Have a Holly, Jolly and Budget-Friendly Holiday

Christmas brings out the capitalist in me.

Every holiday season the tinsel comes out, lights sparkle through the night and Starbucks starts serving seasonal over-priced drinks.The ravenous consumer in me springs out. Part of me is so turned off by the consumer culture overload that looms its expensive head come mid-November. I feel queasy at the massive displays of capitalism on steroids.

But another part of me loves it. I want the ornaments that are way too expensive even though I could probably make them in a few arts and crafts sessions. I want a peppermint mocha latte with lots of whipped cream please! I want ugly Christmas sweaters,sparkly decorations, the blinking lights to adorn my bedroom with holiday cheer.

That’s the thing about Christmas. It brings about this hypnotic advertising that makes people develop a sudden amnesia as to the state of their bank accounts and the economic climate. As someone who has worked in retail through the holiday seasons, I’ve seen my fair share of declined credit cards. Everyone would give me some kind of excuse. But the truth was plain to see: people spend way too much money on Christmas. The flocks of hungry shoppers would herd in splurging on $7.99 Papyrus cards, $40 blankets, $20 mugs and other utterly absurd things. For goodness sake, you won’t be betraying your family and friends if you just pick up a few things from the sale racks.

I would roll my eyes, scoff at their mediocre budgeting and their sheep-like obedience to “buy this, buy that, there’s a promotion!” And even feel a sense of sadness as I saw people scraping their cash together, waiting in lines with this strange look of desperation in their eyes.

But I realize that, in many ways, I fall for it as well. I don’t spend the money that so many others do but that’s probably because my family is Muslim. Though we do plan a big family get together for Christmas, we don’t really splurge on each other. Still, I find myself inexplicably drawn in by the gaudy displays and giant candy canes. I photograph the Christmas trees at all my friend’s houses. Despite being a leftist, advertising-hating feminist, have holiday fever that I cannot shake off.

I have a love-hate relationship with the consumer culture of Christmas. I walk into Indigo and fawn at their Christmas display, while simultaneously hating that they can price everything ridiculously high and people will still buy their products. It’s a time when advertisers can exploit people tenfold, with this weird hypnosis happening as the stores play Kelly Clarkson Christmas songs over their speakers. Christmas is, no doubt, the most capitalist holiday of them all. Santa is probably an investment banker and the elves are outsourced workers toiling for measly wages.

Every part of me knows that splurging on family and friends is not the right way to show them your love, and yet I feel compelled to do so regardless. As cheesy as it may sound, with our fast-paced lives and ever-packed schedules, isn’t giving someone your time and therefore happy memories a better way of showing them you care? I feel like after school Christmas special saying that, but I can’t help but feel that it’s true.

The stress of holiday shopping makes your average consumer less like Santa and more like the abominable snowman. People become ruthless, over-worked, frustrated, and inevitably broke as a result of that Christmas hypnosis that we just can’t resist. I’m reminding myself this year that I don’t need custom Christmas lollipops or elaborate snow globes, but what I do need is to spend quality time with those I care about.

The Christmas fervour of shopping malls and Dundas Square is partly a good thing. It creates a sense of community and happiness. And it’s a way to brighten up the cold, overcast dullness of winter. But people really do need to control their spending and remember that they are not the Great Gatsby. Christmas is a happy time of year that really shouldn’t be followed by debt and almost-mental-breakdowns when your Visa bill haunts you like the ghost of Christmas past.

‘Tis the season to be jolly, and also responsible with budgeting, as un-catchy as that sounds. So Happy Holidays, and remember: don’t fall for the candy cane doughnut at Tim Hortons — it taste likes a cooked Christmas elf.


Steve Jobs Biopic Filming to Take Place in ‘Two Auditoriums, a Restaurant and a Garage’

michaelfassbenderEarlier this week, leaked emails and data from the recent Sony hack revealed some interesting details on the Aaron Sorkin-scripted Steve Jobs biopic that’s currently in the works, including Sorkin’s desire to cast Tom Cruise as Steve Jobs.

Additional emails shared today by The Verge from Aaron Sorkin, prospective director David Fincher and Walter Isaacson shed more light on the project, including where filming will take place and what Fincher and Isaacson thought of the script.

