Welch Now Says Shareholder Emphasis ‘Misplaced’
Total Page:16
File Type:pdf, Size:1020Kb
Time is money. So why waste it waiting in long airport check-in and security line-ups? Why lose valuable meeting time because of an overcrowded commercial flight? LAS lets you fly when you want, with check-in only about 15 minutes before departure. From short hops to overseas trips, our experienced pilots and meticulously kept fleet provide ultimate safety, comfort and convenience. Call 604-272-8123 to find out more. Watch your efficiency soar. Toll Free: 1-877-399-8123 • www.londonair.com March-April 2009 • VOLUME 48 • NUMBER 12 Inside Sea change: Welch now says shareholder emphasis ‘misplaced’ BY DARCY REZAC The Financial Times (FT) recently reported that Jack Welch, General Electric’s legendary former CEO, Olympic contract 7 long associated with the “share- holder is king” movement adopted widely in corporate America beginning in the ‘80s, has now taken up a different mantra. Since Mr. Welch made the concept famous in a speech at New York’s Pierre Hotel in 1981, new financial incentives based on share price alone followed. This resulted in a Blossom power 15 quarterly obsession with profits and a single-focus ‘shareholder Events Calendar 2 value’ mantra for business. Wall 2010 3 Street was quick to reward this Spirit of Vancouver 4 attitude with hefty pay packets. Auto Leasing 5 The shareholder value ap- Key Issues 7 proach quickly became the new corporate religion and swept HOMSON Footprints 9 T the world. It still prevails today. Chairman’s Message 6 Except… it didn’t work and wasn’t Rix Center 11-18 sustainable. Today, according to J. PHOTO: Active Citizenship 19-20 the FT article, that focus is seen as Managing director Darcy Rezac explained the importance of connecting with other stakeholders in business, in addition to shareholders, on CNBC Europe Morning Exchange after his 2004 lecture at the Canadian High Commission, London. Continuing Education 21 a root cause of the world’s current Training/Coaching 22-23 economic chaos. “Immediate your employees, your customers win out amidst financial turmoil tainly, but others too--including a Member News 24 shareholder value maximization, and your products.” This latter born of wrong assumptions and sustainable planet. It is what The Events & Speakers 25 by itself, was always too short-term point represents a sea-change in bad ideas from the last century. Vancouver Board of Trade’s new Health & Wellness 26 in nature,” says Jeffrey Sonnenfeld management thinking for the 21st And, it is also good to see Jack Rix Center for Corporate Citizen- at Yale School of Management. “It century. Welch reincarnated as a born- ship and Engaged Leadership is Around the Board 27 created a fleeting illusion of value This broader focus on a range again stakeholder leader this time all about. by emphasizing immediate goals of constituencies, or stakehold- around. Fortune magazine said See our Rix Center pullout Quote of the month over long-term strategies.” ers, rather than a sole focus on it best in a recent open message section, pages 11-18. Happiness for a Speaking at a recent confer- profits is not a new idea. Johnson to Welch, “The shareholder isn’t Source: Financial Times article, ence on the future of capitalism, and Johnson’s credo based on king, Jack. The customer is, always Welch Denounces Corporate Obses- day? Go fishing. For a Welch now says that focusing stakeholders has sustained that has been.” sions, March 13, 2009. Also see lifetime? Help others. solely on quarterly profit increases company’s success since adopted As Peter Drucker famously Community Connections by Daniel was “the dumbest idea in the in 1942. It is an emphasis on: Cus- said, “the purpose of business is F. Muzyka and Darcy Rezac, Globe 11 world.” “Shareholder value is a tomers first, then employees, to discover a customer.” and Mail, June 25, 2007 on Board boardoftrade.com result, not a strategy,” he says. communities and shareholders. This broader multi-stakeholder Business Review Online at http:// “Your main constituencies are It is heartening to see the J&J view view includes shareholders cer- tiny.cc/communityconnections Rix Center for Corporate Citizenship & Engaged Leadership opens its doors! See Chairman’s Message, page 6 See 8-page special pullout section, pages 11-18 board calendar For full details or to register, visit www.boardoftrade.com Lights, Camera, Action! The Vancouver Board of Trade OUTtv; Sue Paish, CEO, Pharma- 4:45 – 7 p.m. UBC Robson Square. Cable Program Guide April save Drugs Ltd., Founding Chair, Event #091201 WLC®; David H. Turpin, President PROGRAM AIR DATES 2 | Governors’ Banquet and Vice-Chancellor, UVic Distinguished Speaker THE VANCOUVER BOARD 15 | ® BUILDING VANCOUVER: The creative Mar 29 6:30 p.m. COMMUNITY AND CORPORATE Program OF TRADE ANNUAL GOVERN- CITIZENSHIP. 