managers, referendum There’s also a divestment especially inside of what we call on Alberta separation. Trevor Cole is the award-winning author PEMBINA movement at work, trying to the ESG (7) space, these fund of five books, including The Whisky CE convince fund managers to managers are making decisions King, a non-fiction account of Canada’s UR take money out of the oil sands.

SO on what industries, and who most infamous mobster bootlegger.

APRIL 2020 / REPORT ON BUSINESS 25 CALL FOR ENTRIES

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Enter your business for free at tgam.ca/TopGrowingEntry WOMEN LEAD HERE 2020

WITH THIS SURVEY, REPORT ON METHODOLOGY BUSINESS INTENDS TO SET To create the inaugural Women Lead Here list, Report on Business magazine evalu- A BENCHMARK FOR GENDER ated the 500 largest publicly traded com- DIVERSITY IN CORPORATE panies in Canada, as determined by our CANADA. AFTER EVALUATING annual Top 1000 list. Assessments were HUNDREDS OF COMPANIES, WE done during November and December of 2019, and represent the state of each IDENTIFIED 73 AT THE FOREFRONT company during that time. Our research- OF WOMEN IN LEADERSHIP ers evaluated each company’s top three POSITIONS. ON AVERAGE, 44% tiers of executive leadership (Tier 1: CEO or equivalent; Tier 2: C-suite, president OF THE EXECUTIVE ROLES FOR or equivalent; Tier 3: generally EVP, SVP COMPANIES ON THE LIST ARE or equivalent), measuring the ratio of HELD BY WOMEN. IT’S NOT female-identifying to male-identifying PARITY—BUT IT’S NOT FAR OFF. individuals at each tier. We contacted each evaluated company by email to confirm THIS IS WHAT “GOOD” LOOKS the accuracy of data. We then applied a LIKE TODAY. CONSIDER IT A weighted methodology. We also took into STARTING POINT TO TRACK account the company’s profitability, rev- enue growth and three-year return using PROGRESS IN THE FUTURE. 2019 financial data. The diversity of an executive team was also considered. We then assigned each company a score and applied a final screen to the top quintile: Companies with fewer than 30% of over- all executive roles held by women were excluded, as were companies with only one woman-identifying executive.

RESEARCHERS DEBORAH AARTS, LIZA AGRBA, STEFANIE MAROTTA AND ALLEN TONG

APRIL 2020 / REPORT ON BUSINESS 27 28 APRIL 2020 / REPORT ON BUSINESS LUCARA DIAMOND EIRA THOMAS HAS PROVEN SHE HAS A GENIUS FOR FINDING LUCRATIVE DEPOSITS—FIRST IN THE NORTHWEST TERRITORIES, WHERE THE DIAVIK MINE NOW PRODUCES MILLIONS OF CARATS A YEAR, AND THEN IN BOTSWANA. BUT THE GEOLOGIST IS ALSO DETERMINED TO DISRUPT HOW GEMS ARE TRACKED AND SOLD, AND PUT A NEW FACE ON A MALE-DOMINATED BUSINESS

BY ALANNA MITCHELL PHOTOGRAPH BY STEPH MARTYNIUK

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APRIL 2020 / REPORT ON BUSINESS 29 Eira Thomas is on the run. In short, Thomas has a genius for disruption. Not just for the sake of it but, as The annual results for her company, Lucara’s co-founder Catherine McLeod-Seltzer puts it, because Thomas views Vancouver-based Lucara Diamond Corp., the world through a wider lens. “If you can use technology and your people to are coming out in 11 days, and as its co- create more value,” says McLeod-Seltzer, “why wouldn’t you do it?” founder and chief executive, she is prep- ping for a round of board meetings and earnings presentations, including dashes THOMAS AND MCLEOD-SELTZER USED THE to both Florida and Toronto for mining SPECIAL DIVIDEND LUCARA ISSUED AFTER conferences. Before that, she’s heading from her home in England to Morocco THE KAROWE FIND TO BUY FIVE-CARAT on a half-term school break with her GEMS FROM THE MINE; THOMAS TOOK two daughters. Plus, she’s experiencing HERS TO CANADIAN JEWELLER ANDREW such wretched technical glitches that she missed a Skype interview yesterday and COSTON, WHO DESIGNED THIS RING. had to rebook. Today, she apologetically comes on 24 minutes late, something so uncharacteristic that her personal assis- homas’s knack for bringing a distinctive view to the job started tant, who is in Zurich, has begun to worry. three decades ago, when she was only 21. Life is a little frenetic, Thomas confesses. She was on a post-undergrad travel jaunt, looking at doing a Yet, when I ask her why diamonds hold PhD in geology at the University of Cape Town with the god- such an allure, all of a sudden, the busy father of diamond exploration, the late John Gurney. Her father, executive life seems to vanish. She savours Grenville Thomas, an inductee to the Canadian Mining Hall of her answer—and when it comes, it’s unex- Fame, summoned her back home. pected. Ye s, there’s the thrill of the hunt. A diamond-staking rush was on in the Northwest Territories. But she is a geologist, and so within the Her dad had acquired a long shot under deep water and wanted diamond she also reads the violent secrets T her geology skills to figure out whether anything was there. “I of the inner Earth that created it billions thought he was a bit crazy,” she says. “Diamonds had never been of years ago, when the planet was much discovered in Canada in an economic concentration.” younger. She sees the torrid pressures Fast-forward a couple of years. The staking rush has moved south. Thomas’s under the planet’s crust that long ago exploration budget is down to its final pennies. The project is days away from bound carbon atom to carbon atom and being shelved. But she is still sampling the remnants of old volcanic eruptions, the convulsions that later flung them called kimberlites, under that lake, reading the chemistry that tells her they upward in a volcanic rush of magma, car- must contain diamonds, determined not to give up. rying them near enough to the surface for Then, at the last possible moment, she finds something that looks like it could a tenacious miner to find. Thomas sees, in be a rough diamond. Her first reaction is skepticism. Diamonds big enough to effect, time and story and mystery. be visible rarely show up in early excavations, even in the richest ores. “The fact that we even get a chance to Her second reaction is to pull out a little diamond detector she’d picked up experience a diamond because it’s been at a jewellery shop down south. She says her buddies at De Beers, the company unearthed in these ancient volcanoes is that ruled the diamond world for much of the past century, would have laughed pretty unusual in itself,” she says. “The at such a gadget. But she plugs in the device and watches it glow green. Eureka. world we know and understand is all these What she is holding really is a diamond, the first from what would become Dia- geological processes that have formed us. vik, one of the world’s richest diamond mines. It produces six to seven million Yes, it’s science, but it’s also history.” carats a year and put Canada on the map as a major diamond source. Thomas has surprising takes on other So not just a viable mine, but—far less common—a viable diamond mine. facets of the industry. For one thing, she’s Found in a region not known for diamonds by a newbie geologist interpret- not interested in diamond mining unless ing the numbers the way no one else was. “There’s a bit of relief, a little bit it brings widespread benefits to society. of vindication, and then just pure thrill, because you realize that the science That’s a sharp knock to the reality of ear- worked,” Thomas says. lier eras, when the stones leeched wealth Had she been a more traditional miner, she might have given up. And, hav- from local communities, sometimes to ing bagged such a rare and lucrative find, she might have rested on her laurels. support bloody wars and corruption. “My father said, ‘You should just retire now, because you’re never going to But she’s also revolutionizing the pro- achieve this ever again,’”she deadpans. cessing of raw ore and reimagining how rough diamonds are tracked and sold. Not only that, but Thomas is redrawing You could draw a straight line between Diavik and what’s going on now at the face of the famously macho industry Karowe in Botswana. There were, however, a few detours in between. Storno- itself: To wit, the vast majority of her com- way Diamond, which Thomas set up with McLeod-Seltzer, sought diamonds pany’s senior leadership team is female. in the Arctic and helped develop Quebec’s first diamond mine, in Renard. That includes the managing director of (Stornoway fell on hard times last year, long after Thomas had exited; it sought Lucara’s pride and joy, the Karowe mine bankruptcy protection and was eventually picked up by Osisko Gold Royalties in Botswana. and creditors.)

