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Board Governance Best Practices and Stories/Experiences Shared
Gary Mar: [00:00:03] It’s a reciprocal obligation to provide to your board what you believe are the best strategies to move forward, but it’s also your board’s responsibility to bring in their body of experience to instruct the CEO so it really goes both ways. If you’ve got a good board, there should be no fear at all of the exchange of ideas and instruction.
Munir Haque: [00:00:27] Hello everyone, and welcome to another episode of The Boardroom 180 Podcast. I'm your host Munir Haque, an executive coach and senior board strategist. I have partnered with Action Edge Executive Development to lead their governance and political acumen division. In each episode, we meet with governance leaders and step into their boardrooms where decisions shape the world around us. We'll hear the good, the bad and the ugly, but with a keen focus on where the gaps are, discover emerging best practices and real world tools to better evaluate, guide and grow you and your boards.
Munir Haque: [00:00:58] Welcome to The Boardroom 180 Podcast. Today we'll be speaking with Gary Mar. Gary is the president and CEO of Canada West Foundation, he's been that since 2020. He's an accomplished and respected leader with the deep knowledge of government and business and expertise in key policy areas of resources, environment and economy, skills, innovation and productivity, trade and trade infrastructure. Previously, Gary served as president and CEO of the Petroleum Services Association of Canada, the national trade association representing the service, supply and manufacturing sector within the upstream petroleum industry. Gary has broad expertise in government, having served as a member of the Legislative Assembly for the Province of Alberta from 1993 to 2007, so about 14 years. During this time, Gary held several cabinet portfolios including community development, health and wellness, education, environment, and international and intergovernmental relations. Gary has also served as the official representative or the Minister Counselor of Alberta at the Canadian Embassy in Washington, DC, and as a Province of Alberta's representative in Asia from 2011 to 2015. After leaving government, Gary was an independent consultant, working with both Chinese and Canadian companies seeking assistance with trans pacific trade and investment. In 2016, he co-founded Canadian Advantage Petroleum Corporation, which successfully purchased heavy oil in Alberta and sold it directly to refineries in China. In 2022, Gary was appointed as a member of the chair of the Council of Alberta Order of Excellence, and was also awarded the Queen Elizabeth II Platinum Jubilee Medal for public service. Welcome to the podcast there, Gary. Thanks for making the time to be with us today.
Gary Mar: [00:02:47] It's my pleasure to be here, Munir. Thank you for having me.
Munir Haque: [00:02:50] We were challenged to find time with you. I think, when I first reached out to you, you were on a trip overseas, and so we had to wait for you to get back. But it sounds like you're a very popular guy. The mutual acquaintance that we have that had recommended you for this show, he said that anywhere he goes, you can't go to McDonald's with Gary and not have everybody stop and try to have a conversation with him. A couple weeks back, I ran into an old university colleague at the Global Energy Show here in Calgary, and I hadn't seen him for 14 years. I was mentioning people I was trying to get on the show, and I told him about you. And of course, he had a Gary Mar story. Talked about one time, he was heading to the airport, and he found somebody stranded on the side of the road, their car broken down or something. So he thought, well, I'll pick him up, give him a ride to the airport, and that was you. And he says that you guys stay in contact till this day. I'm not originally from Alberta, but I think people who are and have spent a lot of time here know who you are.
Gary Mar: [00:03:55] I've had a very lucky life that has been filled with experiences of going places, doing things, and meeting people that were beyond my wildest dreams when I was a kid growing up here in Calgary. It's been an amazing personal and professional life that I've had.
Munir Haque: [00:04:12] Maybe we should start a little bit with, what is the Canada West Foundation? And when I reached out to you and you were overseas, what were you doing there?
Gary Mar: [00:04:22] The Canada West Foundation is one of the oldest and most respected public policy think tanks in Canada. It's been around since 1971, so north of 50 years. At the time that it was started, there was perhaps ten think tanks in Canada and now there's a galaxy of them from coast to coast. And what a think tank does, is it does research into matters of public policy. And in our case, we focus on public policy that benefits the economic growth of the four western provinces. There's no other think tank that works on that. And the areas that we spend our time researching are trade and trade investment, trade attraction. We think about trade agreements. We also think about human resources, human capital. If you're going to grow a business, how do you make sure that you've got the right kind of people that can do the work that you want to do? How do we make sure that people who come to Canada or come to Western Canada can have their credentials and their skills and competencies evaluated so they can participate fully in the business life of four western provinces.
