Category: Chairman’s Desk

This article was originally published in the Institute of Corporate Directors’ Director Journal in June 2020.

For Canadian organizations, surviving the Covid pandemic will be about more than staying in business. Boards and management must steer an effective response to the harsh realities and social injustices that the global crisis has laid bare, Jaime Watt writes.

In the beginning of Sophocles’ Oedipus Rex, a plague has descended on the kingdom of Thebes that ravages crops, livestock and citizens alike. We find Oedipus, King of Thebes, imploring his subjects to stop praying and instead “act as the crisis demands,” to find a cure. The oracle at Delphi informs Oedipus that the “great pestilence” will only be lifted through an act of justice: The previous king’s murderer must be killed or exiled.

Eventually, Oedipus’s quest for justice — and with it, a cure for the medical, economic and moral devastation of the plague — brings him to the blind prophet Tiresias. Tiresias informs him that Oedipus himself is the killer and that his kingdom was founded on incest and patricide. In the end, the King, no longer blind to his own crimes, gouges out his eyes and stumbles from his palace.

While an imperfect analogy for the challenges of Covid-19, Sophocles’ tragedy bears an important lesson for our time: namely, that pandemics reveal the longest standing, most entrenched and often least visible injustices of our politics and our society. What’s more, no one is immune to these revelations. From dictators and doctors to schoolteachers and presidents, all are doomed if they remain blind to the lessons of our new reality. And that fate extends beyond our halls of government into the C-suite and the boardroom as well.

In short, we all have a role to play in addressing not just Covid-19 but also the underlying issues which it has laid bare. While Canada seems to be successfully emerging from the dreaded “first wave” of the virus, there are nonetheless crucial lessons to be learned from our initial response. But what role exactly should boards and individual directors be expected to play? With the global economy on pause since March, how can directors carve out a place in the response, beyond simply battening down the hatches and working to keep their organizations afloat?

Responding, not controlling

In my view, the fundamental tenet of effective leadership in crisis is a recognition that the popular term “crisis management” is a misnomer, and a damaging one at that. The more productive expression to use is “crisis response.” That’s because, with all the unexpected variables at play, a reactive, responsive stance is more suitable than a “management” approach, which assumes a level of foresight and control that is simply untenable.

The reality is that most crises are made up of far too many unpredictable factors to be managed effectively. And preparing to respond effectively to those “unknown unknowns”— the variables you can’t even know you don’t know — will make or break your leadership in a crisis.

Consider Covid-19. Of course, government and, to a certain extent, business leaders, could and should have anticipated some form of pandemic. But the most critical result of Covid-19 has not been the virus itself — though it has already claimed hundreds of thousands of lives around the world and threatens many more — but rather its accompanying domino effect of unanticipated consequences.

The response to this pandemic has decimated many people’s already crippled confidence in international bodies such as the United Nations and the World Health Organization. In turn, what should be a global response to an international crisis has instead been characterised by parochial self-interest and infighting between China and the United States. As a result, countries like Canada have been left to fend for themselves in a global free-for-all over essential supplies. It is these kinds of issues — unpredictable in the specific but generally based on observable patterns — that leaders must make room for in their approach to crisis response.

New imperatives

Another of these domino pieces and arguably the most important factor for shaping our world post-Covid, is the moral jeopardy it has created. Moral jeopardy, a cousin of reputational jeopardy, comes about when your issue or brand is swept up in a larger societal narrative. The corporate world is full of examples, from airlines caught mistreating passengers to the #MeToo movement. Moral jeopardy is challenging because of the emotional intensity that comes with it and because once your name is attached to a larger story, you have lost control of your narrative.

Covid-19 is rife with moral jeopardy. Business owners have to weigh the burden of closing stores, offices, restaurants and factories, against the risk of exposure for employees who return to work. Policymakers cannot forget that the public health benefits of economic shutdown come with a material toll on the well-being of our most vulnerable citizens. Moral jeopardy exists for well-meaning organizations using their profile to comment on social issues exacerbated by the crisis just as it exists for those organizations that choose not to comment. We are now navigating a minefield of moral jeopardy with massive consequences for business.

I have always said that times of crisis are when directors really earn their keep. That’s because directors are the ultimate inside-outsider: They often have the enterprise-wide knowledge of senior executives without being “too close” to make difficult calls. Directors also bring outside experience which can be hugely important when making decisions with incomplete data.