30 APRIL 2020 / REPORT ON BUSINESS FROM OUR ADVISORY BOARD

And then there was a heady stint in Yukon gold with Kaminak Gold Corp. Commitment to gender Thomas took the helm in 2013, in the teeth of a bear market for the precious diversity can only be truly metal. Three years later, Goldcorp Inc. took it over for $520 million, making impactful if it starts at the top Thomas the toast of the investment community. with the CEO. As the individual But she had a yearning for African diamonds. She’d tried to take Stornoway ultimately responsible for into Africa during her tenure as CEO, but shareholders had balked mightily. what the company achieves, So, in parallel with her other ventures, she’d set up Lucara with Lukas Lundin the CEO shapes the culture. (the Swedish-Canadian mining phenomenon) and McLeod-Seltzer to search An authentic demonstration for African kimberlites. The company has been trading under that name—a of his or her commitment combination of Lukas, Catherine and Eira—since 2007. She became its CEO will cascade through the organization and inspire two years ago, after the Kaminak deal. employees, customers and Lucara particularly wanted to focus on Botswana. Not only is it the world’s suppliers. top diamond-producing region, along with Russia, but it has had a stable democracy whose leaders are determined to use diamond profits for the com- Lynn Beauregard mon good. One of the world’s poorest nations when it declared independence President, Governance from the United Kingdom in 1966, Botswana has used those diamond profits to Professionals of Canada, become an upper-middle-income country. To a mining company, that spells an and Ekta Mendhi Co-Chair, enthusiastic, educated local workforce, plus good roads. Canadian Gender and Good “I call it the Switzerland of Africa,” Thomas says. Governance Alliance Lucara’s big break arrived in 2010, when its management team came across the site that became Karowe. Then owned by De Beers, it features three inter- secting lobes of kimberlites, with the potential for lots of diamonds. But De Beers’s long experience in southern Africa told it the site’s kimberlite pipes were too tiny to yield enough diamonds for them. So it said yes when Lucara wanted to buy the whole thing. It turns out that tiny pipes can end up being 10 times as rich, per tonne, as bigger ones. And once the Lucara team started looking closely, they thought they saw something De Beers may have missed: fragments of not just big dia- monds, but of vanishingly rare gigantic ones. ize is a constant, easily mea- The problem with such huge diamonds—a wonderful problem to have, sured. But what of price? In Thomas quips—is that you need them unbroken. But the traditional recovery diamonds, as in great works system involves serial crushing and milling, a process unkind to big stones. of art, it comes down to It was a gamble and an industry first, but Lucara invested in X-ray transmis- desire. You wouldn’t look at sion (XRT) technology. Long used in recycling and food processes, XRT can a painting by Leonardo da also pick out unbroken diamonds of any size from lightly crushed ore by read- Vinci and expect to pay by ing the signature of their atomic density, even if they’re wet or encased in other the square inch. Instead, you material. “It’s really paid off for us,” McLeod-Seltzer says. would assess its beauty, rar- Karowe has produced a stream of diamonds so large that several of them S ity, provenance, cachet, emo- have their own names. They include last year’s find of the world’s second tional resonance. All these heaviest rock: the mighty black-coated Sewelô, weighing in at 1,758 carats. also come into play in the (The only bigger rough diamond ever discovered was the fabled Cullinan, in ineffable cost of a diamond, whether it’s a 1905—its two largest polished gems now grace the sceptre and crown of Queen rough stone waiting to be cut and polished Elizabeth II.) or the rock flashing in an engagement ring. Other Lucara prizes include the Lesedi La Rona at 1,109 carats, the Constel- And in Thomas’s view, diamonds are not lation at 813 carats and the most recent, an unnamed, ice-white 549-carat stone fetching as much money as they should. discovered in February. That is partly the fallout from reports Lucara has plans to find even more. Last year it finished a feasibility study beginning a couple of decades ago that that concluded digging underground in addition to the current open-pit oper- the trade in rough diamonds from conflict ation would double the mine’s life to 2040 and potentially add billions in rev- zones supported wars. A United Nations enues. To build underground, the company is embarking on an engineering resolution improved the situation, lead- and design phase. That takes capital, so in November, it suspended dividends ing to the Kimberley Process Certifica- in order to redirect the money, as well as other cash flow. (It will also have to tion Scheme, which took effect in 2003 take on debt.) and started to keep most of the so-called The markets are waiting to see how that will play out. The uncertainty, plus “blood diamonds” out of the markets. But an overall weak market for diamond equities, has pushed Lucara’s share price the residue of uncertainty remains. down to around $0.65 as of early March, down from a 52-week high of $1.76. So while demand for luxury products of Geordie Mark, an analyst at Haywood Securities in Vancouver (which owns other sorts has risen, particularly among Lucara stock), says he thinks the share price is discounted right now. “Given millennials and in China, desire for dia- what we’ve seen come out of the diamond deposits so far,” he says, “it’s quite monds has limped along. Last year, for unique in terms of its capacity to deliver unique, large-scale, large-quality dia- example, the market took a hit in the wake monds of value.” of the trade conflict between the United

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In sales, we talk a lot about the work in the industry) with a gasp-inducing idea: establishing a digital sales pipeline—those future deals platform, now called Clara Diamond Solutions, that would allow buyers to and opportunities that help us purchase exactly what they want, stone by stone, rather than in batches. forecast our numbers, deliver Clara’s system cuts out the middleman and some of the secondary market, new initiatives and products to securing better prices for producers and higher margins for manufacturers, our customers, and grow the says Thomas. As well, the platform permanently tracks the stones’ path of business. But the notion of a ownership through blockchain, adding to the transparency around a dia- pipeline has applications that mond’s origins. “For the first time ever, we’re saying to our buyers, ‘Tell us extend far beyond sales. what you want and we’ll find you the perfect rough stone you can polish into Building a talent pipeline your perfect polished diamond for your business,’”Thomas says. to achieve more executive Lucara wholly owns Clara and says the platform may end up being as profit- diversity should be no able over time as digging up diamonds. Lucara’s plan has been to start selling different. Organizations need to formalize programs that its own rocks and then invite in other suppliers. As of February, it was still a nurture and support diverse relatively small player, with a customer base of 32 and a total of 19 sales since talent. At Cisco, we’ve done December 2018, worth roughly $11 million. (By contrast, revenue from tenders this through a number of of Karowe diamonds in the fourth quarter of 2019 alone were $56 million.) programs, including Women But what of those freaks of nature, the massive rough stones? The risks in of Cisco—a program that determining what they’re worth are greater, for both miner and manufacturer. attracts, develops, retains and How many polished diamonds will emerge? How special will they be? celebrates women. By weaving Lucara is beginning to tackle that in an innovative way, too. Rather than auc- these programs into the fabric tioning off or tendering the rare black-coated Sewelô diamond and forgoing of our culture, we help achieve future profits from whatever exceptional gems emerge from it, the company diversity of thought today, sold a 25% stake in the stone to Louis Vuitton and another 25% to HB Co., while building toward a more which will cleave and polish it into gems. Lucara will keep a 50% interest in inclusive future for tomorrow. the polished stones that result. As well, 5% of all retail sales from the Sewelô Rola Dagher collection will go back into community-building projects in Botswana. “We President & CEO, Cisco Canada, are trying to modernize this whole industry,” Thomas says. “One of my biggest and President, Women of criticisms over the past 20 years is that we have been too insular. It’s opaque.” Cisco Americas And self-consciously male-dominated. In Canada, just 15% of those employed in mining and quarrying in 2018 were women, according to the 2020 Canadian mining labour outlook from the Mining Industry Human Resources Council. Many of those women are in administrative positions and few in technical ones. The only Canadian sector with fewer women is construction. McLeod-Seltzer’s experience is illustrative. In 2005, after years in the bro- kerage industry and as CEO of a junior gold miner, she was recruited (kicking and screaming, she says) to her first big board: Kinross Gold. “I was not only the only woman—talk about diversity!—I was one of only a few people not named John,” she says. Now, she is Kinross’s independent chair (and co-chair of Bear Creek Mining Corp.). “I do think things are changing—maybe not at the pace people want to see, but they are changing,” McLeod-Seltzer says. States and China, Thomas notes. This year, Again, Lucara has done things differently. Three of its seven board members there’s the coronavirus outbreak. At the are women. The majority of its senior leadership team is female. It wasn’t an same time, supply has risen as polishers explicit goal, Thomas says. Her goal was to hire talent. But she did want to cre- reduce their stockpiles. The combination ate an environment that was welcoming to women: collaborative, respectful, has had an unpleasant effect on prices. passionate, fun. Selling practices within the hide-bound “I think there are lots of high-potential women who turn down jobs because, industry haven’t helped. The established quite frankly, they just don’t want to work in jerk environments,” she says. way to get rough diamonds to the people Thomas points to Naseem Lahri, managing director of Lucara Botswana, who will transform them into shiny jew- the first woman to oversee a diamond mine in the country. Lahri had been the els is to hold a tender, which happens company’s CFO in Botswana for five years, but no one asked what else she several times a year, depending on the wanted in her career. Until Thomas. “We realized, this woman’s a dynamo— producer. Stakeholders in the tender must she should be our managing director!” she says. “A nd that could have happened buy a whole batch of diamonds, whether earlier. We had a vacancy in that role in Botswana for a number of years.” they want them all or not. And they usu- As our interview winds down, again the unexpected. Thomas becomes

ally don’t, so a secondary market emerges reflective. Now in her early 50s, she’s matured, she says. Of course she’s eager SAKKAB for unloading the surplus. A diamond can to keep the flow of profits going at Karowe. But there’s more to it now. change hands as many as 10 times from “You do start to get a little more philosophical. What’s it all about? What’s ANNIE mine to ring finger, destabilizing prices the most important piece?” she says. “What started out as a treasure hunt is and siphoning off profits. now much more about how we make a lasting contribution to the communities Enter two millennials (both of whom we are working with. And that becomes a much bigger priority.” PHOTOGRAPH

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PHOTOGRAPH TRANSALTA WHEN THE GOVERNMENT ORDERED TRANSALTA TO SHUTTER ITS COAL PLANTS, IT SEEMED LIKE AN UNIMAGINABLE TASK. HOW DAWN FARRELL’S TRUST IN HER TEAM HAS MADE IT POSSIBLE

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LEFT TO RIGHT: JOHN KOUSINIORIS, KERRY O’REILLY WILKS, ARON WILLIS AND JANE FEDORETZ, CHIEF TALENT AND TRANSFORMATION OFFICER

