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Governance group prefers private approach

Chairman Michael Wilson aims to raise firms' standards without confrontation

Former federal finance minister Michael Wilson attracted plenty of media attention as a politician, but in his new role as corporate governance reformer, he has no desire to get press coverage.

Instead, the chairman of the year-old Canadian Coalition for Good Governance said the group, which represents 35 of the country's most powerful pension and mutual funds, would rather flex its muscle in the privacy of corporate boardrooms and corner offices.

"We are not out to get headlines," Mr. Wilson said yesterday at a conference on corporate governance organized by the Conference Board of Canada. "If we could get through a year without the name of a coalition member in the headlines, I'd be quite happy."

Since its inception, Mr. Wilson said, representatives of the coalition have contacted 112 of the 137 companies in which its members invest. It has conducted 59 detailed governance reviews and has had personal meetings with 39 companies. Mr. Wilson said those meetings with board members are used to discuss "opportunities for improvement" and give the coalition an understanding of a firm's attitude to corporate governance and the influences at the firm.

"It is not confrontational," he said.

Mr. Wilson said the attention to issues such as board composition and corporate disclosure by his group and others, such as The Globe and Mail, generally has raised the standard of governance practices in Canada. But he said the changes have not been universal. For example, in 2002 when the coalition first reviewed governance practices, only one firm in its sample fell into the "perfectly awful" category. Last year, there were two that merited that label. Keeping with his low-profile policy, Mr. Wilson refused to identify either of the firms. "I don't want to get into that," he said.

Some other companies, he said, did "slip," and there has been little improvement in the use of board evaluations and the elimination of dual class shares -- a practice that coalition members firmly oppose.

Looking to the future, Mr. Wilson said there is no doubt that compensation will be the hot-button issue this year, both in Canada and in the United States and Europe. Compensation, he said, "is at the heart of many governance problems."

© 2007 The Globe and Mail. All rights reserved.

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