Gary Mar: [00:05:41] And finally, we think about natural resources in all kinds of ways. Increasingly, we are engaged in areas relating to how it is that we get big things accomplished, like the Trans Mountain pipeline expansion. How do we get LNG Canada expanded? What do we need to do to make sure that our permitting process works or our trade infrastructure? So thinking about it broadly, think about this. Two thirds of Canada's GDP relies on trade, and about roughly three quarters of our trade is with the United States. Now, in the case of the western provinces, those numbers are even bigger. We are very trade dependent for our economy. So we think about things like trade infrastructure and if you can't move it, you can't sell it. So we think deeply about what are the kinds of policies that you need to improve your rail, your airports, your roads, your bridges, your pipelines. How do you get what you make, what you produce from where it is to markets in the United States or elsewhere in the world?
Munir Haque: [00:06:54] I talked about it in the introduction, a bit about your career history, but why don't you maybe walk us through a little bit of your career arc and talk a little bit about how that has influenced your approach to governance and business governance?
Gary Mar: [00:07:08] So I started out here in Calgary in 1980, entered university. I took geology, and I found it fascinating, I loved it. I spent a summer in 1981 working in a field crew in the high Arctic islands. I lived in a tent for four months, and I traveled to a part of the country that very, very few people have ever seen. The high Arctic places like Ellesmere Island or places like Baffin Island. It was an extraordinary experience. But then the National Energy Program came in and the jobs available to geologists really seemed to dry up. So I switched over to business, and I did a degree in finance and then went on to law school. And so I practiced law here in Calgary until I was 30, and I got elected at the age of 30 back in 1993. And two weeks after getting elected, I was appointed the rookie Minister of Community Development, and from there went through a number of other portfolios, as you've already mentioned. And then in 2007, Premier Stelmach asked if I would be his representative at the Canadian Embassy in Washington, DC. This was the first such subnational government that had a diplomatic representation in the United States, but other provinces have followed suit. This has been very good as we think about the importance of these relationships between our premiers and governors in the United States and our MLAs and state assemblymen or state legislators in the US.
Gary Mar: [00:08:50] Then after that, in 2011, I was appointed to be Alberta's representative in Asia. I was based in China and at the time the Alberta government had offices in Beijing, Shanghai, Singapore, Guangzhou, Hong Kong, Seoul, Tokyo and Taipei. And so that was my neighborhood, and I was responsible for those offices, it's a big neighborhood. If you think about Hong Kong, for example, it's a five hour plane ride from half the world's population. So a pretty strategic place to be located. And at that time the job was about trade attraction. And in those four years, from 2011 to 2015, we attracted roughly $30 billion in investment, largely from China, in the energy sector here in the province of Alberta. And then after that, I did some consulting. I tried to figure out how to make a career out of what I'd learned in government because I spent 22 years there, and I did well in the trade between Western Canada and China, working with partners on both sides. And then I became the head of a national trade association that had members from coast to coast. And it was fantastic working at a trade association, getting to know people from all over Canada was an extraordinary experience and really presenting to governments those kinds of policies, which would make sense for the development of the energy sector in Canada.
Gary Mar: [00:10:31] And then I was given the opportunity to, just over four years ago, four and a half years ago, head up the Canada West Foundation. And it's been fantastic. We do great work that has had measurable impact on what governments have done in terms of public policy. In terms of governance and leadership, there's lots of experiences that I could relate, but I would say that, with respect to governance, it's really important to have a great board and I've been lucky to have remarkable people on my board that understand that governance is about keeping your nose in and your fingers out. I want board members that are engaged, that provide advice, that provide strategic direction, but themselves are not running the business. And sometimes that's challenging because you get really good board members and maybe they come from the private sector, they're perhaps CEOs themselves. It's important to separate your role as a CEO from that of being a board member. And I'm fortunate to have that kind of a board today. In terms of leadership, there's lots of stories I could tell you about leadership. Let me give you this example.
Gary Mar: [00:11:50] When Gordon Campbell first was elected and became premier of the Province of British Columbia, Ralph Klein suggested we should have a joint cabinet meeting. And so we did. And he suggested that we do it in British Columbia so we're at Prince Rupert. And it wasn't a full cabinet, it was maybe eight a side. Premier Campbell was the host, he was the chair of the meeting. So he was going through the agenda and he said, okay, we're going to have our Minister of Forestry, Mike de Jong, talk about what we're doing for Mountain Pine Beetle. Take it away, Mike. And Mike went to a PowerPoint, and he started going through the slides, and Gord stopped him and he said, hold it right there. Hold it right there, I'll finish it. So he finished the slide deck, he clearly knew this file as well as his minister did. So when he resumes his role as chair, he says, we're now going to have the Honorable David Coates, Minister of Forestry from Alberta, talk about what they're doing with Mountain Pine Beetle. And Ralph Klein leaned back in his chair and he said, yeah, Dave, what are we doing? I guess the point is, is that leadership comes in many different styles and recognizing what your strengths are and what your weaknesses are. There's no one style of leadership that's successful. I would argue that both premiers Klein and Campbell were both successful, but with completely different styles of how you manage issues.