APRIL 2020 / REPORT ON BUSINESS 35 Back in 2015, Alberta’s recently elected New Democratic government announced its climate plan. As part of the ambitious agenda, the NDP ordered power utility companies to phase out coal- fired electricity by 2030 and transition to a greener grid. The edict hit the century-old TransAlta Corp. with a thud. Nearly half of the province’s electrical generation capacity came from nine coal- fired generating units operated by the firm. Share values dropped, and CEO Dawn Farrell huddled with her management team to find a solution. The new rules caught them “like deer in the headlights,” Farrell says in an interview at TransAlta’s Calgary headquarters. “We had to pull the company out of the ditch because we were flattened by that policy framework.” At the time, Farrell couldn’t imagine— DAWN FARRELL BECAME CEO OF TRANSALTA not “in a million years”—a shutdown of the IN 2012, BUT FIRST JOINED THE COMPANY MORE THAN THREE DECADES AGO coal plants. Yet her team is now making it happen. “If you’ve got a group of people that are willing to put themselves out there coal” payments from the Alberta government to ease the transition. “I would on the line, talk straight with one another, not wish this on any company in Canada, which is why I’m passionate about and if you use the collective strengths of Canadians being smart about how they bring together the environment and everybody’s brains, I think you can get economy,” she says, reflecting now on the coal surprise. there,” Farrell says. “You can get to places As they continue to work toward sustainability in many forms, the CEO also nobody thought they could get to.” strives to ensure that collective contains more voices—and more women. TransAlta is among the largest publicly traded independent power producers and renewable power generation companies algary-born Farrell is the daughter of a beekeeper. The first in in Canada. her family to attend university, she holds a bachelor of com- “Where we’re taking the company now merce degree and master’s in economics from the University is really to provide low-cost electricity that of Calgary and attended the advanced management program also has a really low environmental foot- at Harvard University. print,” says Farrell, who speaks authori- She started with TransAlta after graduation in 1985, when tatively about a sector in which she has she oversaw the company’s economic models for Alberta. been active for 35 years. Their plan calls Farrell left for a position at BC Hydro in 2003 but returned to for investments in technologies and assets TransAlta as executive vice-president of commercial opera- that will lower its greenhouse gas foot- C tions and development in 2007. She became the firm’s first print. This could include techniques such female CEO in 2012. as blending hydrogen into TransAlta’s A mother of two, grandmother of four and wife of 38 years natural gas stream or projects like a pump (her husband is a carpenter), the 60-year-old is described by storage initiative to hold wind-derived others as passionate, smart, analytical, straightforward, fair and supportive. DOLAN electricity in a hydro reservoir for later Not long after returning, she called her colleague Aron Willis in Australia,

use. This year TransAlta will construct where he was managing director of a business she had set up years prior. NATALIA Alberta’s first utility-scale lithium-ion She wanted to know what was happening there. “That conversation was the

battery storage facility at its Summerview starting point that led to the development of a strategy, getting some support RIGHT) Wind Farm. These innovations—along from the board and then eventually an investment during my last four years with shifting up to seven of its coal gen- in Australia of almost a billion dollars in three different projects,” says Willis, eration units to natural gas—appears to now senior vice-president of growth for TransAlta. Farrell has high expecta- (BOTTOM be paying off. In 2019, TransAlta reported tions but gives her teams space to deliver on their goals, he says. “You get revenue of $2.3 billion, up 4.4% from 2018, really clear feedback from her on what she’s thinking, whether she agrees or KOROL;

and net earnings of $52 million, follow- disagrees with how you’re approaching it, and then at the same time, she lets TODD ing two straight years of net losses. Share you go and run the business,” Willis says, adding,“She’s not there looking over prices have recovered modestly. The bat- your shoulder at every turn.” (LEFT) tle plan has been bolstered by last year’s Farrell began working on the company’s greenhouse gas file in 1989. By the $750-million investment from Brookfield early 1990s, it had acquired its first wind farm and in 2013 launched majority- Renewable Partners LP and ongoing “off owned subsidiary TransAlta Renewables Inc. When the Alberta government PHOTOGRAPH

36 APRIL 2020 / REPORT ON BUSINESS FROM OUR ADVISORY BOARD

announced its climate change plan, that side of the business was forced to While all organizations aspire to exponentially speed up. In addition to giving the electricity producer roughly progress to gender parity, we’ve 15 years to wind down its coal operations, the policy included a carbon tax observed through our work that on greenhouse gas emissions and required 30% of the province’s electricity to many companies don’t have come from renewable sources. “It actually created the impetus for the company clear data on the diversity of to accelerate its push to being clean,” says John Kousinioris, TransAlta’s chief their workforce. This makes operating officer. He says elements of the plan range from implementing the it difficult to identify the coal-to-gas strategy to building out a renewables business in the United States. gaps—or the strategies to close TransAlta Renewables now has 44 renewable energy generation facilities, them. Organizations need to such as hydro, wind, gas and solar assets, in Canada, the U.S. and Australia. The do a serious assessment of the hidden barriers that are company is also focused on developing on-site cogeneration plants, which hindering women’s progress to allow companies ranging from industrial sites to food-processing plants to oil senior leadership and declare a sands operations to have their own mini power plants. commitment by setting targets There’s also the battery storage facility at the Summerview Wind Farm, that will allow them to build a which will have a capacity of 10 megawatts and a total storage of 20 megawatt robust and sustainable pipeline hours. It’s small by commercial standards but a significant step in the sector. of female talent. Electricity is notoriously difficult to store: Facilities powered by wind need to tap into established power grids when there is no wind to spin the turbines, Caroline Codsi while those that generate power from solar panels need another energy source Founder & Chief Equality Officer, when darkness sets in. The Summerview project will be Alberta’s first battery Women in Governance storage facility built at a scale that makes it useful to a utility. Farrell says one lesson from her company’s transition is that the creation of a green economy will take time. And it’s better to let companies adjust gradually to new rules. “You don’t need to slam people into the wall,” she says. “It’s better to create the policy framework and let us transition.” Creating a low-carbon economy will require access to capital markets for the companies making such significant shifts, she adds. “That was a tough thing for us, but I think we can be instrumental in shaping future policies.” Analysts are mixed on TransAlta overall. RBC Capital Markets recently raised its rating to outperform. In a February note, the bank cited a growth in investor interest as TransAlta converts coal generation to natural gas. Companies must adopt a “We do think there is potential upside value in TransAlta,” says Mark Jarvi, bold mindset—and commit equity research analyst for CIBC, which has it at a neutral rating. “Of the things to doing whatever it takes to they can control, I think they’re making good decisions. On the renewables not only increase the diversity side, I would say it’s going to be slow and steady.” of leadership teams, but also to build organizations that all people can contribute to and he transition to renewable energy could be viewed favourably thrive in. To me, this starts with treating diversity and by the markets. Setting environmental, social and governance inclusion as a top strategic (ESG) standards has been increasingly important as many business priority. It means investors view them not just as an ethical business practice but funding, resourcing and also a driver of value. executing a highly intentional A growing number of investors look for companies that are and intersectional multi-year sustainable on multiple levels, meaning that companies with plan that focuses not only on strong ESGs are increasingly attractive for investment money. recruiting and development, And TransAlta has been compiling its own ESG standards but engagement and novel since the early 1990s. retention strategies. Then T measuring its impact, as with BlackRock, the world’s biggest asset manager, showed the investment world just how significant ESG targets have any other business initiative. become. In a 2018 statement, BlackRock said it is committed Jodi Kovitz to integrating the standards into its investment processes for all of its assets Founder and CEO, Move The Dial under management and advisory. Gender diversity is a component of ESG, alongside environmental consider- ations. For its part, TransAlta’s board of directors has an impressive roster of women holding four out of 12 seats. Five of the company’s 13 corporate officers and senior managers are women. The company has deemed gender balance so important that it plans to raise the number of women on its board to 50% by 2030. By that point, it also aims to have women account for 40% of its entire workforce, up from 20% today. Last year, TransAlta became a signatory of the Electricity Human Resource Canada’s Leadership Accord on Gender Diver- sity, and in early 2020 it was added to the Bloomberg Gender Equality Index.