Though Danny Boyle, director of Slumdog Millionare will direct the Steve Jobs movie, executives involved in the film originally hoped to have David Fincher, responsible for directing films like The Social Network, Fight Club, and Gone Girl, direct the biopic. In a February email, Fincher expressed quite a bit of excitement about the picture, calling it “a one man show.”

Is great. It’s a play, but a really quicksilver, cinematic one.
I would think you would want to cast and rehearse very carefully (couple months)
Shoot very quickly (4 or 5 weeks — 8 days per ACT??)
The venues would be easy (we could probably find them all in town)
Editing is where we would spend time.
Can SONY market a ONE MAN SHOW(?)
Can you guys make the LENNY of it all, the MUST SEE?

Walter Isaacson, who penned the biography the movie is based on, was similarly excited about the film and told screenwriter Aaron Sorkin in an email that the script was “totally awesome” and that he was “deeply moved by the narrative arc and by the beautiful end.”

Sorkin has clearly stated in the past that the film will consist of three continuous scenes covering the time ahead of three different product launches, but his emails reveal a bit more detail. According to Sorkin, the entire film will be able to be shot in just four locations that include “two auditoriums, a restaurant and a garage.” Product launches covered are expected to be the unveiling of the NeXT computer, the debut of the original iMac, and the introduction of the iPod.

Still in the casting stages, the Steve Jobs biopic will star Michael Fassbender as Steve Jobs and Seth Rogen as Steve Wozniak. Jeff Daniels is in talks to play the role of John Sculley, and Universal Studios, which took over the film in November, is currently looking to cast several female roles, including Steve Jobs’ daughter, Lisa Brennan.

Canada Keeps Skirting the Oilsands Issue at the COP20 Climate Talks

Canada is “flying under the radar” at this year’s UNFCCC COP20 climate talks in Lima, Peru according to Canadian Youth Delegation member Brenna Owen.

Canada’s negotiators are working hard to sidestep the issue of the country’s growing greenhouse gas emissions from the oil and gas sector according to Owen, while simultaneously keeping quiet about the oilsands as nations come up with their “intended nationally determined contributions” in the global climate agreement.

“They’re not going to be able to do that much longer,” she added. “And they’re not going to be able to avoid talking about the tar sands.”

Aleah Loney, another member of the 10-person youth delegation, said the group is eager to push Canada’s ministers and negotiators to address the issue of oil and gas emissions rather than employing evasive tactics to avoid the concerns outright.

On Tuesday, as ministers and delegates from around the world continued to arrive at the climate talks to negotiate an internationally binding climate agreement, Prime Minister Stephen Harper told the House of Commons he would not regulate emissions from Canada’s oil and gas sector.

“Under the current circumstances of the oil and gas sector, it would be crazy — it would be crazy economic policy — to do unilateral penalties on that sector,” he said. “We’re clearly not going to do that.”

The oilsands are Canada’s fastest growing source of greenhouse gas emissions. In October, Canada’s environment commissioner Julie Gelfand said the country has “no overall vision” when it comes to oil and gas regulations and as a result will not meet its 2020 international greenhouse gas reductions targets agreed to in Copenhagen.

In the House of Commons Harper also claimed “nobody in the world is regulating their oil and gas sector.”

“I’d be delighted if they did, Canada will be there with them. But we are not going to impose unilateral penalties.”

Harper’s comments add another layer of insight into the activities of Canadian negotiators in Lima who are actively skirting the issue of national responsibility by pointing fingers at other nations.

Environment Minister Leona Aglukkaq told delegates at the climate talks Canada is interested in an agreement “that would see all major emitters commit to do their fair share.”

Dale Marshall, national program manager with Environmental Defence, told DeSmog that Canada “for the longest time has been trying to…talk about all major emitters to put everyone in the same boat.”

“On the one hand you could argue there are major developing countries that could do more, but from what I see in terms of historical responsibility countries like Canada have much, much greater responsibility to act and much greater resources to act and should take on greater commitments.”

“When you point at countries like China and India,” Marshall said, “you’re essentially deflecting blame and making it easy for Canada to stay with very weak targets.”

Christian Holz, international policy director with the Climate Action Network, said Canada has “maneuvered itself into a corner of insignificance,” at UNFCCC talks.