Before a crisis hits, the role of the director is really to ensure that the organization has a crisis response plan in place. In the thick of it, directors are responsible for monitoring management’s response and must be prepared to take over if management is part of the problem. And when the crisis is over, it is incumbent on directors to ensure the integrity and efficacy of post-mortem evaluations.

We all realize that events of the past few months have turned our world on its head. In the wake of Covid-19, organizations will either stay fixed in their ways or adapt to the demands of our new reality. That means changes to operations as well as a re-evaluation of fundamental principles and a renewed commitment to fulfilling them. Implementing these changes will take the combined efforts of management and directors, in concert with internal stakeholders and external audiences.

In the months ahead, mistakes will be made and real prices will be paid for those mistakes. Crisis response provides an effective tool kit and a productive mindset for organizations and government alike to successfully weather the storm. But more often than not, a boardroom with purpose, clarity of vision and competent directors at the helm will equip its organization well for success in our brave new world.

This article was originally published in the Toronto Star on June 14, 2020.

Though it now seems easy to forget, we remain locked in a battle with the novel coronavirus. It has been 93 days since the World Health Organization declared COVID-19 a pandemic; a declaration that brought with it unprecedented restrictions on our liberties and to our livelihoods.

That we all willingly obeyed those orders is a notion fundamental to a democratic society: the consent of the citizen to submit to the authority of the government.

But the mass protests of past weeks have shown a fraying of this social contract, Prompted by an angry outcry to a long simmering wrong, the Black Lives Matter movement has caught on where the anti-lockdown movement has fizzled out.

The BLM protests are, as I wrote here last week, justified and long overdue and the anti-quarantine movement was never more than a radical fringe. But the outcome and the dangers, vis-à-vis the coronavirus, are much the same.

While it is dangerous to confuse the real medical risk of these protests with their ideological or political value, we have seen public health authorities trip over themselves to somehow sanction them. They seem suddenly desperate to inoculate themselves against the criticism that it remains irresponsible to gather in large groups, even outdoors, even in a mask.

It was just a month ago that irresponsibility was the charge levelled against those who protested the COVID-19 lockdowns. It was only two weeks ago that health and political authorities alike were condemning youth in Trinity Bellwoods park, going so far as to label them reckless and selfish.

But governments have now run into a brick wall when it comes to public compliance. Terrified of losing their moral authority to govern, their power of moral suasion, the tail is, once again, wagging the dog with public health authorities repeatedly contorting themselves or playing catch-up to shifts of opinion and behaviour among the public.

As the social contract frays, the more pronounced this phenomenon becomes, and the more the authority of government will erode.

Public health authorities can issue endless reminders about best practices but now that every leader from the prime minister on down has participated in a mass gathering, the government’s dissuasive power against gathering in large groups has melted like a popsicle in the summer sun.

This fraying will only get worse, I predict. Whether it is because of the warm weather, general quarantine fatigue after three long months, deteriorating mental or financial health, people are simply ceasing to do what the government asks.

And why should they? It is not as if our leaders have modelled good behaviour. If others are not willing to follow the basic rules of the social contract, it is rather easy to understand those who choose to abandon quarantine to join a growing popular protest movement. After all, condemning untold instances of appalling police brutality seems to many a reasonable and necessary thing to do.

Public health authorities like Dr. Anthony Fauci are, of course, of a different view. Fauci sternly warned this week that the protests are the “perfect setup” for spreading the virus. The challenge for governments is that it will take a couple of weeks to see if he is right. And while we wait, it will be difficult for authorities to convince the public that the risk is real when Toronto public health authorities recently quietly confirmed that we saw no such spike after the gathering in Bellwoods.

And so, it is becoming clear that we have collectively decided that, regardless of what we are told, we are done with COVID-19.

But the virus is not done with us — far from it.

And therein lies the challenge facing those who lead our democracy.

What happens when the people decide they have had enough? What happens when the people decide that they will no longer blindly, unquestioningly accept your instructions? What happens when science and instinct and experience leads you in one direction and the people lead you in another?

Those are questions that will preoccupy our leaders through the doldrums of summer. And their answers will live on much longer in the health of our nation and the political fortunes of their parties.

This article was originally published in the Toronto Star on June 7, 2020.