APRIL 2020 / REPORT ON BUSINESS 37 FROM OUR ADVISORY BOARD

When recruiting, leaders better. I think the respect that emerges out of the group creates a better condi- should ensure that for every tion for decision-making,” Farrell says. “It’s more what I’ve experienced than senior role, the shortlist of what I can prove. Some scientist can go away and prove it. I’ve just experi- candidates must be gender enced it.” diverse. This just makes Kousinioris was hired by Farrell in 2012 and has seen her evolve as a leader sense—why would you limit who focuses on the collective and empowering individuals to make decisions your talent pool? It also sends within their roles. She’s also capable of giving teams space to work together the message that you are when required, he says. “We probably do better collectively than if we were a giving real consideration to homogeneous group of individuals that had a singular view.” different types of leadership. For Kerry O’Reilly Wilks, TransAlta’s chief officer of legal, regulatory and As diversity increases, more external affairs, it was Farrell’s reputation as a leader that spurred her to move people can see a pathway from Toronto to join the company in Calgary. “A lthough I love TransAlta and to the top for someone just like them. When they see everything it has to offer, the reason I moved my family across the country was themselves represented in to work for Dawn Farrell, because she’s one of the most amazing—legendary, leadership, it lets them know, in my view—female leaders,” she says. “That’s an option for me—I O’Reilly Wilks praises the CEO’s ability to nurture up-and-coming female can do that.” At the OSC, I executives. “In terms of the investment she makes to grow women, everything believe that greater gender with Dawn is about how she can help raise you up to the next level, help you diversity has helped us in think in a different way, that you’ll almost become so much better without even our consideration of risk. It trying or without even knowing.” has enriched our discussions Some women struggle with how best to present themselves as leaders, beyond policy and financial sometimes adopting stereotypically male behaviours as a result. “That is just issues to encompass a the antithesis of Dawn. One of the first things you’ll hear is about her grand- broader range of risks. kids and about how extremely active she is in their lives,” O’Reilly Wilks says. Maureen Jensen “When it comes to female empowerment or encouragement at all levels, she Chair, Ontario Securities will be right there.” Commission During O’Reilly Wilks’s first year at TransAlta, Farrell’s quick response to a situation provided her with a valuable lesson. O’Reilly Wilks had invited groups of service providers into the office to discuss gender diversity. One of the firms arrived with a delegation solely comprised of men. Given the topic, O’Reilly Wilks had hoped the company would send at least one woman. She kept the meeting and didn’t mention the elephant in the room. Then, she told her boss about the experience. Farrell said her response would have been: “This meeting is over. You can come back and try again,” O’Reilly Wilks recalls. “It went a long way for me to go, ‘That’s right, I should have done that. If I’m just silent and passive, things don’t change.” TransAlta’s ambitious goal to have 40% of its workforce comprised of women in 10 years will be no small feat. Given the nature of the power industry, it will require changes in many occupations that are male-dominated, such as “Where men and women really lead electricians and welders, which women tend to steer clear of. “Where you’re together, you create strong families. You going to have a little bit of trouble is when you try to achieve 40% at the front create strong communities. You create lines—at our processing plants, our hydro facilities, in our thermal facilities,” strong businesses, strong governments. O’Reilly Wilks says. “So that means we need to integrate ourselves with edu- It’s not one or the other—it’s both,” Farrell cational institutions that teach the trades, that we become involved with how says. “Kind of like environment and econ- they’re recruiting and attracting young women into their programs, because omy. It’s not one or the other—it’s both.” that’s the base we need to hire from.” Farrell feels like it’s important to have For now, TransAlta is ahead of schedule on its coal reduction strategy and on women and men lead side by side, rather track to eliminate coal from its electrical resources by 2025—five years early. than have one dominant gender. “I think The company’s electricity production from Canadian coal was cut nearly in we have all the requisite skills to bring half in 2019 compared with 2015 levels, while generation from wind, solar and out the best in one another and find the hydro have inched higher.

way forward... My vision is, ‘They lead Its annual greenhouse gas emissions have been halved from 2005 levels to 21 MAIL

here,’ and it’s the combination of the two, million tonnes, and the company aims to slash them again to 10 million tonnes AND because I think that’s where our strength by the end of 2025, Farrell says. “We’re just thinking about the investment strat- is, and you see that in so many walks of egy that could get us to net zero by 2050.” life,” she says. Farrell says she will often ask what her team knows and what it doesn’t know, LUM/GLOBE A balanced mix can be beneficial, given what individuals on her team see and do not see. “The job of leadership is to men and women are often socialized to show people how they’re leading and just kind of add energy when people get FRED communicate, collaborate and make deci- tired,” she says, adding, “I never get tired.” sions in different ways. “I think the listen- Then she offers a caveat: “Sometimes I do, but I don’t tell anybody. To me, ing is better. I think the conversations are it’s, How do I add energy to the system so that everybody brings their best?” PHOTOGRAPH

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PHOTOGRAPH SIENNA SENIOR LIVING LOIS CORMACK WENT FROM A FRONTLINE WORKER TO CEO. HER COMPANY’S FUTURE RESTS ON MAKING SURE OTHER WOMEN GET THE SAME OPPORTUNITY

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APRIL 2020 / REPORT ON BUSINESS 41 Lois Cormack, then 15 years old, ped- alled her bicycle down a dirt road from her family’s farm near Cannington, Ont., to begin her first job at a local retirement home. She didn’t realize it at the time, but that day would launch a lifelong career in senior care. Over those initial few weeks work- ing with seniors, she observed that the owner—a woman in her 70s—called the shots not only for the team of nurses, chefs and program co-ordinators, but for the business as well. She tackled problems for staff and seniors while also considering the needs of a capital-intensive, resource- squeezed enterprise. She wielded the power to make big, impactful changes. Cormack admired her for it. CORMACK JOKES WITH STAFF AND “I thought, That’s what I want to do—I CLIENTS AT SIENNA’S KENSINGTON PLACE RETIREMENT RESIDENCE IN TORONTO want to be her,” Cormack says. “I realized very early on that you have to have a posi- tion of influence to make really significant sued a part-time business degree and then launched a consulting firm focused change—you can’t really do it at the front on senior care that did work for the Ontario Ministry of Health. From there, line. You might make a difference in the Specialty Care, a private, family-owned senior living management business, lives of residents and team members, but recruited her into its ranks. you won’t have a significant impact on the In 2013, Leisureworld Senior Care Corp., as Sienna was formerly known, business. So that’s what I set my sights on.” acquired Specialty Care, where she was then president. Leisureworld began More than four decades later, the as an operator of LTC homes. After going public in 2010, it began diversifying 58-year-old president and CEO of Sienna into retirement residences, where pricing is more flexible compared with the Senior Living Inc. is the head of an orga- world of government-regulated long-term care. The $254-million acquisition nization with more female leaders than of Specialty Care added 10 new properties to its portfolio, increasing its retire- almost any other publicly traded company ment suites by 44%. Cormack became CEO of the expanded firm. in Canada. Across the enterprise, women She inherited a company that was a collection of sub-brands, the result of compose 83% of its senior executive team recent acquisitions. After a six-month tour, visiting properties and hosting and 79% of executive directors in charge town halls with staff and seniors, she decided big changes were required. of its retirement residences and long-term “I realized there wasn’t a common vision, mission or values across the com- care (LTC) homes. At the Markham, Ont., pany,” she says. “The company had just entered into retirement housing, which firm, gender diversity is reflected across was considered high-end luxury, but we also had long-term care that had a the enterprise, from the C-suite to the compliance-oriented culture. There was also the home-care business that managers of its local residences. thought it was completely distinct and didn’t see itself as part of the company.” Women have led the company through a To streamline the company’s disparate operations under one brand, Lei- period of rapid growth driven by a grow- sureworld became Sienna. Individual facilities, which previously bore the Lei- ing retirement population. Cormack, who sureworld name plus the city it was located in, were rebranded with locally joined as CEO in 2013, has steered Sienna inspired monikers that reflect the surrounding community (for example, through an enterprise-wide rebranding Kawartha Lakes in Bobcaygeon, Ont.; and Kensington Place in Toronto). as well as a cavalcade of acquisitions. She Cormack also overhauled the corporate culture’s top-down approach to expanded the company from 30 properties give greater authority to the people who spend their days interacting with to 83 long-term care and retirement resi- residents. One of the earliest changes involved transferring responsibility for dences in British Columbia and Ontario, program scheduling from head office to the executive directors at local facili- making it the largest owner and operator ties. Through this approach, company processes became more efficient for of LTC facilities in the latter province. personal-care workers, nurses and administrators over an 18-month period. A central tenet of her strategy has been Having experience in one of those on-the-ground positions started to carry drawing on the expertise of her front- greater weight when the company was recruiting for leadership positions. line staff—and then empowering them to “We tried to grow from within,” Cormack says. “We would rather take a per- become management. After all, Cormack sonal support worker and help her become a nurse or a director of care.” started on the front lines herself. Of Sienna’s 12,000 employees, 8,000 are front-line workers. They care for Cormack spent years as a personal care seniors, tend to complex medical needs, build meal plans and schedule activi- worker and nurse before finally climbing ties for residents. But if workers don’t have a business education, climbing into the leadership role she aspired to as from the front line to the C-suite is a difficult journey—one that Cormack a teenager. Eager to be part of her indus- understands well. With that in mind, she set about recalibrating how Sienna try’s business operations, Cormack pur- approached recruitment and development.

42 APRIL 2020 / REPORT ON BUSINESS Changing the company’s culture required someone who understood the for seniors’ housing operators and lower complicated, demanding world of senior care. So she brought on Joanne Dyke- occupancy rates,” says Brendon Abrams, man, a registered nurse with executive experience, to oversee the LTC homes an analyst at Canaccord Genuity Corp. and residences scattered across Ontario and B.C. The pair began implement- “However, given the anticipated demand ing education programs to teach business skills to frontline staff. from Canada’s growing senior population, For example, Dykeman points to a certificate her team developed with York we expect the new supply to be absorbed University. Sponsored by Sienna, nurses attend the year-long Director of by the market over the next few years.” Care Certificate in Clinical Leadership program to learn how to run parts of a Cultivating internal talent will become senior-care facility. At the executive level, local residence managers can move increasingly important as the company into senior leadership roles while completing business degrees part time. “I’m confronts these long-term trends, accord- very comfortable bringing people in if the fit is right and then helping them ing to Cormack. Retirement residence complement their experience with formal academic preparations,” Dykeman demand will outpace supply by 2023 in says. “It’s not just about getting an MBA. If you have the experience and are a Sienna’s key markets. Between an aging good fit, we’ll work with you.” population, a shortage of health care Sienna’s focus on supporting its employees has caused the number of inter- workers and competitors eager to poach nal promotions to increase each year. Today, internal promotions make up 55% employees, Sienna remains focused on of leadership roles, up from 33% in 2015. And women hold 77% of leadership finding new ways to train its people. positions. Women on the front line of senior care Competition for talent will only intensify in the senior-care industry. Com- will have greater opportunities to grow panies like Chartwell Seniors Housing Real Estate Investment Trust and and develop—but only if executives sup- Extendicare are ramping up construction to capture a share of a growing mar- port them, Cormack says. “It’s about really ket. This increased pressure has meant a drop in occupancy rates in some of helping them get there and leaders look- Sienna’s retirement residences, even as it undertakes a slew of renovations to ing out for them, even if it’s in going back add beds at many of its properties. to get a degree,” she says. “You can do this. Despite these pressures facing Sienna, analysts remain upbeat about its Our CEO was a personal support worker, prospects. “There has recently been an increase in seniors’ housing develop- so if that’s what you want to do, you can do ment in certain markets, which has led to temporarily elevated competition it. There’s a path to get there.”