Munir Haque: [00:13:13] Thanks for that. I just want to maybe talk a little bit about the transition from government to the other organizations that you worked with. I know that government governance is kind of steeped in tradition and policy. Some might say a little bit of red tape. How did that benefit you as you moved more into industry? And is there a stark difference?
Gary Mar: [00:13:40] So there is some differences and some similarities, but I'd say this: by the time you get to a board, or in my case of experience, a cabinet meeting, you're there to make decisions. You're not there to rehash or relitigate issues that have come up through the process. The way Ralph Klein ran a cabinet meeting, it was, okay, this has been through our standing policy committee. This has gone through an approval process with the Standing Policy Committee. We're here at cabinet making a decision, are you agreed? And bang, hammer goes down, we make a decision and we go forward with it. Only rarely did we reexamine a decision that had already been made by our standing policy committees or by our caucus, and that was a valuable insight for me as to the way that things should work in the private sector as well, that you get a lot of people that work on your staff to prepare their executive councils, their vice presidents, their executive directors and ultimately their CEO. They spend their time, their money, their effort, thinking about those things and bringing something to a board. And then a CEO presents it to the board. And a board should be there to be making decisions, not relitigating issues that have been worked on by staff and by management. So, in my view, that's the way a good board operates and I'm happy to say that I have such a board today and I'm happy about that.
Munir Haque: [00:15:24] I think there's a certain level of trust that has to be earned or expected when you're going through that process, that you trust your management to be able to provide you good information or that they've done their due diligence.
Gary Mar: [00:15:37] Well, I think that's right. And I think it goes to hiring the right people too, I mean, at my organization, the hiring criteria is pretty simple. One, you got to be smart, and two, you can't be a jerk. Because if you're smart, we can train you to the skills that you need to be able to work in our organization and really contribute to the success of the organization. So that's why being smart is important. Lots of leaders talk about, well, we just need to motivate. And I'd argue, well, if you've got an idiot, then now you've got a motivated idiot. That's even worse. The second criterion is you can't be a jerk, because if you're a jerk, I can't train you out of that, or I don't want to make the effort to do it. So the work environment does require trust, does require people that come to the table that provide their best information, their best research and they don't have egos. People can speak freely and candidly, but we trust each other to have each other's backs. So the hiring process in an organization I think is really important. So be smart, and don't be a jerk.
Munir Haque: [00:16:52] I've always said that there's no perfect fit for any position. But if you can find somebody who is open minded, flexible and can think themselves out of a problem. Maybe not find the solution, but know where to go search for the solution and can trust other people to think themselves out of a problem as well. You can't be an expert in everything is kind of my take on it. But you're right, you have to surround yourself with the right people and develop that trust for them.
Gary Mar: [00:17:24] I was in the hospital a couple of years ago for some surgery, and my roommate was a very interesting guy. He suggested there was a book to read, and it's called Turn the Ship Around. I'd recommend that as a great book on leadership. Written by the captain of the USS Santa Fe, which is a nuclear submarine. It's a great book on making sure that you train people. The captain of a nuclear submarine needs to know everything about the engine room. He needs to know about the nav system. He needs to know how the weapon systems operate. But he can't know as much as the people that are responsible for those areas. And so the captain really does know a lot about everything in the boat, but he cannot know everything. And so it's about training people to make sure that they're the very best WEPS officer that you can have, or the very best engine engineer that you can have and trusting them and then giving them a clear task to complete and letting your best trained people do that. So investment in the people, in the training up front, is what makes leadership go a lot easier.
Munir Haque: [00:18:46] I'm going to go back, revisit a little bit of your career arch. I know during our pre-interview, in my notes, I've got a couple of interesting comments that you made, and it's very relevant to today's world headlines. Donald Trump, he's had an influence on you. Why don't you tell us about Donald Trump pro wrestling and British Bulldogs?