He said instead of talking about oil and gas regulations and growth in the oilsands, Canada is redirecting attention to a new commitment to reduce hydrofluorocarbons (HFCs), which are used in air conditioning and heating.

“They decided to focus on one of the smallest areas of Canada’s emissions profile. HFCs account for about one per cent of Canadian emissions and the oil and gas sector is about 25 per cent right now. So of course, we’re not picking the right areas to focus on.”

Holz said this kind of diversion tactic isn’t even generating controversy within the negotiations or at home because “nobody’s really taking Canada seriously anymore.”

“I guess that’s why you don’t see the outrage that you would expect from bait and switches like that if Canada was considered a genuine participant in this global effort to address climate change.”

Loney from the Canada Youth Delegation said her group is putting effort into keeping the oil and gas sector relevant to Canada’s participation in the climate negotiations.

“We really want to talk about the oil and gas sector as a whole and that includes fracking. But we feel it’s important to highlight the tar sands as well,” she said. “We’re talking at a very high level at the UNFCCC and people know what the tar sands are here.”

Kelsey Mech from the Canadian Youth Climate Coalition and a member of the youth delegation in Lima said it’s important for their group to keep the pressure squarely on Canada.

“We’re linking the two worlds,” between Lima and Canada, Mech said, “trying to bring back to Canada what’s going on here.”

“One of the reason why it’s important for folks like us to be here is to put that pressure on internationally on our own government. They’re not going to bring something strong to the table internationally if there isn’t that pressure back home domestically.”

“We’re here to put tar sands back on the table.”

Loney added that this process benefits from being complicated. “They take climate negotiations to such a high-brow that it cuts people off.”

“It’s been important for me to bring these issues back down,” she added.

On Tuesday, Loney brought the question of the oilsands to the negotiations, asking Canadian representatives, “what can I bring back to my friends in Alberta? What can I take back to my friends in Fort McMurray and my friends in treaty territory that are dealing with the effects of living downstream of the tar sands?”

“These are real things that impact real people.”


True North REIT raising equity capital in $27M bought deal

Amid all the market doom and gloom of this week – and there was plenty – at least one issuer was brave enough to raise equity capital.

Late Thursday, True North Commercial Real Estate Investment Trust agreed to a $27 million bought deal via the sale of 4.4 million units at $6.15 per unit. CIBC and Raymond James Ltd. are leading the offering that was priced at a 4.1% discount to the trading price ($6.41) at the time the deal was announced.

Aside from the public equity raise, Daniel Drimmer, the company’s chief executive is also investing $1 million by way of a private placement at the same unit price.

The issuer needed to raise capital because it made what it termed “transformative acquisitions.” In all it has agreed to purchase 11 office properties located in southern Ontario for $83.4 million. The bulk of the properties are leased to either the Federal Government, the Provincial Government of Ontario and credit-rated tenants.

True North last raised equity in August when it garnered $12.6 million via the sale of units priced at $6.55; in February 2013 it raised $55.7 million at $3.83 a unit.

Sony hackers could have slipped past 90% of defenses, FBI director says

The malware that thoroughly penetrated Sony Pictures Entertainment was so sophisticated it likely would have worked against nine out of 10 security defenses available to companies, a top FBI official told members of Congress.

The comments, made under oath Wednesday by Joseph Demarest, assistant director of the FBI’s cyber division, are the latest to largely let Sony officials off the hook. Last month’s rooting of servers operated by Sony’s movie division is believed to have exposed more than 100 gigabytes of data, including not only unreleased movies but, more importantly, personal details on tens of thousands of employees. Speaking before the Senate Banking, Housing, and Urban Affairs Committee, Demarest’s apologist comments closely resembled those reported earlier this week from the CEO of Mandiant, the security firm investigating the breach on behalf of Sony.

“The level of sophistication is extremely high and we can tell…that [the hackers] are organized and certainly persistent,” Demarest said, according to IDG News. “In speaking with Sony and separately, the Mandiant security provider, the malware that was used would have slipped or probably gotten past 90% of Net defenses that are out there today in private industry and [likely] challenged even state government.”