At Linamar Corporation, our unique culture drives a strong commitment to embrace diversity at all levels of our organization. We are a truly global advanced manufacturing company that powers vehicles, work and lives. Learn more at www.linamar.com 44 APRIL 20 20 / REPOR T ON BUSINE SS

PHOTOGRAPH FORTIS

WITH INVESTORS INCREASINGLY WORRIED ABOUT SOCIAL CONCERNS LIKE GENDER EQUITY AND CLIMATE CHANGE, FORTIS IS WELL-POSITIONED TO BE AN INDUSTRY LEADER. BUT HOW WILL IT ADDRESS ITS FOSSIL FUEL OPERATIONS?

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NORA DUKE, FORTIS EXECUTIVE VICE-PRESIDENT OF SUSTAINABILITY AND CHIEF HUMAN RESOURCES OFFICER, ON THE DOCK IN ST. JOHN’S

APRIL 2020 / REPORT ON BUSINESS 45 On Jan. 17, snow was falling in New- assets that have a lighter environmental footprint than most utilities,” Perry foundland. That, in itself, is not surpris- says. “But that doesn’t get us off the hook.” ing. What is unusual is the flakes didn’t Indeed, Fortis still has two challenges to confront: coal and natural gas. The stop. In St. John’s, the city declared a state company is a producer of coal power in Arizona and a large supplier of natu- of emergency—within 24 hours, more ral gas in British Columbia. It also wants to become an even bigger player in than 76 centimetres of snow had fallen— the liquid natural gas (LNG) industry by expanding an existing facility in that businesses were closed, and people were province and building a pipeline for a proposed processing and export termi- advised not to leave their homes. nal operated by another firm. The question facing Fortis: How can it truly be an Barry Perry was among the snow- environmental leader while expanding its reliance on a fossil fuel? bound—like everyone, he spent time shovelling. But he had a particular reason to be concerned about the record-setting erry, 55, talks with an almost boyish enthusiasm about the util- storm. As CEO of Fortis Inc., he oversees ities industry, which he realizes might sound strange. “Maybe Newfoundland Power, a subsidiary that people look at the utilities business and go, ‘Oh my god, that’s provides electricity to 270,000 customers a boring business,’”he says. “I can tell you it’s the most excit- in the province. The storm knocked out ing damn business going right now.” The industry’s focus on power to about 10% of those consumers, cleaner energy, he says, is part of the reason. mostly due to snapped electrical wires Perry gave a speech at the Empire Club in Toronto last and salt spray from the Atlantic Ocean October about that topic and highlighted some of Fortis’s gunking up equipment. Crews toiled away initiatives, which included reducing emissions intensity by to restore emergency power, even as the P 63% between 2015 and 2018. Annette Verschuren, the former storm raged. Within 72 hours, electricity president of Home Depot Canada and current head of energy was flowing to all of Newfoundland Pow- storage firm NRStor Inc., stood up at the end to congratulate er’s customers once again. him. “What you’re doing,” she said, “is so bloody impressive. Perry saw it as a sign of strength. “We This is one of the best speeches I’ve heard since I’ve been involved in the elec- had about 15 hours of winds over 100 kilo- tricity market.” Perry looked a little flushed. metres an hour and three feet of snow, and He comes across as a humble guy, which could stem from his upbringing. the power system held,” he says. Perry is one of nine kids and was raised in Pound Cove, a small town on the east An accomplishment for Fortis, sure, coast of Newfoundland. At 16, Perry headed to St. John’s to study commerce but it’s not hard to find something a lit- at Memorial University, the only one of his siblings to complete university. tle unsettling about that storm. Extreme He worked for a local oil refinery and at Abitibi-Consolidated before joining weather events are expected to become Newfoundland Power as chief financial officer in 2000. more common as the Earth gets warmer, Fortis, which had been set up as a holding company for Newfoundland putting electrical infrastructure under Power more than a decade earlier, was undergoing a rapid expansion. Led by increasing strain. That’s partly why cli- Stan Marshall, Fortis snapped up assets across Canada, Belize and the Cayman mate change is top of mind these days for Islands. Perry eventually found himself working alongside Marshall as Fortis Fortis, which is a major power supplier in tried to break into the U.S. regulated utilities business. Eventually, in 2012, the five Canadian provinces, nine U.S. states firm got there with the US$1.5-billion purchase of an electric utility in New and three Caribbean countries. The St. York. After taking the helm in 2014 when Marshall retired, Perry didn’t waste John’s–based company, which has more time making his own landmark acquisition, executing the US$11.3-billion pur- than $50 billion in assets, is also position- chase of ITC Holdings Corp., an electricity transmission company with a pres- ing itself as a leader on environmental ini- ence in seven U.S. states. tiatives, striving to reduce its own green- The focus these days is less on hunting for acquisitions and more on invest- house gas emissions. ing in what the company already owns. Fortis plans to spend $18.8 billion in Some analysts think Fortis could earn a the next five years to upgrade its equipment and infrastructure. Investors have premium in the stock market for the prog- bought into the plan—the share price is up 40% since Perry became CEO— ress it has made on environmental, social and analysts are generally positive about the company. Even Andrew Bischof, and governance (ESG) fronts. ESG invest- a senior equity analyst at Morningstar who has a sell rating on Fortis, says ing, as it’s known, is becoming increas- that’s only because the stocks in the sector as a whole are expensive. (Investors ingly popular as pension funds and other flock to utilities during times of uncertainty, due to their stable and predictable institutional investors reward firms that nature.) “The management team has done a really nice job there,” Bischof says. make a priority of, say, addressing gender The ESG investing trend could help the stock fare better, however. The com- diversity or climate change. Four of the pany’s efforts toward gender parity are noteworthy. Not only do women com- company’s 11 board members are women, pose about one-third of the executives throughout the Fortis group of compa- as are 60% of the employees at head office. nies, but women make up around 40% of its executive talent pipeline. “You can On the environmental front, Fortis started have many programs and many different initiatives, but unless you’re really from a strong position: About 93% of its committed to [gender parity] in the long term, I don’t think it really moves the assets are dedicated to electricity trans- needle,” says Nora Duke, the company’s executive vice-president of sustain- mission and distribution, while only a ability and chief human resource officer. Like many other companies, Fortis small portion involves power generation. hosts professional development programs and events for women, but Duke is “We are fortunate that we’ve been buying a little hard pressed to isolate any one factor to explain the company’s results,

46 APRIL 2020 / REPORT ON BUSINESS other than executives making it a priority. “When we, as leaders, commit to it, British Columbia for a proposed facility things start to happen,” she says. operated by Woodfibre LNG Ltd., a sub- Fortis will try to use that same focus to get rid of coal. sidiary of Pacific Oil & Gas Ltd. in Singa- pore. Stretching 47 kilometres, the Fortis pipeline will be a fraction of the size of the Perry is the first to admit Fortis has more work to do. It is, after all, the Coastal GasLink pipeline, which will wind operator of a coal-fired power plant in Arizona through a subsidiary called across 670 kilometres of land to the LNG Tucson Electric Power. Those coal assets make up less than 5% of Fortis’s rate Canada facility near Kitimat, B.C. base, he points out, adding that the Arizona utility is nine years ahead of sched- While the Fortis pipeline may not gen- ule in reaching its goal of having 30% of its retail sales consist of renewable erate headlines like its much larger peer, it energy. The utility will hit that target next year, owing to the construction of a hasn’t escaped controversy. Tracey Saxby 247-megawatt wind farm in New Mexico. co-founded the environmental group My Coal may be a small part of the Fortis business, but emissions are a different Sea to Sky in 2014 in opposition to the story. In 2018, the company produced more than 11,000 kilotonnes of direct proposal. “LNG has been framed as clean greenhouse gas emissions, according to its sustainability report. Coal power energy, but it’s not,” she says. made up 67% of the total, owing to the Springerville Generating Station in The project is not a done deal: Wood- Arizona. But Fortis doesn’t have any plans to shut it down any time soon. “That fibre LNG has yet to make a decision on plant will continue to operate for some time,” Perry says. whether to go ahead. And even proj- Why not phase the plant out? There are cost considerations and the ques- ects already under construction can get tion of what could replace it, Perry says. “The battery storage technology is derailed. Protests have delayed the con- nowhere near where it needs to be,” he says of renewable energy. struction of the Coastal GasLink pipeline. Natural gas presents another issue. Fortis is a large supplier of the fossil fuel Perry declines to say what ran through his in British Columbia and wants to play an even bigger role in the nascent LNG head as the outcry spread across the coun- market. The firm already produces about 53,000 tonnes of LNG for export to try. He’d much rather talk about the role China at its facility on the Fraser River, the only Canadian company to do so Fortis can play in driving cleaner energy today. It has plans to boost capacity at the facility, from 250,000 tonnes of LNG consumption. “To be part of that massive to 4.5 million tonnes annually. transition away from carbon fuel?” He The company is also slated to build a natural gas pipeline on the coast of pauses. “Yeah. Wow.” WHAT’S THE BEST WAY TO CREATE AN INCLUSIVE COMPANY? Three leaders recently appeared on stage at a CEO Global Network event to weigh in on the question. They were Lenna Bradburn, Canada’s first female police chief, who led the service in Guelph, Ont.; Sonia Kang, a University of Toronto associate professor of organizational behaviour and human resource management; and Carinne Chambers-Saini, co-founder and CEO of Diva International, which makes the Diva Cup. In a conversation moderated by The Globe and Mail’s Deborah Aarts, the experts discussed building —and maintaining—an inclusive workplace. Here are some edited highlights.