Gary Mar: [00:19:13] As a young person, I was a big fan of Stampede Wrestling, which Calgarians would know was a pretty important part of Friday night entertainment at the Victoria Pavilion. Pro wrestling is interesting. Many people don't realize that Vince McMahon was the president of Stampede Wrestling back in the early 1980s, and that was his inspiration for starting WWF World Wrestling Federation, later renaming itself WWE World Wrestling Entertainment. And as a young lawyer, I got to meet the British Bulldogs and do some work for them. And this interest in pro wrestling that I had, I took it with me as I was a representative in Washington, DC, and I learned more about it. And in 2016, I was interviewed on live television and was asked, would you like to evaluate the chances of the 16 candidates seeking the presidential nomination in the Republican National Committee? And of course, Donald Trump was one of the 16 people seeking that nomination. I talked about pro wrestling, and I could tell that the interviewer was a little uncomfortable. And I said, please bear with me, and let me say this. Donald Trump was inducted in the Professional Wrestling Hall of Fame in 2011 for his participation in something called the Battle of the Billionaires, where he and Vince McMahon agreed to be represented by a gladiator that would represent them in the ring. I invite people on your podcast to actually go to Battle of the Billionaires on YouTube.
Gary Mar: [00:20:57] What you'll see is that, these two guys had agreed that the loser had to have his head shaved by the winner. And this is great theater. And so in the fight, the battle of the billionaires, Trump's fighter is losing badly, and Vince McMahon is seen dancing around the outside of the ring with an electric razor, getting ready to shave Mr. Trump's head. Trump bull rushes him, knocks McMahon down, gives him the business. And now Vince McMahon is lying in a semi-comatose state lying outside the ring. Meanwhile, out of the audience comes a guy. It's Stone Cold Steve Austin. He rips off his shirt, he's got a referee's jersey on underneath. He rolls into the ring. He conks the referee, who is now in a twilight state of consciousness and seeing stars, and he helps Trump's fighter take down McMahon's fighter. And because he's got the referee's jersey on, he counts them one, two, three, you're out. So Trump wins, and if you keep watching the video, you'll see that Donald Trump shaves Vince McMahon's head. And I tell that story because Donald Trump has learned every lesson from professional wrestling and applied it to politics in a way that we'd never seen prior to his entry into the race in 2016. And in pro wrestling, you have a narrative you're either a hero or you're a heel.
Gary Mar: [00:22:27] And if you're a hero, it sounds like this: America is not great, but it's not your fault. It's the fault of immigrants and the Chinese, and it's the fault of Mexicans. If you're a hero, you will tolerate my lying, my cheating, my boastfulness. Charisma has nothing to do with my heroism if I'm your guy. In pro wrestling, we demean our opponents and we give them nicknames. And it sounds like Lying Ted or Crooked Hillary or Little Marco. And in pro wrestling, you whip up your audience, usually with phrases that are three, maybe four words long. And it sounded like this. Lock her up, build a wall, make America great. So I had assessed in 2016, I said, I think Mr. Trump perhaps can win the nomination for presidential candidate from the RNC, but I don't think that he can win a general election. I just don't think there are that many people that want to take that on as their president. So I was half right, and I was half wrong. But note that in the Republican National Convention held earlier this month, that who was there? Hulk Hogan was there ripping off his shirt in typical Hulkamania fashion and revealing a Trump/Vince t-shirt underneath. I think the more I see, the more I think that my pro wrestling is now part of politics is a demonstrably correct direction that politics is sometimes going. I don't comment on whether it's good or bad. It just is what it is.
Gary Mar: [00:24:20] So that's what I've learned about Donald Trump. He is performative, remarkably performative. Does it yield good public policy? Some of his policy during his tenure was good, but I think the issue will now be tested as to whether or not American voters continue to support him.
Munir Haque: [00:24:41] Thanks for the commentary on that. It makes a lot of sense. At the time, I probably had heard about the battle of the billionaires, but it had completely slipped my mind. And that kind of makes sense now, full circle, Hulk Hogan at the RNC. I guess that pulls it all together. I thank you for the commentary. I'm assuming the podcast will air prior to the election so we'll see how that all pans out. And I know that when I was going through the questions on this, I had sprinkled that question about Trump in a number of different places.
Gary Mar: [00:25:22] I mean, there's many spots where we could talk about it. So, for example, in 2026, there's going to be a review of the Canada-U.S. Free Trade Agreement. The interesting thing for Canadian policy makers and for those who are diplomats in the United States is, how do we thread this needle? Because this was an agreement that we signed with President Trump, but then Senator Kamala Harris actually voted against it. She was one of ten US senators that voted against the adoption of this trade agreement, which is so important to Canada. And so what Canada does, in order to make sure that this important trade relationship is not diminished, is they're going to have to figure out a strategy that works for whoever becomes the head of the White House, whoever controls the Senate or the House of Representatives. There are 435 members of Congress, 100 US senators. So how we engage with those 535 people, plus whoever's in the White House will be critically important to Canada because, as I said, we're so trade dependent, and particularly in Western Canada, trade dependent. This will be, in my view, this is the most important relationship that we have with any country in the world is with the US. We have to, in some ways, change our language about how we talk about our relationship with the US. I think that in Western Canada we've often said, well, we're your number one supplier of oil to the United States. But if you listen to J.D. Vance at the RNC, the vice presidential candidate for the Republican Party says, I want to create jobs.