In January 1909, a group of notable Americans signed their names to a statement that called for a national conference focused on the civil and political rights of Black Americans. The “Call” was signed by the likes of W.E.B. Dubois and Ida B. Wells, and it contended that the upcoming centenary of Abraham Lincoln’s birth should be a day of “taking stock of the nation’s progress since 1865.”

“How far has [the nation] lived up to the obligations imposed upon it by the Emancipation Proclamation? How far has it gone in assuring to each and every citizen, irrespective of color, the equality of opportunity and equality before the law, which underlie our American institutions and are guaranteed by the Constitution?” asked the letter.

The unfortunate answer, affirmed over a century later by the voices of thousands of Americans this past week, is clear: nowhere near far enough.

Many signatories of the “Call” would go on to form the NAACP, officially established just a few weeks later. In its 111-year history, the NAACP evolved from a relatively small association focused on litigation against Jim Crow laws, into a national organization with half a million members and tangible political power.

Like many civil rights organizations, it was born from emotion, specifically anger, frustration and disappointment in the deferred promise of 1865 (the passage of the 13th amendment). But over the years, civil rights leaders like Dubois and Wells channelled that emotion into positive action, without which the United States would be less free, less equal and less just a society than it is today.

As protests spread this week across the United States and here at home — protests that have jolted so many of us out of our privileged complacency — it’s important to remember the legacy of civil rights organizations and their roots in protest.

The simple fact is that direct action works: from the civil rights movement of the mid-twentieth century to the Stonewall riots and the origins of Pride, protest and civil unrest has long served as a catalyst for important change. The protests surrounding the murder of George Floyd at the hands of Minneapolis police are no different.

Consider just how much the Black Lives Matter movement has evolved since its inception in 2013. What began as a hashtag has grown into an international phenomenon, the animating spirit of the largest protests seen in nearly 50 years. While its actions were once the subject of controversy, corporations and brands now eagerly endorse their message.

Along the way, Black Lives Matter has remained steadfastly committed to its roots as a protest movement. Local chapters of the movement have now, for seven years, led protests in response to far too many deaths, all too similar to George Floyd’s. With each action, the loose network envisioned by the movement’s founders has grown stronger.

The natural question to ask next is what happens to the Black Lives Matter movement from here? Perhaps the movement will go the way of Pride: corporatized and mainstream, far now from its roots in protest. Like Pride, victory here may not ultimately mean a set of policy changes, so much as a shifting of the Overton window — a victory of the public sense of what’s possible and expected.

But regardless of where the movement ultimately goes, this is coming to a head. We are experiencing a once-in-a-generation paroxysm about the health and safety of Black communities, prompted by both the coronavirus and the latest instances of police brutality.

It is not my place to say what the demands of the protestors should be or what shape the movement should take next, but I feel it would be a tragedy to move away from the basis of the movement in protest.

After all, we have seen, again and again, how the courage and leadership of organizers and protestors alike have sustained the movement through years of growth.

That said, any meaningful, sustainable change that comes next will depend on all of us — how our expectations, our behaviour and our attitudes evolve. And that means, first and foremost, looking inward and addressing, in the words of James Baldwin, the “many things we do not wish to know about ourselves.”

This article was originally published in the Toronto Star on May 31, 2020.

When it comes to China, the Trudeau government has acted with the deference a pageboy would show a queen. As they have muddled through a long series of skirmishes, from the arbitrary and unjust kidnapping of Michael Kovrig and Michael Spavor to the trade disputes over canola, soybeans and meat, the objections of the federal government have been muted and overly diplomatic.

For a time, it seemed the COVID-19 pandemic would be no different. The well-substantiated suggestion that China had been less than forthcoming in its disclosures about the virus was dismissed by the federal health minister as a “conspiracy theory.” The minister of foreign affairs twisted himself into a pretzel to avoid even saying the word “Taiwan.” We refused to close our border to flights originating from China. And this week, as Beijing snuffed out the last remnants of the One Country, Two Systems agreement that protected civil liberties in Hong Kong, the most Trudeau could muster was a call for “constructive” dialogue.

But, thankfully, a bright light has appeared on the horizon: plucked from the private sector and appointed Canadian ambassador to China last September, Dominic Barton has gone further than any other Canadian official in criticizing Beijing.

Last week, Barton was in the news for his comments to the Canadian International Council during which he suggested Beijing had accrued “negative soft power” through its belligerent international response to the COVID-19 pandemic, and endorsed a “rigorous review” of the WHO’s response.

