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The Directors Chair

Gail Cook-Bennett

Been there, pioneered that

In The Directors Chair with David W. Anderson: There are a lot of firsts associated with Gail Cook-Bennetts 16 years
as a chair and 36 years on crown and corporate boards. Adding value as a director, she says, means innovating
Photography by Jeff Kirk

An unlikely convergence of opportunity and expertise opened the boardroom

door for Gail Cook-Bennett in an era when even men her age were typically
deemed too young. Since then, shes played a key role in many corporate and
public sector successes. In 2014, Cook-Bennett began her third chair position, with the Institute of Corporate Directors, having previously chaired the
board at Manulife Financial and been the founding chair of the Canada Pension
Plan Investment Board. Here, in an exclusive conversation with governance
and leadership adviser David W. Anderson, she shares some of her accumulated insights on the role of the chair, the meaning of good governance, and
the importance innovation plays in taking boards above and beyond levels
of standard practice.

Gail Cook-Bennett
Current roles
Chair, Institute of Corporate Directors; Director, Bridgepoint Active Healthcare; Member, Government of Canada Audit
Committee; Member, Salvation Army, National Advisory Board
Former chair of the board
Manulife Financial Corp., Canada Pension Plan Investment Board
Former corporate directorships
TD Bank, Petro-Canada, Enbridge Consumers Gas, Emera Inc., Mackenzie Financial, Transcontinental Inc., Cadillac Fairview Inc.,
Campbell Soup Co. Ltd. (Canada), Manufacturers Life Capital Corp.
Former crown directorships
Bank of Canada, Ontario Teachers Pension Plan, The Stadium Corp. of Ontario Ltd., IDEA Corp., Institute of Hydrogen Systems
Advisory roles
Advisory Committee on Financing (to the federal Minister of Finance); The Trilateral Commission (Canadian Group);
Presidents Advisory Council, Carleton University; Governance Leadership Council, Ontario Hospital Association
Education
PhD (Economics), University of Michigan; BA (Hons) (Economics), Carleton University
Honours
kMember, Order of Canada (2008)
kHonourary doctorates: York University (2009); Carleton University (2004)
kFellow, Institute of Corporate Directors (2000)
kMontreal YWCA Honour for Contribution to Working Women (1977)
kCanadian Diversity Champion by Women of Influence (2012)
kWXN Canadas Most Powerful Women: Top 100 Award (2012, 2011, 2003)
Years of board service
36 years (16 years as chair)

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David W. Anderson You became a director on the boards of

Manulife and Consumers Gas at 37far younger than the men
on those boards. How did that come about?
Gail Cook-Bennett I started my career as a professor of economics
at the University of Toronto, teaching and conducting research.
On moving to the C.D. Howe Institute in Montreal I worked with
Canadian and U.S. CEOs, labour leaders, academics and senior
public servants to understand their respective perspectives on
public policy issues. Two board chairsSyd Jackson of Manulife
and Doug Gibson of Consumers Gaswere participants in our
round tables and subsequently invited me to join their respective
boards in 1978. Ahead of their time, they sought the perspective of
a woman director, encouraged by senior women executives. With
a nudge from a colleague, I accepted an extraordinary opportunity to learn and contribute.
David W. Anderson How would you compare your experience on
boards starting in the 1970s to today?
Gail Cook-Bennett The most important change is that directors
now are more likely to have a deeper knowledge of the business
and the determinants of performance. Directors are expected
to get their arms around complex businesses and contribute to
decision-making. An indication of this change is that directors
are now able to speak intelligently about the business to investor
groups and regulators without the assistance of management.
A second notable change has been in education. In the last decade, formal director education has fast-tracked learning and
helped accelerate the sharing of experience. When I started as a
director, opportunities for formal director education inside and
outside the boardroom were hard to come by and, truth be told,
they werent much sought after or welcome. I had to learn on
the job.
David W. Anderson What lessons did you pick up by observing
other directors that shaped your own work?
Gail Cook-Bennett I learned a few things by watching others,
seeing firsthand what worked and what didnt. First, asking a
question or a series of questions is better than making an assertion when youve got a point to make. Second, how you formulate questions determines the quality of information you get.
Its best to stick to fundamental questions that probe the bigger
picture. For example, a series of detailed questions on a presentation are not as powerful as a contextual question on how
subject matter relates to other parts of business or to strategic
direction. Third, style matters. A whisper inside the boardroom
is like a shout outside the boardroom. Effective directors use a
respectful style that is likely to elicit the best contribution from
management and from each other. Being heavy-handed is not
necessary, as most executives want to engage the board and provide what it requires.
David W. Anderson Youve chaired boards continuously for 16
years and are known for being firm, focused and fair. How do
you approach your role as chair?
Gail Cook-Bennett I believe in the wisdom of the group, so the most
important thing is to get the right people around the table. People
make or break a board; we choose directors for their business-relevant