Gary Mar: [00:27:16] Ohio is the seventh largest producer of oil in the United States. I don't think he wants to hear that all of his oil is coming from Canada. Instead, we should be saying we create jobs in the United States, and we export them through a pipeline because there's a refinery in Lima, Ohio, and there's insufficient supply of oil from Ohio to keep that refinery running. There's insufficient oil in the marathon refinery in Detroit to keep that refinery running. There's insufficient oil in Colorado to keep the refinery in Denver running. And so we export those jobs through a pipeline so that you create good jobs in the United States. And that's true of natural gas as well. We send natural gas to the United States, it gets liquefied there and sent to foreign markets. So not only do they use it, they also upgrade it and send it off to other places. So we've got a compelling argument to make to the United States that it will be important that we maintain our trade agreements as it relates to energy, which creates jobs in the United States. And more recently, we've also seen that when the premiers of Canada have gathered, they've talked about the need for Canada to up its defense spending. You've had Premier Canoe of Manitoba say, we'd like to see the Canadian government go spend more money, because that's a really important part of our relationship with the United States, that everything in the United States is focused around security. So for us, we need to make sure that the Canadian border is not viewed as being a broken back door through which people can come into the US. So we need to up our game on defense, and there is, in my view, a very strong argument to be made that our economy depends upon it.
Munir Haque: [00:29:13] As we move into 2026 and the free trade agreement, is that something that you and the Canada West Foundation will be steeped heavily into, in working with the feds on?
Gary Mar: [00:29:26] It's really important, and it's not just the feds. It's about engaging Canadian businesses and CEOs. It's about the provinces being on board. It's about making sure that we deploy our money correctly. The federal government wouldn't think twice about dropping $20 or $30 billion on electric battery plants, while at the same time is incapable of raising sufficient money to make sure that we're able to actually defend the Arctic and protect our sovereignty while Russian ships and Chinese ships are sailing through the Northwest Passage. I think it's critically important that Canadians appreciate and understand that we live in a different world than we did, say, even 30 years ago, where three great oceans and the longest undefended border in the world were sufficient to ensure that we didn't really have to have military preparedness. In fact, the world is very different. And there are some things that we would be very, very good at where we're able to apply our money to it. But the outgoing chief of staff, the defense chief of staff, General Eyre, who's really a remarkable and estimable individual says, we do not have preparedness. We don't have the ability to defend ourselves in the event that we need to. We don't have the ability to patrol our Arctic. And we have a procurement process that is broken. And we can't even recruit people properly. I had read something that 70,000 people had applied to jobs in response to the call by the Canadian Armed Forces, and they've only been able to process 1000 of 70,000 people. That tells me that putting more money into a system that's broken might not be the most prudent. Putting money into a process that's workable actually makes sense. And so we've got plenty of work to do, with respect to what our public policy is as it relates to defense, and making the case that is very much part and parcel with what happens with the economy as well.
Munir Haque: [00:31:37] Thanks for that. This being Alberta, and really wanted to talk to or find a guest that had some knowledge of natural resources, especially when it comes to governance and how those boards work, and do they face different challenges and, say, other associated businesses like technology governance. Are there things that are unique to natural resources from a board perspective?
Gary Mar: [00:32:06] It's a good question, but I'm not sure that I've got the right answer for you. I mean, I've seen there are some exceptional companies that come from Alberta that are in the natural resources sector, but I don't have anything to compare it to, with respect to those outside of the oil and gas sector. I would say that, again, you want boards, generally speaking, that have their noses in and their fingers out. That's how good boards operate and I've seen lots of examples of that here in the province of Alberta. But my most significant exposure is to the natural resources sector, but I have a hard time commenting on how other sectors, how it would differ because I just don't have that experience.
Munir Haque: [00:32:49] Fair enough. And you've talked about this, a little bit about how boards should operate. Is there anything you can say about board composition? What kind of personalities, what kind of skill set typically would you need on a board? And then maybe a bit more discussion about the relationships and the key relationships between the chair and either the board or the CEO.