An example of this from city planning is curb cuts. If you have a stroller, it makes it really easy to get up on the curb. If you have any kind of mobility impairment or if you’re walking with a small child, it helps you to get up on the curb. The reality is they’re put in to accommodate wheelchairs, but so many other people are able to benefit from them. That’s the idea of extreme inclusion, where small practices end up helping people who were not the original targets. had aging parents, started to think Bradburn: I think sometimes we that was a great idea. The concept of forget organizations are just groups elder care and child care just seemed of people. We are mothers, fathers, to go together. In putting those ideas children and parents. You need to forward, we were able to get the power consider the needs of everybody in the brokers to understand how it could organization. A simple example: When relate to them. I first went into the service, we were only ordering large latex gloves for How do you change officers to take in their cruisers. Most hiring practices? of the women—and a good number of Kang: The most important thing we the men—were going to the ER of our can do at an organizational level is local hospital and asking the nurses build structures that make it less for small and medium-size gloves. likely that people are going to fall Chambers-Saini: We recently put in victim to their own biases. We think What’s the goal? a work-from-home policy—which about stereotypes, and it’s very, Kang: When we’re thinking took us over a year. We had an very difficult, if not impossible, to about inclusion, oftentimes we employee group, from all levels of overcome those challenges. What we can think really narrowly about the organization, that developed this have to do instead is build structures inclusion. People think, Okay, how program. I’m really excited to see how and processes so that people can’t can I accommodate women? How it actually improves productivity. If apply those biases. A concrete can I accommodate people from you don’t have to fight traffic twice a example is anonymous resumé sexual minority groups? How can week, and you can be home right at screening. There’s really no need I accommodate people from racial four o’clock when your kids get home, when you’re looking at resumés to minority groups? rather than thinking it doesn’t really affect productivity. know the person’s name. There just about creating a holistic inclusive Bradburn: I recall, back in the ’80s, isn’t. From my own research, I know FODEN organization. The idea is basically trying to get child-care policies in that resumés that have Black or Asian creating an organization where every place in the Toronto Police Service, names are 20% to 25% less likely to STEPHANIE single person will feel included, and we wanted to have job sharing as get a call back with the exact same without having to think about the one of those strategies. It wasn’t until resumé information. So invest in the individual needs of each person. In we started talking about elder care resources to do anonymous screening my work, I call this extreme inclusion. that the head of labour relations, who of resumés. There is software out PHOTOGRAPHS

48 APRIL 2020 / REPORT ON BUSINESS The Globe and Mail’s Deborah Aarts (far left); three leaders (left to right) Lenna Bradburn, Sonia Kang, Carinne Chambers-Saini

there to help you do that. Chambers-Saini: We’re changing the way we evaluate how someone is going to fit into our organization, including having potential co-workers do actual interviews. Once we’ve screened them, they go to the next round with a peer-to-peer interview. Kang: There’s research showing that the most powerful way to increase diversity in hiring is by putting people in charge of those things. Have diversity managers and diversity task forces that are specifically responsible for ensuring diversity in recruitment and hiring. Then hold them accountable once people are hired to make sure they don’t leave. Give people the power rather than a high-level ideal. Chambers-Saini: I don’t think But get out of your head and get How do you stay inclusive? we should look at diversity and into your body. Think about Bradburn: When I was in Guelph, inclusion in the workforce as a box connecting your ideals to the specific the person who was closest to an and say, “Okay, we need to have so behaviours. Oftentimes you’re in issue would write the policies and many women.” That’s why I don’t a meeting, a hiring meeting, and procedures, unless there was a like the idea of having it mandated someone says something vaguely compelling reason to do otherwise. or legislated. It has to come more sexist, and then two days later, you’re That was a really big mind shift in a organically as a benefit to the like, “Oh, I should’ve said this thing.” policing context. We were used to organization. Be prepared with the thing before going to somebody else to make the Kang: Most of the time when we see you go to the meeting. Get out decision, rather than enabling the people talking about diversity and of your mind and into your body, front-line member. inclusion, it’s in a very idealistic way. your voice, and your actions.

APRIL 2020 / REPORT ON BUSINESS 49 2020 HONOUREES WITH AN AVERAGE OF 44% WOMEN COMPRISING THEIR EXECUTIVE RANKS, THESE COMPANIES OFFER A BENCHMARK FOR OTHERS. COMPANIES WERE GROUPED BY MARKET CAP, THEN LISTED ALPHABETICALLY. FOR OUR FULL METHODOLOGY, SEE PG. 27

1-YEAR WOMAN TIER 2 TIER 3 REVENUE CEO OR EXECUTIVES EXECUTIVES COMPANY INDUSTRY GROWTH EQUIVALENT % WOMEN % WOMEN $5 BILLION+ Roughly 5% of pilots around the world are women. To address this imbalance, flight simulator maker CAE launched its Women in Flight scholarship program last year, which awards five scholarships to aspiring women pilots and provides the candidates with their first jobs through partner airlines. Roughly a decade ago, the Quebec-based firm itself had no women among its executives, but it has made significant changes through an emphasis on cultivating talent. Last year, CAE launched Dare, a one-year training Rekha Ranganathan, program aimed at addressing common issues women face at work, president, CAE Healthcare such as negotiating, networking and taking risks.

CAE Inc. Industrial products 16.1 No 50 20

Dollarama Inc. Retail 6.6 No 50 33

Fortis Inc. Gas & electrical utilities 0.48 No 33 50

Genworth MI Canada Insurance -8.03 No 43 N/A

H&R REIT Real estate developer -18.85 No 33 40

Intact Financial Insurance 13.29 No 40 32

Lundin Mining Mining -15.75 Yes 17 43

Parkland Fuel Retail 50.46 No 38 N/A

This year, Royal Bank of Canada released “That Little Voice,” a series of videos aimed at promoting inclusion in the workplace. “You know that little voice in your head? The one that tells you to ignore a tasteless joke?” asks a voice- over. “Instead of listening to that little voice, you need to find yours and make it heard.” The initiative covers various forms of exclusionary behaviour, ranging from overt racism to interrupting a female colleague in a meeting. In addition to the videos, the bank released guidebooks to help employees Helena Gottschling, chief HR officer confront unwelcome behaviour when they see it.

Royal Bank of Canada Banks 13.83 No 22 41

Sun Life Financial Insurance 3.43 No 27 53

TC Energy Management -3.42 No 38 N/A

Toromont Industries Wholesaler 49.19 No 0 100

MARKET CAP DETERMINED AS OF FEB. 28, 2020 50 APRIL 2020 / REPORT ON BUSINESS 1-YEAR WOMAN TIER 2 TIER 3 REVENUE CEO OR EXECUTIVES EXECUTIVES COMPANY INDUSTRY GROWTH EQUIVALENT % WOMEN % WOMEN $2 BILLION ttoo $5 BILLION

As a retailer catering to women, Aritzia has a workforce that is overwhelmingly female, including 98% of its retail management team. Half of its executive team is women, including president and chief operating officer Jennifer Wong, who joined the company in 1987 as a part-time sales associate. In her various roles, she oversaw both the company’s U.S. expansion in 2007 and the successful launch of its Jennifer Wong, president and COO e-commerce business in 2012.

Aritzia Inc. Retail 16.06 No 50 100

Ballard Power Systems Industrial products -20.15 No 0 100

Boardwalk REIT Real estate developer 2.11 No 40 50

Capital Power Gas & electrical utilities 28.05 No 25 100

Chartwell Retirement Residence Other services (retirement homes) 9.92 No 67 71

Real estate firm Colliers has operated a mentorship program since 2016, with the number of participants growing 32% year over year. Of the women who have participated in the program, 43% have been subsequently promoted. Further, the company has made efforts to increase the number of women it hires, reaching 48% in 2018, up seven percentage points from two years earlier. Becky Finley, SVP

Colliers International Other services (real estate) 16.06 No 14 77

Cominar REIT Real estate developer -12.01 No 67 27

Dream Unlimited Real estate developer 1.07 Yes 50 N/A

First Capital REIT Real estate developer -26 No 50 67

First Majestic Silver Precious metals 14.81 No 67 N/A

Green Thumb Industries Biotech & pharmaceuticals 586.46 No 50 N/A

Hudson’s Bay Co. Retail -1.24 Yes 22 N/A

Killam Apartment REIT Real estate developer 15.03 No 60 67

Linamar Corp. Industrial products 16.62 Yes 7 22

Lions Gate Entertainment Entertainment -10.86 No 38 33

PrairieSky Royalty Oil & gas production -21.02 No 50 100

Seven Generations Energy Oil & gas production 31.95 No 33 38

TransAlta Corp. Gas & electrical utilities 2.11 Yes 43 0 $500 MILLION to $2 BILLION AltaGas Canada Oil & gas production -0.41 No 67 0

Aphria Inc. Biotech & pharmaceuticals 281.35 No 57 25

Cogeco Inc. Broadcasting 8.35 No 33 60

Corus Entertainment Entertainment 1.92 Yes 14 49

Equitable Group Financial services 18.13 No 38 N/A

APRIL 2020 / REPORT ON BUSINESS 51 According to Laurentian Bank’s diversity policy, at least 30% of the bank’s independent directors should be women. Currently, Laurentian has exceeded that target, with women representing half of its board.