experience and ability to contribute as part of a team. The second requirement is to harness that knowledge and insight represented at the
table. Its a challenge to steer the board to a common view and foster
cohesion in the face of disagreement. A chair has to listen carefully
to people with different perspectives. Of course, directors are not always right; individual directors can be dead wrong in a disagreement
with management or fellow directors. Yet contrary views respectfully
stated can illuminate bigger truths. The value of a board is found in its
collective judgment. The third important ingredient is agenda setting,
which is used as a tool to manage the boards scarce time. To set the
agenda requires knowledge of the critical issues in order to frame and
foster debates and maintain focus.

A whisper inside the boardroom is like

a shout outside the boardroom. Effective
directors use a respectful style that is
likely to elicit the best contribution from
management and from each other.
Being heavy-handed is not necessary.
David W. Anderson Chairs work hard to find a balance between

showing enough support to the CEO without degrading the

boards oversight interests. How do you manage that tension?
Gail Cook-Bennett The chair navigates carefully between the board
and the CEO. You have to look after the legitimate needs of both without losing objectivity. Just as you need candid, respectful dialogue
with directors, so too with the CEO. Its vital to have that constructive
relationship so that you both are able to say what you think and hear
the others view. Particularly in times of stress, theres a risk that the directors and CEO each sees you taking the others side. That may mean
youre doing just fine, but one must continuously check with both to
make sure you remain fair and open to critique.
David W. Anderson As founding chair of the Canada Pension

Plan Investment Board, you faced initial skepticism that such

a prized entity could remain insulated from political pressure.
How did you succeed in building credibility?
Gail Cook-Bennett A crown corporation competing for investments in the private sector, with what was anticipated to be a
large asset base, presented obvious risks. The federal and provincial finance ministers had the courage to set up an arms length
governance framework that fit the mandate of CPPIB. This would
be essential to the success of the organization. The boards unique
challenge was to operationalize this framework and ensure it
wasnt compromised. In our first year, without staff or investment
track record, we had to create a reputation in the market. We
knew that the key to success would be ensuring our investment
professionals were free to make their judgments without any government pressure. As a board we established a foundational code
of values to guide us and our investment professionals. We had to
make it clear to Canadians and the intermediaries who communicated to them that we were committed to those values. To drive
this home, we championed the establishment of an external con-

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Gail Cook-Bennett

duct review adviser and developed a strong transparency policy

to build trust externally. The board paid close attention and engaged in real problem-solving to be sure our values would become
a differentiator. It wouldnt have worked if management hadnt
bought in. The late John MacNaughton and David Denison, our
CEOs in the early days, were fully committed to living this value
set in the operations.

their governance practices to their companys needs; governance

is not following a rulebook of processes. Best practice is useful
for bringing lagging boards up to standard, but becomes troublesome when its definition interferes with a board applying its own
judgment in context. For those boards that have the potential to
be innovators, lets not crush them with a solution fit for another
circumstance. I think we ought to guard against the tyranny of
best practices.