Gary Mar: [00:33:12] I think that every company has to look at what its business is, and then they have to think about the matrix of skills that are required on the board. One of the key functions of a board is the audit and finance function, the oversight of the books of a company. And so having somebody that has a background in that, whether public sector or private sector, I think is probably one of the things that would be in your matrix of skills that you require, depending on the kind of business you're in. If you look at relationships with government or outside relationships, having somebody on a board that has a background in government relations or stakeholder relationships is important if you're in the oil and gas sector. Seems to me, fairly clear, that First Nations are a critically important part of the operating environment, that oil and gas companies find themselves in. The natural resources sector in general, is the largest employer of First Nations anywhere in the country, even larger than the federal government. I think what you're finding is that increasingly on boards, there's an interest in having people on that understand First Nations relationships. And this is not just a lip service. This is a real and tangible requirement for certain kinds of companies to operate in the environments that they operate in, like in natural resources. So I'd say that's probably true not just in oil and gas, but probably in the forestry business as well.
Gary Mar: [00:34:51] You've got to be able to understand how to get projects done in places where you're dealing with First Nations. If we look at pipeline business, the coastal gas pipeline, I think crossed the traditional territories of some 22, 23 or 24 First Nations bands, and the president and CEO of Coastal Gaslink made a remarkable effort. He spent most of his time negotiating and working with and understanding what was important to those 23 bands that the pipeline crossed over. It takes an enormous amount of investment of time and effort, but in the end, it's worth it. All of them signed off on benefits agreements that benefit the First Nations and ultimately benefit Coastal Gaslink as well and that's where the natural gas is moving from across northern British Columbia to LNG plants that are on the West Coast. Another example, of course, that many people would know, would be Trans Mountain expansion. Dawn Farrell and her predecessor Ian Anderson did remarkable work. And although it was much over budget, when you hear the CEO, Dawn Farrell, talk about why it was over budget, there's very, very good explanations for it, some of which were within the control of the company and some of which were not.
Gary Mar: [00:36:22] But don't think of it as a single project, think of it as a series of small projects that had to deal with geology, had to deal with archeology. As they were excavating, they were finding all these archeological sites as they're excavating and they had to stop. There were environmental areas that they went through where they had to stop and do an analysis as to how to deal with it. These are things that were not part of the equation when the original Trans Mountain pipeline was built 70 years ago. This is a remarkable project, and it did cost a lot of money, but ultimately it's going to move an additional, I think the current capacity is now about somewhere in the range of 930,000 barrels a day. That's really important. And the the central bank, Canada Central Bank, estimates that that would have an increase in the GDP of Canada of 0.2%. That doesn't sound like a big number, but if you look at 0.2% expressed as a percentage of a $2.9 trillion GDP in Canada, that is really a big deal. And we don't need one more of those, we need several more of those. The next one that'll come on board, the next big one will be when LNG Canada starts its flow of LNG off the West coast, that will be another big deal for the Canadian economy and we need more of those.
Munir Haque: [00:38:04] I just want to shift a little bit to some of your international experience. Assuming that you do often work and deal with counterparts in other countries, are there differences on how, especially from a governance perspective, that are unique to Canada? And what are some of the differences, if there are any?
Gary Mar: [00:38:27] Even within China, go to a boardroom with a Chinese state owned enterprise, and you'll see that some of them operate more like a North American boardroom, and some of them operate more like a very traditional Chinese boardroom. So if you go to a board meeting at, say, CNOC, it would resemble more of what you would see here in North America. And I think it's largely that way because CNOC, which is the international offshore Chinese energy company. Because they've had much more experience dealing with international operators. Be it Shell out of the Netherlands, or be it Exxon Mobil out of the United States. Their governance, my observation is, they appear to be more like their international peers. Where if you look at the boardroom of a company that operates solely within China, I think it's quite different. Now, what the details are of the differences I can't tell you because I've never actually sat at a board meeting, but seeing how their boardrooms tables are set up tells me something about how they operate their meetings. I don't think we should assume, ever, that the things that we do in North America are the greatest and best practices in the world. Every country has its own development of rules and engagements, both at a corporate level, but also at government levels as well.
Gary Mar: [00:40:07] I think that, for example, the World Trade Organization accepted China into it some, I guess, it's just been over 20 years, maybe 21, 22 years ago. I think the assumption by many people, myself included, was that introducing China to a rules based system of trade would necessarily and inevitably bring them to greater democratization and civil liberties and human rights. That turned out to be a totally incorrect assumption. And so the way that companies and governments operate in different parts of the world are functions of their history and their background, and I wouldn't expect China to go to democratization when we know ourselves that our commonwealth parliamentary system is a 500 year old work in progress that remains imperfect for all kinds of reasons. It's the best one that we can have for our system in our history, but don't expect Xi Jinping to be persuaded by the Prime Minister of Canada, when he lectures him on how things ought to operate in Beijing. That's not going to happen. So we need to figure out a way of respecting how other countries operate, how other companies operate and working with them, even between Canada and the United States, Canadians don't know as much about the United States as they think they do, both how their country operates and their companies operate and in, say, moving on a trade agreement, we need to be able to look at it through an American lens, not our own biased Canadian lens. And that to me is smart business and it's smart government. Is trying to understand the perspective of the person that you're doing business with, whether it's government to government or business to business.