Deborah Rose, EVP and COO

Laurentian Bank of Canada Banks 13.29 No 17 58

Magellan Aerospace Industrial products 1.18 No 100 29

Mainstreet Equity Real estate developer -6.76 No 0 100

MTY Food Group Other services (restaurant) 26.83 No 40 45

New Look Vision Group Other services (eye care) 27.48 No 50 50

Park Lawn Other services (funeral homes) 84.03 No 0 75

Russel Metals Wholesaler 26.29 No 100 57

Sienna Senior Living Other services (retirement homes) 14.89 Yes 67 100

StorageVault Canada Other services (storage) 56.13 No 50 50

Torex Gold Resources Precious metals 44.07 No 50 33

1-YEAR WOMAN TIER 2 TIER 3 REVENUE CEO OR EXECUTIVES EXECUTIVES COMPANY INDUSTRY GROWTH EQUIVALENT % WOMEN % WOMEN UNDER $500 MILLION Athabasca Oil Oil & gas production -3.61 No 0 100

BMTC Group Retail -0.19 Yes 50 0

Caldwell Partners Intl. Other services (recruitment) 15.73 No 0 75

Calian Group Other services (consulting) 10.74 No 25 100

Cervus Equipment Consumer products 10.65 Yes 25 33

Chesswood Group Retail 15.36 No 100 N/A

Clearwater Seafoods Food production or distribution -10.45 No 50 33

Conifex Timber Forest products 42.59 No 100 25

Golden Star Resources Precious metals -11.82 No 25 67

Indigo Books & Music Retail -3.02 Yes 20 71

ISC Other services (data management) 8.67 No 25 75

K-Bro Linen Other services (uniforms) 40.51 Yes 50 N/A

Le Chateau Retail -6.62 Yes 50 50

Lucara Diamond Mining -20.19 Yes 100 50

MCAN Mortgage Financial services -1.87 Yes 38 N/A

Mediagrif Interactive Tech. Technology 3.03 No 40 50

Mogo Inc. Technology 24.9 No 50 N/A

52 APRIL 2020 / REPORT ON BUSINESS

1-YEAR WOMAN TIER 2 TIER 3 REVENUE CEO OR EXECUTIVES EXECUTIVES COMPANY INDUSTRY GROWTH EQUIVALENT % WOMEN % WOMEN

Perpetual Energy Oil & gas production 19.61 Yes 25 N/A

Pine Cliff Energy Oil & gas production -16.37 No 50 50

Prairie Provident Resources Oil & gas production -5.86 No 100 33

Reitmans (Canada) Retail -4.73 No 50 63

Roots Retail 2.85 No 50 50

Sherritt International Mining -75.81 No 17 100

Sportscene Group Other services (restaurant) 9.77 No 33 50

Just over a year ago, underground mining firm Trevali had no women on its executive team. In addition to appointing new female executives, the company has also increased the number of women on the senior management teams of its various operations. The chair of its board of directors is Jessica McDonald, a former CEO of BC Hydro. Joanne Thomopolous, chief people officer

Trevali Mining Mining 21.09 No 40 N/A

TVA Group Broadcasting -6.41 Yes 30 N/A

WildBrain Entertainment 3.34 No 50 50

Yellow Pages Publishing & printing -20.71 No 0 100

WOMEN LEAD HERE

PrairieSky Royalty is proud to celebrate its many female business leaders and the outstanding contributions they make to our organization, industry and communities.

HIGH MARGINS ZERO CAPITAL Congratulations to theserecent appointees

Phillip Crawley, Publisher & CEO of The Globe and Mail, extends best wishes to the following individuals who were recently featured in the Report on Business Section of The Globe and Mail newspaper. Congratulations on your new appointments.

Elizabeth Boright Liane Kelly Gordon Johnson Jason Storah Bernard Lord to Alberta to Board of Directors to Vice-Chair to Chair of the to Board of Directors Managing Director B2Gold Corp. British Columbia Board Cogeco Accenture Securities CANATICS Communications Commission (BCSC)

Mike Gooley Michelle Rutledge Golnaz Yekrangian R. Jeffrey Orr Julia McGillis to Managing to Senior Director to Senior to President to Canadian Data Director Ferguson Partners Managing Director, and CEO and Analytics and Ferguson Partners Financial Services Power Corporation Fintech Practices Ferguson Partners of Canada Spencer Stuart

Nirvan Nuckchedee Michelle Sharp Sheila Murray Caroline Riseboro to North American to North American to Board Chair to President Industrial Practice Human Resources Teck Resources and CEO Spencer Stuart Practice Limited Trillium Health Spencer Stuart Partners Foundation

APRIL 2020

To make arrangements for an Appointment Notice, please call 1-800-387-9012 or email [email protected] View all appointment notices online at www.globeandmail.com/appointments

WEALTH SMART MONEY

ERICA LAU CHIEF EXECUTIVE OFFICER AND LEAD PORTFOLIO MANAGER, NORTH GROWTH MANAGEMENT LTD., VANCOUVER Fossil-free investing is now gaining momentum, but added smaller tech names, such as Vancouver-based North Growth Management has long Motorola Solutions, a data com- been far ahead of the curve. The firm oversees $642 munications and telecom equip- million in assets, and its North Growth U.S. Equity Fund ment provider. In health care, we like Bristol-Myers Squibb after its sold its last energy stock 15 years ago. Launched by Rudy purchase last year of Celgene, a North (a co-founder of the former Phillips, Hager & North biotech we owned. Bristol-Myers Investment Management Ltd.), the company also shuns has a strong oncology franchise and tobacco stocks. Managers say these strategies haven’t hurt can benefit from Celgene’s drug long-term returns. Since its inception in 1992, the U.S. pipeline. Medical device compa- stock fund has outpaced the S&P 500. We asked veteran nies, such as Abbott Laboratories and Zimmer Biomet Holdings, portfolio manager Erica Lau, 45, why she still eschews oil have done well for us. We also own and gas, and is bullish on electronics retailer Best Buy. health insurer Anthem despite some U.S. Democratic presidential Investment giant BlackRock Inc. announced plans in candidates calling for a publicly funded health January to shift out of fossil fuel stocks in its actively care system. Political headwinds come and go. We managed funds. Why did North Growth decide early just pay attention to the fundamentals. on to avoid energy and tobacco? Why do you own Best Buy when retailers are We divested our last oil and gas stock, Chesapeake struggling? Energy, in 2005. At that time, oil and gas produc- We see value in this sector because some retail- ers didn’t meet our strategy to buy growth stocks ers have undergone a lot of changes. Best Buy at reasonable prices. Our fossil-free position has shares gained 64% last year. It has grown earnings since evolved, and we now believe those invest- because of its online offerings and services. It owns ments don’t offer compelling returns as the world Geek Squad tech support, and it bought Great Call shifts toward decarbonization to mitigate climate and other companies to offer health care and tech- change. Oil and gas stocks are also pretty risky nology services to seniors. We still like American because they’re a commodity play. We have never Eagle Outfitters and Urban Outfitters, even though owned tobacco stocks, but that is a moral position their stocks underperformed last year. Both retail- of our founder, who believes other industries can ers have strong balance sheets and omnichannel offer equally attractive returns. E-cigarette, vaping retail strategies. We believe those brands are still and cannabis stocks are also prohibited. valuable to consumers. How are you investing in energy now? What is your outlook for the U.S. stock market? GEMENT We have been investing in clean and renewable We have been cautious since 2017. We’re in the

MANA energy since 2010. We believe that non-carbon- longest U.S. economic expansion and bull market

TH based sources will capture the dominant share ever, with huge political uncertainty and geopo- OW of global energy demand growth. We own First litical risks. The coronavirus will also have a nega- GR

TH Solar, a manufacturer of solar panels. We also tive impact globally. We expect slower economic like SolarEdge Technologies, which makes power growth and earnings this year. As a defensive NOR optimizers that attach to the back of solar panels move, we have diversified—we are holding more and inverters, which harvest the power. It was the stocks that have smaller weightings. /Shirley Won

RETURNS: fund’s top performer last year with a 163% gain. R

FO In our younger Canadian Equity Fund, we have CE long been shareholders of Ballard Power Systems, NORTH GROWTH U.S. EQUITY FUND ($CDN) ANNUALIZED % RETURN UR 1-YEAR 6.5 SO whose hydrogen fuel cells can power electric 10-YEAR 13.8 ON; buses and trains. Fuel cells can be more effective than battery technology, which has limited range SINCE INCEPTION (OCT. 1992) 12.4 CHINS and use in heavy-duty vehicles. Ballard is not yet HUT

Y profitable, but we believe in the long-term story. S&P 500 INDEX ($CDN) Where else do you see opportunities? 1-YEAR 10.3 MARLE Our U.S. fund is invested 40% in technology and 10-YEAR 15.4 APH 20% in health care. As valuations rose, we reduced GR our weightings in Microsoft and Apple, which SINCE OCT. 1992 10.0 TO we have owned since the early 2000s. We’ve RETURNS TO FEB. 28, 2020 PHO

APRIL 2020 / REPORT ON BUSINESS 57 WORD MENTIONS, FED BEIGE BOOK FOR YOUR CONSIDERATION 60 ATS AUTOMATION TOOLING CORONAVIRUS SYSTEMS INC. CAMBRIDGE, ONT. TARIFF REVENUE (2019) 50 US$1.3 BILLION TRADE PROFIT (2019) US$71 MILLION UNCERTAINTY P/E RATIO (TRAILING) 40 31

