Business elite gets a reality check

TheStar.com – opinion/editorialopinion
Published On Tue Nov 01 2011.    By Carol Goar, Editorial Board

Business institutions that want a safe, predictable keynote speaker seldom approach Ed Clark. The president and chief executive of the TD Bank Group has a first-class mind and enviable business record, but he also has a restless social conscience that can lead to some quite unbanker-like statements: praise for the Occupy Toronto protestors, moral qualms about his own eight-figure pay packet, shock at how little affluent people share with the less fortunate.

Organizations willing to challenge their audiences seek him out.

Fortunately the Ivey School of Business at the University of Western Ontario falls into the second group. This year it named Clark Business Leader of the Year, held a dinner in his honour in Toronto and gave him the podium. All of the city’s top financial executives were there.

True to form, Clark chose a big topic — Preserving the Things that Matter in a World of Constrained Resources — and took a candid approach.

First he set the backdrop. “Many political leaders formed their views and during the Age of Aquarius, but struggle to apply them in the Age of Austerity.”

That must change, he said. The era of visionary politics is long gone. With an aging population, expenditures on government services will grow faster than government revenues. In a globalized economy, Canada will keep losing jobs to lower-cost countries. And in a protracted period of slow growth, the gap between rich and poor will widen.

“So big questions need to be asked. Tough decisions will need to be made.

“But all that could easily lead to a politics of divisiveness. There is a risk we will bequeath to our children and grandchildren a world of ‘us against them.’ Such politics leads inevitably to everyone being worse off.”

The trouble signs are already visible, he pointed out. Canada’s middle class has shrunk and its working class is falling behind while an affluent minority prospers.

“Without fully understanding all the forces at play, people get it,” he said. “The Tea Party in the United States is an obvious example. It is tapping into the emotions of average Americans — people who’ve worked hard and played by the rules all their life but still don’t feel like they’ve reaped any of the expected benefits.

“That also happens to be the message being delivered by those in the Occupy movement. They recognize there is no easy solution and — to their credit — have avoided being captured by particular solutions. But their message is the same: they don’t like how the world is turning out.”

Finally, he got to the part of his speech guaranteed to make corporate executives squirm. He talked about redistributive policies. “Unlocking the current crisis may well require the population to accept actions laced with moral hazard — rewarding less disciplined members of society,” Clark said.

This path is fraught with risks. It could lead to ugly wedge politics. It could widen the divisions between “haves” who think they deserve what they’ve got and “have-nots” who think they deserve a chance. But refusing to face the issues would be more damaging in the long-run, he warned.

“In Canada there is a cone of silence around our longer-term issues. Many politicians believe talk about structural reform is like touching the third rail of the subway — you’re bound to get zapped.”

It is up to citizens, business leaders in particular, he submitted, to empower politicians to shift to shift from the old style of leadership to a new model, designed to make hard choices in a resource-constrained world. “Business leaders spend their careers in change management, leading organizations to shift paradigms, find new answers and rebuild themselves.

“Let’s support and reward leaders who strive to take the higher ground. Let’s stand together against divisiveness and political extremes.

“Canada is a civil nation, a compassionate nation, a nation that seeks consensus and that is confident enough to compromise. We need not be divisive. And we need not delay.”

Clark received the requisite applause. But he left his well-heeled colleagues with far more to cogitate than the usual business fare.

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