The Board of Directors

THE BOARD OF DIRECTORS

The first thing I did when I was planning to start my company was the selection of a blue chip board of Directors.

Prior to creating Pelmorex, I observed what worked well and what did not as it relates to Boards of Directors.  My exposure was mainly twofold:  Telemedia Communications Inc. and Cancom.

TELEMEDIA

At Telemedia, we had a good sized Board consisting of a group of insiders who were all shareholders in the company and a varied group of outsiders.  We had 4 meetings per year and they were professionally organized.  Philippe de Gaspe Beaubien, the founder and leader of Telemedia, was its Chair.  The period was from 1977 to 1983.  Board meetings were the focal point of the company.  Everyone prepared for the meetings which lasted about 3 hours.  Once a year, they would hold an offsite meeting to go over the strategy of the company. 

The Board of Directors seemed to be operating smoothly with a focus on planning.  However, when I started at Telemedia in April, 1977, I discovered many major anomalies with the books of the company which is the reason that they changed the CFO.  In one of the radio markets, there had been no invoices sent to customers for several months resulting in a large backlog.  In another market, there had been no work done on the sale of a TV property which was only one week away.  These were the days of the anti-inflation board which limited salary increases but these had been exceeded during the course of a labour negotiation.  The books of the company had been seized due to an unpaid tax claim relating to a previous issue of preferred shares in an acquisition.  All of these issues were resolved but it drove home the importance of controls and the need for the Board to have proper governance to detect these issues and to deal with them.  Hence, the need for a proper functioning Audit Committee and Compensation Committee.

CANCOM

At Cancom, it consisted of a consortium of 5 national broadcasters who each had 2 representatives on the Board plus the CEO.  I was one of the nominees of Telemedia and attended a few Board meetings before the President and CEO was asked to become Chair of the CRTC.  Each broadcaster had its own agenda and ran the partnership with this in mind.  The goals and objectives of the company were secondary.  At each meeting, I noted that the Board members would debate matters relating to their own issues and little time was allocated to company matters.  The President and CEO let this matter go on which resulted in little business being conducted.  When I was asked to replace Andre Bureau as the company's CEO for a period of about 6 months to take the company public, I accepted on one condition: that I would take care of the company's issues and the Chair was to focus on shareholder matters.  We had proper governance thereafter although the company was still losing money and the public issue was desperately needed. 

PELMOREX

For Pelmorex, I wanted to establish a Board with optimal governance.  I also wanted a blue chip Board of people who had no conflicts and who would focus on the company's interests only.  So I approached each prospect by indicating that I was a Pisces and a dreamer.  Their job was to keep my two feet on the ground.  My commitment to them was that I would consult them on all strategic matters and that I would listen to them. Each prospect accepted and they were successful Board members for almost 25 years.  We also had sound governance with 3 or 4 meetings per year as well as proper functioning Audit  and Compensation committees which met annually.  Each of the latter was comprised 2 independent members and 1 member from management.  The focus of meetings was on strategic matters and the Board operated exceptionally well.  It still exists today even though we control 100% of the company.  It is important since it enables management to report to the formal Board 3 times per year which is taken very seriously.  The goal was to operate as a public company even though we planned to remain private.

In conclusion, some people debate whether to have a Board of Directors or not.  I personally enjoy that discipline and the thought of not having one never crossed my mind.  The cost is not that high and I view it as an investment, not an expense.  I always gave the Board an excellent package of information which would allow it to do its job.  It is work but it is very well placed.  The key is in the selection of its members.  We have scored well on all of these markers.  I have been the Chair of the Board as well as President of the company.  I know some experts recommend separating these two functions but it has worked for us.  When I retired as the company's CEO, I have maintained the role of Executive Chair so the roles are now properly separated.

THE ENTREPRENEURSHIP LIFE CYCLE

I am very proud of my association with The Pierre L. Morrissette Institute for Entrepreneurship at Western University's Ivey Business School as well as being Co-Chair of Western Entrepreneur, a cross faculty Entrepreneurship ecosystem at Western University.  Western's commitment to Entrepreneurship has produced a significant number of success stories and has become a go-to place for Entrepreneurship studies on a global scale.

We often think of Entrepreneurs as young people launching tech start-ups from a garage.  Or, what about young people shaping their dreams by launching their business in an incubator or accelerator community with a group of like minded people.  

But then there are people like me who wanted to gain valuable experience before taking the plunge.  After a 5 year banking career to learn what makes them say yes, 6 years as a CFO to negotiate and finance investment activity and 6 years as a CEO to take a satellite business public and grow it, I changed gears by giving myself 2 1/2 years to find a media business to buy.  I launched via acquisition but I started from scratch.

A friend of mine is the second generation owner of a very successful national retail chain.  He once said that he was not an Entrepreneur since his Dad was the Founder.  I disagreed.  He is an Owner-Leader like all other Entrepreneurs with everything on the line every day.

I am also very passionate about multi-generational Family Business.  I am determined to go this route in our family for many reasons which will be the subject of a future blog.  The point is that Entrepreneurs eventually reach a crossroad of exit vs transition.  Most people exit.  Why?  Because transitioning successfully is, in my view, more difficult than building the business in the first place.

The point of this preamble is to demonstrate that there is clearly an Entrepreneurship life cycle which at Ivey and Western we summarize as follows:

• Accumulating business and technical skills
• Start-up phase
• Development and growth stage
• Exit or transition to next generation
• Multi-generation family business

Every large business was once a start-up.  It got there by consolidating its category or by re-inventing itself as the market evolved.

But most start-ups launch, grow and then exit to a strategic player, a private equity firm or another form of buyout.

The scarcity is in the category of start-ups which have transitioned to become a multi-generation family business and which has grown to be a large company scaling internationally.  This is the category which I am most excited about.  Any country which produces these success stories develops a solid economic base.  The alternative is often becoming a branch-plant economy because of exits which eventually end up in the hands of foreign nationals. 

A country like Canada must understand every stage of the Entrepreneurship Life Cycle and develop strategies which lead to success at each stage of the cycle.  We need national success stories.  In fact, let's also enable our home-grown Entrepreneurs to buy back branch plants. 

Just Getting Started

I end every speech by saying "we're just getting started".  

Building a business is an adventure.  You formulate a vision and then go for it...one step at a time.  It is a journey.  You learn from the past but you build by going forward.  Hence, "just getting started"...every day!

So I'm launching this blog to share my lessons learned as an Entrepreneur.  I have written a lot over the years but it is the first time that I go the Blog route.  I like starting something new, a new learning experience.  I have a few guidelines to apply when embarking on a new journey:

• Mistakes are allowed

• Try...fix it...try it again

• Seek advice by consulting experts

• Bottom line, just go for it.

This is my first post.  I look forward to comparing to future posts.  The site will be undergoing continuous improvement...just like how I have run my business over the years.  For now, everything about it is temporary or BETA, including my domain name, my hosting, my themes or look and feel.  I am just anxious to get going on this new adventure but I will strive to improve it every step of the way.

Why am I doing this?  Very simple, I want to share my lessons learned as a successful entrepreneur.  I am passionate about entrepreneurship...the engine of all economies in the world.  Hopefully I can contribute to future entrepreneurs and their success by sharing my lessons learned.   I often meet with young entrepreneurs and give them advice.  I enjoy watching them succeed and grow as they embark on the journey from concept to reality.

To be continued..,.