By the standard of the Trudeau government, this amounted to surprisingly pointed criticism. More surprising still was the prime minister’s endorsement of this criticism the day after it was reported publicly.

Some had early concerns with Barton, who was appointed to the ambassadorship fresh off his stint as the managing director of the consulting firm McKinsey.

But Barton was a savvy choice. An experienced China hand, and a principled realist, he now uses the qualities that enabled him to succeed brilliantly in business to drive his candid commentary about China.

It is helpful that his concerns are real. In bungling its so-called Mask Diplomacy, China has, indeed, eroded its soft power and further alienated foreign governments. The Netherlands was forced to recall 600,000 faulty masks bought from China; in Spain, 50,000 test kits were tossed out after it was discovered they were only accurate about one-in-three times. The Slovenians bought 1.2 million antibody tests for $16 million dollars, only to discover they were similarly useless. The Czechs have had complaints, and so have the Turks. And, of course, Canada too. The list goes on.

Continue reading on thestar.com.

This article was originally published in the Toronto Star on May 24, 2020.

Of all the inequalities laid bare by the COVID-19 pandemic, there is none more glaring than the profoundly unequal effect it has had on the lives of women.

The impacts are felt everywhere. Primary caregivers have been forced to balance their professional and personal lives like never before, as children stay home from school and work comes home. The psychological and financial pressures of the pandemic have exacerbated the conditions for domestic violence, which impacts Canadian women at a disproportionate rate. Most workers in Canadian long-term care facilities — a group uniquely vulnerable to the spread of COVID-19 — are women.

But the fact is, these issues did not arrive with COVID-19 nor will they disappear with a vaccine.

First, the role of women at home. As we look ahead to the reopening of our economy, the wildly unequal division of labour in most households, along with the expected phased nature of reopening, will pose additional challenges for women seeking to return to work.

While some daycares in Ontario have reopened, schools and camps will be closed until the fall. How can we expect parents to return to work without any feasible options for child care?

Second, in public health terms, women face a crisis with unequal repercussions. Over 50 per cent of Canada’s COVID-19 cases and deaths are women, making us an exception among nations where the prevailing trend is one of majority-male cases. The apparent reasons are that Canadian women live longer than men and many high-risk jobs (like long-term care work) are done by women. But the trend is disturbing nonetheless.

And third, there is the troublingly unequal economic impact for women. Unlike previous recessions that have mostly impacted goods-producing sectors, COVID-19’s devastation has been largely focused on the service economy.

In the 2008/2009 recession, widespread hits to manufacturing and construction meant that a male workforce bore the brunt of the downturn. But, this time out, rather than job sites and warehouses, it is hospitality and retail that are hurting most. As a result, the majority of jobs lost due to COVID-19, in both Canada and the United States, have been held by women. From mid-February to mid-March, nearly 62 per cent of Canadian job losses were experienced by women.

But those numbers hide an even more significant challenge. Many of those women were let go earlier than their male counterparts and their return to the workplace will be a more significant uphill battle.

It’s now clear that what we face in 2020 is not simply a recession but a “she-cession”; one that will impact the economic life of women in a very unequal way.

So what does this mean? It means our governments need to ditch the playbook they used in 2008/2009 and create one that responds to the needs of this particular crisis.

And they have begun to do just that. So far, Trudeau and his cabinet have shown a promising commitment to addressing some of the issues facing women across Canada: $50 million has been provided for services that support women, children and victims of assault and last week; Minister Mary Ng announced a $15 million investment to help female business owners through the pandemic. The augmented Canada Child Benefit announced by the prime minister this week is another step in the right direction.

But compare this to more than $280-billion in overall COVID-19 relief and the case is made that much, much more is needed.

And there are other considerations. Rather than simply focusing on social supports and targeted pandemic spending, the Trudeau government must take a holistic approach that considers the role of women in our wider economic recovery. That means proper tools to track and analyze the unique impact of this crisis along gender lines as well as innovative options for bolstering our service economy to ensure that unemployment trends no longer impact female earners so profoundly. It also means a genuine commitment to tackle the gender inequalities that predate COVID-19 but have been exacerbated by the pandemic.

Getting this right — resolving our systematic challenges as well as our temporal ones — will allow us to come out of this crisis as a stronger, more caring and more successful country.