7:30 – 9 :3- a.m. Nikos Koumettis, President, economic capital of the world to Apr 5 3:30 a.m. ORS’ BANQUET: A salute to the Sutton Place Hotel. Sponsored by Coca-Cola Canada Ltd. Mayor Gregor Robertson, City of Vancouver Vancouver Airport Authority. 6 BD Agro and TelUS. KEEPING OPTIMISTIC: The p.m. Fairmont Hotel Vancouver. Event #091211 Olympics, partnerships and the ICBC: Focusing on the customer Apr 5 6:30 p.m. Sponsored by The Fairmont Hotel future. The Fairmont Waterfront. Jon Schubert, President & CEO, ICBC to Apr 12 3:30 a.m. Vancouver, London Air Services, British Columbia 11:45 a.m. – 2 p.m. Sponsored by The Vancouver Sun, The Province 7 | Leadership Lunch Coca-Cola Canada. Presented in and National Post. Event #091207 The Honourable Gordon Camp- co-operation with The Company PACIFIC GATEWAY FORUM ’09: Canada’s Apr 12 6:30 p.m. bell, Premier, Province of British of Young Professionals™. Pacific Gateway to Apr 19 3:30 a.m. Leaders of Tomorrow Columbia Event #091218 The Honourable Kevin Falcon, Minister of 3 | Transportation and Infrastructure, Fred Withers, Managing LEADERSHIP IN TOUGH TIMES. Partner Ernst & Young LLP 11 a.m. – 2 p.m. Expanded Van- Networking Government of British Columbia EXECUTIVE ROUNDTABLE 15 | couver Convention Centre. Roundtable SERIES WITH ERNST & YOUNG. Event #091216 Improve your business network PACIFIC GATEWAY FORUM ’09: Bordering Apr 19 6:30 p.m. 11:45 a.m. – 1:30 p.m. 700 West with The Vancouver Board of on the Future - Choices and Challenges to Apr 26 3:30 a.m. Georgia Street. Sponsored by 8 | Managers’ Toolbox® Trade’s Networking Roundtable for the Canada-U.S. Border Business Objects. Event #091215 Peter Johnston, author, series. 4:15 – 6 p.m. Terminal City The Honourable John Manley, P.C.; Counsel, Negotiating With Giants: Get Club. Event #091202 McCarthy Tétrault LLP; Former Deputy Prime 6 | Members’ Reception what you want against the odds Minister and Minister of Finance Regus AGAINST THE ODDS: Getting Managers’ Toolbox® Reservations are required for 21 | The Board’s 30-minute time slots show one Board of Trade event for what you want in your toughest Roy Osing, Chief Execu- this complimentary networking negotiations. 7:45 – 9:45 a.m. tive Officer, Brilliance for Busi- a week starting Sundays, 6:30 p.m. (new program); Mondays, 4 a.m; Tuesdays, 3 a.m; Wednesdays, 1 a.m; Thursdays, 3:30 a.m. & 10:30 p.m; event. 5 p.m. – 7 p.m. Regus, 1066 Sutton Place Hotel. Sponsored by ness; Author, BE DiFFERENT or West Hastings Suite 2000. Fridays, 4:30 a.m. & 3:30 p.m; Saturdays, 1:30 p.m.; Sundays 3:30 a.m. Custom House. Event #091217 Be Dead: Your Business Survival (repeat) on Cable Channel 4. Event #091213 Guide Air dates are subject to change. Check schedule at boardoftrade.com. 11 | Members’ Orientation BULLET-PROOF YOUR BUSI- 7 | Special Speaker Are you a new member of NESS: How to thrive and survive Breakfast The Vancouver Board of Trade? in tough times. 7:45 – 9:45 a.m. 21 | Members’ Reception 30 | Spirit of Vancouver® Dr. Heather Munroe-Blum, Princi- Learn how to reap maximum Coast Plaza Hotel & Suites. Spon- Filipino Canadian Mar- Jack Poole, Chairman, pal, McGill; Joy MacPhail, Former benefit from your membership at sored by DDB Canada. keting Group Vancouver Organizing Com- Leader of the BC NDP, Chair of the New Members’ Orientation. Event #091210 Reservations are required for mittee for the 2010 Olympic and this complimentary networking Paralympic Winter Games event. 5 – 7 p.m. Filipino Can- The “Not Always Smooth” adian Marketing Group. Road to 2010. 11:45 a.m. – 2 p.m. Event #091214 Presented in co-operation with Vancouver Organizing Commit- Distinguished Speaker tee for the Olympic and Paralym- 23 | ® Program pic Games. Event #091220 Ian Russell, President and CEO, Investment Industry Association 30 | Business After ™ of Canada Business T U R B U L E N T M A R K E T S Vancouver’s most popular trade DEMAND MAJOR CHANGES. show, presented by The Vancou- 11:45 a.m. – 2 p.m. Sutton Place ver Board of Trade’s Small Busi- Hotel. Sponsored by Investment ness Council. 5 - 7:30 p.m. Hosted Industry Association of Canada. and sponsored by The Fairmont INTRODUCING OUR CUSTOM HOME BUILDING DIVISION Event #091209 Waterfront. British Pacific Homes is the recently renamed home building division of Leadership Skills British Pacific Properties, part of West Vancouver since 1931. The division builds 29 | Bootcamp 2009 May luxury custom homes for private clients on the North Shore and the West Side. If you are considering a custom home, we’d like to show you Luncheon keynote: Irshad Manji, Members’ Reception the advantages of dealing with a well-established, highly experienced Director, Moral Courage Project, 4 | Marquis Wine Cellars builder of exclusive homes.