Munir Haque: [00:42:11] You mentioned something about how some Chinese boardrooms are set up differently. Does that mean physically they're set up differently? Do you have any kind of specific examples of how, like chairs and tables, is that what you're referring to?
Gary Mar: [00:42:24] Yep. So if you've got, say, a delegation from Canada going over to an internationally operating Chinese SOE, the boardroom will look, and the meeting will set up, similar to what you would expect here. And so the head of your delegation would sit at the center of the table and be flanked by his or her senior staff. And on the opposite side, it would be the same. The head of their delegation would be at the center of the table, facing his or her opposite number that you brought in, and your opposite numbers will be sitting across the table from you. But if you go to a more traditional Chinese operated boardroom, what it'll look like is, there will be two chairs at the end of the room and the two heads of mission, the Chinese and the Canadian head of their missions, will be sitting at those two chairs at the front of the room, and there's no table in between, and your opposite members are flanked on either side of the room, looking at each other, but not across from a table, and all of the dialog will happen between the two heads of mission. There will be very little interchange between opposite numbers. So it's a very different kind of setup depending on the company that you're in and whether their work arrangement looks more like international peers or looks more like internal Chinese peers.
Munir Haque: [00:44:01] I just want to talk a little bit about what you see is, you talked about how businesses and boards have changed and First Nations considerations have changed over the years and how you operate with them. But what other trends have you seen that are happening, or where do you think things are going?
Gary Mar: [00:44:17] Well, the environment certainly is much more important as an external issue to be dealt with. Attention to the environment is not something that was dealt with particularly well by the oil and gas sector 25 years ago. I give this metaphor that if there was an environmental file on your desk and you were a CEO or a senior executive, it was a file that sat on the upper right corner of your desk, and you got around to it when you could get around to it. We should have known that groups like the World Wildlife Fund or the Sierra Club or Environmental Defense, that file was in the middle of their desk, and it's the only file that they worked on. And I think for a long time the oil and gas sector ignored it and said, you know what? People are going to need our oil. They're going to need our gas. And when people come to their senses, they'll figure out that some of the stuff that Greenpeace wants to do is not really practical. I think they did so with the erroneous assumption that the public couldn't be persuaded about the inelasticity of demand for fossil fuels. And so, increasingly, in all areas of all industries, paying attention to the environment is a legitimate and important piece to deal with.
Gary Mar: [00:45:51] And again, it speaks to how a board might want to have, in its skill matrix, people that understand this issue and that can make important contributions to how a company operates in that environment. I think that, again, 25 years ago, it wasn't really thought of as being a top-of-mind issue. But now I think it's on the radar of every energy company, and not just in energy, in a whole host of others as well. Maybe the second one is the issue of where your human capital is going to come from. If you are in the construction business, you know that the average age of people that are involved in construction is quite high, and you know that because the work is physically demanding, such people tend to retire earlier than they might retire if they're in an office job. So as the Canadian government moves to try and build 3 million homes by the end of this decade, where are those people going to come from? If you're in the construction business, you've got to figure out how it is that we can bring in people, attract them to be trained in this area and to hold on to them. And so human capital is going to be an increasingly important area for boards to think about.
Gary Mar: [00:47:22] And it's not just in construction. Think about banks. If you're operating a bank, you're increasingly going towards some of the more mundane jobs being done in a bank and automating them. This is the direction that things are going, and having somebody that understands what that transition looks like is important. So without naming names, if I were to guess about how banks operate, I'd say there's probably about a third of your workforce that is already fully invested in the use of technology and doing their jobs and being more efficient, more productive in their jobs. There's about a third of your staff that are not fully invested in it, but have the skills to be able to adapt to it and be more efficient and more productive. And there's maybe a third of your bank staff that will never be able to adopt or make that change. And you got to figure out how to make sure that those people are dealt with in an appropriate manner that is good for them and good for the bank. The last thing you want to do is tarnish the reputation of your company. In this case, a bank, by treating people callously on their way out.
Gary Mar: [00:48:46] The nature of work is changing, and we need to recognize that. I always ask people, are you a fan of Star Trek? And they say, oh, yeah, I love Star Trek. And I said, well, you ever notice that in the 25th century, the doctor is a hologram, but the nurses still have jobs. And so the nature of knowledge based jobs is going to change if they can be replaced by artificial intelligence tech tools. But people who look after things, who make things, who fix things, those people will still have jobs in the future. Jobs will change, and how companies conduct their business will change as a consequence of that. And those that figure it out earliest are the ones that are going to be ahead of the pack.