David W. Anderson CEOs want their boards to provide value as

much as investors do. What must boards do to demonstrate the

value of governance?
Gail Cook-Bennett The hallmark of a deep understanding of governance is the boards ability to organize itself and deal with its
subject matter in a thoughtful, responsible way. This goes beyond
whether you have policy and process; you can pull those off a shelf.
Really good directors do innovative thingsand sometimes cant
talk about them. When youre dealing with the performance of the
organization, you have to recognize the context and have the courage to try novel things. Good board process gives safe harbour, but
my preference is for directors to think about whats really needed.
For example, when I became chair of the board at Manulife near
the beginning of the global financial crisis, we were facing high
director turnover due to age limits. We needed new people and
wanted to get them up to speed before losing the knowledge and
wisdom of those retiring. We chose to significantly increase the
size of the board for a period to create overlap. Although we knew
the larger board size wasnt optimal, and we would be marked
down for it in external rankings, there was a clear rationale. While
we could have remained onside with the rankings by keeping the
board complement low, we would have lost out on the generational
transfer. The right decision trumps slavish adherence to so-called
best practice and ranking criteria.
David W. Anderson Youre intellectually curious and practically

mindeda problem solver by nature. How does your board

leadership reflect this?
Gail Cook-Bennett Im an advocate for innovating, looking at what
we can do better. Im energized by the very problems for which there
are not pre-packaged solutions. Why? Because its there that we can
add the most value. Ive been a part of experimentation with novel
approaches to in camera sessions in an audit committee, committee
structure and succession planning. In each case we fit a solution to the
problem in our context. Sometimes the best answer for one board isnt
generalizable to others.
The complexity increases, moreover, when you factor in the people on those boards. Each board has its own social dynamicwhich
evolves over time and can change markedly as board composition
changes. The particular combination of corporate circumstances and
people dynamics makes every boards options and outlook unique.
Indeed, some approaches that I found productive used by one board
would almost certainly not be suitable for others.
David W. Anderson How do you square innovation with best practice?
Gail Cook-Bennett Each board has a set of corporate circumstanc-

es that distinguishes it from others. Should we not then expect

boards to take different paths, if in fact they try to make the best
decision specific to their organization? Directors ought to tailor

David W. Anderson Pressure to perform in published board rank-

ings doesnt generally encourage innovation, but does it produce better governance?
Gail Cook-Bennett Board rankings have focused attention on some
important issues. People are more aware of constituent parts of governance, but its not the whole story. Youre right to say rankings dont
encourage innovation, but they may move some organizations more
quickly to what Ive called standard practice in basic areas. However,
you have to look at more than one dimension to appreciate the complexity of governance and the effectiveness of a board. What really matters is what goes on around the board table.
David W. Anderson Do we need to update our view on governance

for the future?

Gail Cook-Bennett Yes. Ill offer three related suggestions. First, we
need to avoid becoming too prescriptive, telling others what to do and
diminishing innovation. Governance should be about how we do things
in context to get to the right outcome. Directors should have the freedom to experiment, applying their judgment within context, once the
basic standards are met. Second, directors focus ought to skew to the
strategic and the longer term. Boards really have to fight for time to look
up from the weeds and forward to the future. Time is the scare resource;
if a matter doesnt have high materiality, the board shouldnt talk about
it. Third, and more fundamentally, I think we need to think about the
growing mismatch between expectations for boards and their ability to
deliverno matter who you put around the table. Its not clear to me
how far we can push the current system. Having directors spend more
time and beefing up external resources available to boards are not the
answers. This growing mismatch doesnt absolve directors of their responsibility; we still need directors with deep knowledge.
David W. Anderson After close to four decades of service on
boards, you exude excitement for your work. What is the source
of this wellspring?
Gail Cook-Bennett I find the work of a director fascinating! It combines business issues that are complex and always changing, a
firsthand view of significant domestic and international decisions affecting the machinery of our global economy, and collaboration with
smart, knowledgeable people who are committed to learning and
making a contribution.

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

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

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