A new style of CEO will soon be defining the Canadian tech sector – and it can’t come soon enough.
This new breed of bigwig will be born out of a marriage of tough economic times and a new skepticism on the part of shareholders, currently being fuelled by a triple-whammy of high-profile insider-trading scandals.
With industries such as networking and telecom mired in a world of layoffs and dire economic forecasts, there is no room for the jet-set flamboyancy of a Michael Cowpland or the condescension of a John Roth. These are tough times. Shareholders and equipment purchasers aren’t interested in Marlen Cowpland’s newest million-dollar body suit. They’re starting to demand that their leaders reflect the temper of the times and ensure profitability and – in some cases – survival.
Some nefarious stock-trading by high-ranking executives has also spurred shareholder anger. First there was the Enron earthquake, the shock waves of which were felt well north of the 49 th parallel. Then, in the space of less than a week last month, two Canadian outrages became front-page news:
– Nortel CFO Terry Hungle quit after it came out he had dumped US$78,500 in Nortel stock just before the company announced in March 2001 that its sales figures would be dismal and that it would be slashing 15,000 jobs. The stock subsequently plummeted US$2.76. And on Dec. 21 of last year, Hungle gave himself an early Christmas gift by funnelling US$86,300 back into Nortel, conveniently just before it announced its losses wouldn’t be as bad as expected for the fourth quarter. The stock jumped 12 per cent.
– Former Corel chief Cowpland had a sweet settlement with the Ontario Securities Commission reversed when a higher OSC board decided his questionable stock dealings should not be forgiven so easily. Cowpland’s lawyer described his client’s actions as “an accidental offside, not an intentional offside.”
It seems that shareholders might have been willing to buy stock in these guys’ firms, but it’s doubtful that they’ll buy lines such as that. They’re getting tired of the egos.
Make no mistake, a big ego is often required to make it to the top of any large company. That will never change. What will change with the new breed is the degree to which those egos are kept in check, and the degree to which they influence corporate decisions. Widespread shareholder discontent with flamboyancy and braggadocio, the likes of what Copland has consistently displayed, will see to that.
The traits that will define an approved-of IT-sector CEO will mirror those of an accepted prime minister of U.S. president: confident yet seemingly selfless. As any successful politician will tell you, overt displays of egotism and condescension these days will mean a quick trip back to the private sector.
With falling profits and job losses the order of today’s economic climate, the modern IT CEO would do well to realize the wisdom of that approach. It’s getting to the point where shareholders won’t settle for anything less.