Munir Haque: [00:49:36] So as a CEO, working with your board, are there challenges in pushing them towards new trends or the evolution or is that something they're already up to speed on before they join your boards? Is there a method you use?
Gary Mar: [00:49:56] It's a reciprocal obligation to provide to your board what you believe are the best strategies to move forward, but it's also your board's responsibility to bring in their body of experience to instruct the CEO, so it really goes both ways. If you've got a good board, there should be no fear at all of the exchange of ideas and instruction. So I'm lucky that way. But not every CEO recognizes that the board is their boss. And sometimes CEOs think that they're the reason why the organization is successful. You may be smart as a CEO, but you're not smarter generally than your board collectively. So I think it's important for CEOs to pay attention to what their boards say, because ultimately you want to be a successful CEO. A happy board provides security for a CEO. But I think it's really important that it's a two way exchange of ideas coming up from management and through the CEO expressed to the board, but also the board's wisdom collectively informing the CEO as well.
Munir Haque: [00:51:06] Thanks. Lastly, I always say that it's easier to learn from other people's mistakes than it is to learn from their successes. Are there any complete train wrecks that you've been involved with, or that you know of, that you would share on a podcast so that people can learn from it? Could be from a governance perspective.
Gary Mar: [00:51:29] My dad, he never went to school in Canada or in China. He was born in Canada, went back to China after he was born. But he was one of the most wise business people I'd ever met. And he would say to me, son, if you're smart, you'll learn from your PE, your personal experience. But if you're really smart, you'll learn from OPE, other people's experience. And I think it's really important that CEOs and board members take some thinking time. I think sometimes as a board member or as a CEO, we spend our time doing what we do instead of thinking about what we do. I try my best to read broadly and to learn from OPE, other people's experience. I've been very lucky that I've had boards that I've worked with that I've really liked, both with PSAC and with my current situation. I can't say that I've had failures from a personal experience on a board, either being a member of a board or reporting to a board. But CEOs should spend more time thinking and being strategic and not just being reactive and not just being transactional. Good CEOs try and think things through into the future instead of just trying to focus on what's on their desk today or tomorrow. So reading extensively, I mean, this is what Warren Buffett says. He spends a third of his day on, is just reading. And I think that's pretty good advice. If it's good enough for Warren Buffett, it's certainly good enough for me.
Munir Haque: [00:53:27] Nice. And lastly, where can our listeners find out more about you? Do you have a website, LinkedIn?
Gary Mar: [00:53:34] The truth of the matter is I am disconnected from all social media. I don't use LinkedIn, I don't use Facebook. I don't have an Instagram account. I don't post things on X. But if you go to the Canada West Foundation website, you'll find a biography of me. If you go to Wikipedia, there's a biography of me. My cell phone is, I think it's listed on my business card. And people call me. I actually like in-person relationships. I got to say, being a CEO during COVID was very challenging, because what good leaders do is they are peripatetic, they do their business while walking about. And I found during COVID, my day was occupied with 30 minute segments of talking to people on a screen when sometimes, instead of taking 30 minutes, I could have answered a question or asked a question over a cup of coffee in three minutes in the common area of the office. I find I eschew all these social media platforms in favor of somebody picking up a phone and saying, hey, Gary, you got time for a cup of coffee? And I always say yes, because that's the best part of my day is interaction with people, either learning something or being able to mentor somebody one way or the other. I like both.
Munir Haque: [00:55:15] Thanks, Gary. I guess I owe you a coffee, so I'll get in touch with you and we can grab some coffee. So everybody, that's the end of today's show. Thanks again, Gary, for joining us.
Gary Mar: [00:55:25] Munir, thanks for having me on. And you're welcome to come by my shop for a cup of coffee anytime you're free.
Munir Haque: [00:55:30] Thank you.
Munir Haque: [00:55:31] Thanks everyone for listening to The Boardroom 180 Podcast. You can learn more about me and Action Edge Executive Development on our website at aeednow.com. That's aeednow.com. Fill out the form if you want me to reach out to you, or if you have any thoughts for future subjects or guests on the podcast. We also have a free board self-evaluation that would be linked on our website. You and your board can fill this out either individually or together, and it gives you a bit of a quick temperature check on how your board health is. As always, don't forget to hit like and subscribe to The Boardroom 180 Podcast. It helps us grow and bring more governance insights. We're recording from the PushySix studios in Calgary, Alberta with production assistance from Astronomic Audio. You can find their info and the links to AEX forums in the show notes. We've come full circle to conclude this episode of The Boardroom 180 Podcast. Goodbye and good governance.