Here it is, 2016, and we are in such a pickle - fiscally, monetarily - that Finance has revived the concept, naming Dominic Barton as chair of a new Advisory Council on Economic Growth for the annual sum of a dollar (plus expenses.) The yet-to-be-named council members will be similarly compensated, conjuring images of H. R. MacMillan (lumber) and W.C. Woodward (retail) flying cross-country in turboprop planes bent on industrially advancing the country.
There's a demand for rubber? Create a Crown corporation!
Historian Jack Granatstein has noted that in 1941 the government of William Lyon Mackenzie King had 107 dollar-a-year men - led by "the cream of Canadian business" - on its employment roster. And that Canadians would go on to win the economic war.
This is war. And the good news is that the government of Justin Trudeau has harnessed Barton to be a leader in battle.
I mentioned Barton in a column last month, when Trudeau, in his inaugural address at Davos, drew a chuckle from the crowd noting that "at least half of this room has employed Dominic Barton at one point or another."
Four weeks later Barton, global managing director of McKinsey and Co., has emerged as the point person on Trudeau's pledge to spur long-term economic growth and nurture the "middle class."
What we need to know here is that Barton is not your plain vanilla management consultant.
He has given numerous interviews on how hard it was for him to make McKinsey partner, evincing an uncommon degree of candour given the high corporate circles in which he operates. His CV includes five years as Asia chairman, based in Shanghai, and before that four years in Korea. (Writing about China he commenced with a quote from Aristotle: "It is manifest that the best political community is formed by citizens of the middle class, and that those states are likely to be well-administered, in which the middle class is large." China was going gangbusters, with the percentage of middle class urban households vaulting almost incomprehensibly to 68 per cent from four per cent in little more than a decade.)
Of important consideration is this: Barton has staked a critically clear position on dysfunctional capitalism. "The dialogue has clarified for me the nature of the deep reform that I believe business must lead-nothing less than a shift from what I call quarterly capitalism to what might be referred to as long-term capitalism," Barton wrote in the Harvard Business Review five years ago. "This shift is not just about persistently thinking and acting with a next-generation view-although that's a key part of it. It's about rewiring the fundamental ways we govern, manage, and lead corporations. It's also about changing how we view business's value and its role in society."
This is not the conventional speak of big business. Yet two years later Barton joined with Mark Wiseman, CEO of the Canada Pension Plan Investment Board, to create Focusing Capital on the Long Term. That initiative targets institutional investors and corporate directors to effect company by company change, from CEO compensation - "too often structured to reward a leader simply for having made it to the top, not for what he or she does once there," Barton once wrote - to ending earnings guidance.
CEOs need to lay out transparently long-term goals that address all stakeholders, from employees and suppliers to the environment. This is not, Barton argues, at odds with the goal of maximizing corporate value. "On the contrary, it's essential to achieving that."
Unilever CEO Paul Polman, who sits on the advisory board, was quick to cease Unilever's pattern of providing quarterly guidance to analysts and, according to Forbes, told investors they could take their money elsewhere if they didn't "buy into this long-term value-creation model, which is equitable, which is shared, which is sustainable."
Long termism reaches beyond the boardroom. Larry Fink, CEO of New York investment firm BlackRock, which has a record breaking $4.6 trillion (U.S.) in assets under management, also sits on the advisory board. Fink has been beating the drum for infrastructure spending as a spur to economic growth, from the short term impact of job creation at decent wages to the long term impact of boosting productivity.
How long term is long term? A Finance Ministry spokesperson says more details will be forthcoming soon, as will the names of the full slate of dollar-a-year women and men. We know this much: the council will be looking beyond the calendar year end to, oh, the next quarter century. And for that the Trudeau Liberals should be applauded.
Source: The Star