Many star Canadian tech companies have suffered a painful reckoning after a 30 visionary founder or CEO leaves (hello Ballard, Nortel, BlackBerry and plenty more), and solid recoveries are rare. It’s 20 very hard to come back. ATS Automation Tooling Systems Inc., based in Ontario’s Waterloo Region tech hub, was founded by German- 10 born engineer Klaus Woerner in 1974, and it grew to be an international leader in making manufacturing equipment for JANMAR APR JUN JUL SEP OCTNOV JANMAR autos, pharmaceuticals and other 2019 2020 industries. But after Woerner died in 2005, ATS’s share price DECODER sank by more than half as activist investors wrestled control of the WANT TO TRACK MARKET ANXIETY? board in a proxy fight in 2008. LISTEN TO THEIR WORDS The recovery in revenues and earnings was uneven at first. But current CEO Andrew In early March, the day after trade war with China had Committee meets to U.S. Federal Reserve chair dramatically given way vote on rate decisions Hider arrived in 2015, and he has Jerome Powell announced to anxiety over the spread (the early March cut was steadied progress. An American- a surprise interest rate of COVID-19. unscheduled), has come born engineer and MBA, Hider, cut driven by fears the For instance, several to be closely watched 42, has been a senior executive coronavirus could cripple representatives of the by investors as a leading at a half-dozen companies, the economy, the release manufacturing sector indicator for the health of of the Beige Book gave told the Dallas Fed that the economy. However, including General Electric Co. investors and economists the virus “was negatively its forecasting powers and the Taylor Made Group. further insight into what impacting their supply have long been disputed. Based on his experience, Hider motivated the central bank chain, particularly in One 2002 study, in the isn’t betting on one product or to act. Named for its bland- high-tech and chemical Journal of Money, Credit & world-beating technology; he’s coloured cover, the report manufacturing.” The Banking, determined the is a collection of anecdotes Atlanta Federal Reserve Beige Book has “significant counting on process, precision and observations from local heard from transportation predictive content for and teamwork—plenty of all businesses, economists executives who reported current and next quarter three. “One thing that’s true and market participants that “cancelled flights real GDP growth.” On the across those companies, when gathered by the 12 regional to China have reduced other hand, an earlier study I build a strong team, they federal reserve banks. air cargo capacity by the Minneapolis Federal The latest edition showed significantly.” Meanwhile, Reserve deemed it “a deliver,” he says. clearly what was on their tourism officials told the better mirror than a crystal ATS has customers in four minds. Oxford Economics Richmond Fed about groups ball.” As the full extent broad market segments: life counted how often certain calling off travel plans to of coronavirus becomes sciences, transportation, energy words appeared in the the District of Columbia more apparent over time, and consumer. But within them, last year’s worth of Beige over coronavirus fears. investors will likely watch Books. The tally showed The Beige Book, released the words in subsequent it likes very specific industries fears over tariffs and eight times a year before Beige Books even more and products, many with President Donald Trump’s the Federal Open Market closely. /Jason Kirby complex regulations, such as

58 APRIL 2020 / REPORT ON BUSINESS WEALTH

ATS VERSUS THE INDEX PERCENTAGE CHANGE OVER THE PAST 10 YEARS pharmaceuticals or nuclear, which pose high barriers to 172.5% entry for upstart competing manufacturers. ATS AUTOMATION Those barriers also keep profit margins healthy. Hider cites Insulet Corp, which makes the TSX COMPOSITE INDEX Omnipod, an intricate wearable 43% device that administers insulin to diabetes patients. Insulet had been manufacturing in China. MARCH 1, 2010 FEB. 27, 2020 But ATS helped the company shift to Massachusetts—“not mergers and acquisitions, the price since the bottom of the exactly a low-cost region,” he ABM provides a roadmap with financial crisis in 2009 has says—in 2018, which improved yearly, quarterly and even daily indeed been impressive. It has quality and Insulet’s margins. performance targets. climbed by about 400%, roughly ATS’s own structure is also “When we look at capital four times more than the S&P/ very complex. The company allocation, it’s what’s going to TSX Composite Index. That’s operates in 22 countries, and drive the highest return to our put the stock at a relatively high its investor presentations are shareholders,” says Hider. (He price-earnings ratio lately, but it chock full of elaborate diagrams rarely goes more than a few has swung widely on occasion, outlining its ATS Business sentences without using the like a 40% decline in late Model (ABM). Whether word “drive” emphatically). 2018. Classic advice applies: investing internally or through The growth in ATS’s share Buy on the dips. /John Daly

Go Far. Together. Partner with us by visiting cumberlandprivatewealth.com or call 1 800 929 8296 Cumberland Private Wealth Management Inc. | Toronto | Calgary | Kingston ings, so they constantly have to refresh their sites. There’s a con- stant need for content. Plus, the old model meant you would have to get a Canadian sale, and then find U.S. and international sales. You’d have to piece the whole thing together. Now, it’s much easier to put shows together. And when you deliver, they drop in 190 countries and 40 different languages. So with Beat Bugs, we felt we should go to where more peo- JENNIFER TWINER MCCARRON ple’s eyeballs were. We pitched CEO of Thunderbird it to Netflix in Los Angeles, and Entertainment since June 2018 we sold it in the room. We went off and made 52 episodes and set 2019 revenue up a toy line. We still have great $61.5 million relationships with the Canadian Frank Giustra, the broadcasters—we do a ton with billionaire founder of Lion’s Gate Discovery, like Highway Thru Entertainment, Hell, and with CBC on Kim’s is a director Convenience. And those places Thunderbird’s are having a renaissance as well, roster includes Kim’s Convenience because they have to compete on CBC; Highway with streaming. Thru Hell on A year after Beat Bugs, Thun- Discovery; and The Last Kids on derbird asked me to run the TURNING POINT Earth on Netflix entire company, and five months later, we went public. It’s a steep learning curve—it’s like Stream house the MBA I never got. Though I’m still more comfortable in a The dawn of the Netflix age sparked a content bonanza— boardroom at Disney than I ever and thanks to Jennifer Twiner McCarron, Thunderbird am on Bay Street. Entertainment is growing right along with demand We now have 1,000 employ- ees. We’ve opened an animation studio in Ottawa and increased I grew up in production. My first job, in the late ’90s, was our footprint in L.A.—we have at Mainstream Entertainment, where they were doing about 120 people there. That’s the first computer-animated TV series, called ReBoot— where all the buyers are, so hav- that show is now in the Smithsonian. While I was on ing boots on the ground was key maternity leave for the second time—it turned out to be twins—I got to starting to grow the business a call from Atomic Cartoons, which only had about 20 people and through sales. It doesn’t dimin- wanted me to help build the studio. In 2015, we signed a deal with a guy ish us as a Canadian entity; it has in Sydney who had the rights to the Beatles’ music, and we developed just given us more places to sell it into the show Beat Bugs. Thunderbird Entertainment acquired us, that content. and it invested quite a bit of money in the show. Since we live in a day and age Back in the day, we were all vying for a Saturday morning cartoon where you can watch any time, spot between 8 a.m. and noon. But then Netflix changed the game, not anywhere, on any device, only just with streaming but by setting itself up as a studio. When it bet the the best will stand out. So we’re

house on House of Cards—and spent US$1 million per episode—things staying true to our mission: mak- T started to shift. ing content that makes the world OT SC

The reason everyone wants to get into streaming is because it’s a a better place. If you boil down LE great business model, and you have all these new players that aren’t the value of our work in the kids KY exactly startups: Apple and Disney and HBO and NBC. And it’s a space, we’re helping parents ION AT great time for us to be content creators, because there’s such a luxury cook dinner quietly. We’re not TR of places to sell to. Streamers are measured on subscribers, not rat- saving the whales. /Dawn Calleja US ILL

60 APRIL 2020 / REPORT ON BUSINESS Looks smart. Parks smart. All-new SONATA.

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™/®The Hyundai name, logos, product names, feature names, images and slogans are trademarks owned or licensed by Hyundai Auto Canada Corp.. All other trademarks and trade names are the property of their respective owners. 1Remote Smart Parking Assist (RSPA) can assist with parking the vehicle. RSPA may not function correctly if one or more of the parking sensors is damaged, dirty or covered or if weather conditions (heavy rain, snow or fog) interfere with sensor operation. RSPA will not assist in parallel parking and can only assist in moving the vehicle in a parking spot forwards and backwards. To operate RSPA, the operator must be outside of the vehicle but within a range of 12 feet of the vehicle. Always inspect the parking area with your own eyes for any potential hazards, dangers or safety issues. Operator remains responsible to stop the vehicle to avoid a collision or accident. Operator is responsible for ensuring the safe operation of the feature and ensuring that the parking area is free from obstacles, pedestrians, etc. See Owner's Manual for further details and limitations. Claim based on Global Automakers of Canada segmentation for the intermediate segment as of November 2019. For all life’s ups and downs.

The 2020 Subaru Forester offers adventure-ready features like X-MODE® with Hill Descent Control and Symmetrical Full-Time All-Wheel Drive. Make the most of all life’s rallies at Subaru.ca/Forester.

EyeSight® is a driver-assist system, which may not operate optimally under all driving conditions. The driver is always responsible for safe and attentive driving. System effectiveness depends on many factors such as vehicle maintenance, and weather and road conditions. See Owner’s Manual for complete details on system operation and limitations. Ratings are awarded by the Insurance Institute for Highway Safety (IIHS). Please visit www.iihs.org for testing methods. Forester and Subaru are registered trademarks.