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2015 Trends and Answers in Corporate Governance

2015 is shaping up to be a year where boards, once again, will be under intense pressure and scrutiny to get it right. Here is a list of trends and key issues, along with what boards are or should be doing in response.

1. Greater Director and Advisor Independence

A director or professional advisor can be formally independent, and yet captured inside the boardroom. Forms of capture reported to me include social relationships, donations, jobs or contracts for friends, perks, vacations, office use, director interlocks, supplier or customer relations, and excessive tenure and compensation. Look for more regulators implementing term limits and moving towards an objective standard of director independence. Look for activists going into the background of directors to demonstrate the capture. Look for investors focusing on the origination of each director and service provider, which is to say how he or she came to be proposed, to address social relatedness.

Boards can protect themselves by terminating any director or professional advisor who cannot be reasonably seen, by directors themselves and more importantly by an outsider, to be independent from management in their oversight and assurance roles. Assume what boards know internally is what is or will become known externally. This trend towards tighter independence standards will continue: For example, internal oversight functions should also now be independent from senior and operating management, and that includes the risk, compliance and audit functions, who now should report functionally to the committees and board. Any director or external or internal advisor to the board or a committee should be, in law and in fact, independent of all reporting management or any other adverse interest, in order to be free to make recommendations that run counter to that of management. A board fully protecting itself would also require a third party anonymous review of director and advisory independence annually, and acting on the results. Directors know who is captured and there should be a mechanism for this to come through.

2. Better Board Composition and Diversity

Regulators are moving towards prescribed competency matrixes; the production of curriculum vitae (not perfunctory short bios); and interviews with directors and oversight functions to determine whether these individuals are fit for purpose. Activists are searching director backgrounds and track record to determine alignment between competencies and the business model and strategy of the company. Regulators are legislating board renewal and diversification, through quotas or the production of measureable objectives covering recruitment to retirement.

Competency, diversity and behaviour matrixes should: flow from the purpose of the board and the strategic and oversight requirements of the company; be established by the nominating committee; and be independently designed and validated to ensure recent and relevant expertise is possessed by each director. The diversity policy should extend the prospective director pool to previously unknown directors and who may be joining their first board (80 per cent of directors are on one board only). Tenure limits and excessive directorships (beyond two) should now be policied and capped (the average board position is 300 hours). Robust matrix analysis and director evaluation should occur by the nominating committee and its independent advisor, not management. The board should extract directors who do not possess relevant and recent competencies or desired behaviours. (See boardroom dynamics, below, for a separate discussion of director behaviour.)

3. Risk Governance

Plaintiff’s investor lawsuits and proxy advisory firms are targeting directors at risk for oversight failure. Regulators are imposing onerous risk coverage requirements on directors that require oversight of internal controls, risk-takers and limitations. Lack of understanding of social media, bring your own device, and cyber security are contributing to enormous investor loss and brand impairment, as an example of technology risk. Recent risk failure by boards also includes sexual harassment, safety, security, technology, bribery, fraud and reputation.

Boards should now have directors possessing risk expertise, as regulators are requiring this. The identity of these directors should be disclosed. Every company should board-approve a risk appetite framework, including internal control reporting and independent, coordinated, assurance over controls mitigating each risk and their interactions. Directors using technology dashboards should oversee risks prospectively. Hiring of risk, compliance and audit functions should occur, reporting to the audit and risk committee. Known limitations should cascade throughout the organization, and back up to the board, with ease, including within each market in which the company operates, and to key suppliers. Annual third party reviews should occur, reporting directly to the board and audit and risk committees. Board and committee charters should have coverage over each material risk, financial and non-financial. Audit committees that oversee substantive non-financial risks may be a red flag. There will need to be significant investment and restructuring of reporting relationships for the foregoing risk governance regulation to occur.

4. Compensation Governance

Media and public pressure over the quantum and alignment of executive pay have resulted in regulation over: compensation committee and advisor independence; say-on-pay; proxy advisors; and pay ratios; but not over pay-for-performance (most important) and clawbacks, yet. Certain public regulators have become more aggressive, targeting the quantum of pay. Financial regulatory focus is on the delivery and alignment of pay. There is a modest, but will be a growing movement once full regulation occurs, moving from (i) short-term, quantitative, financial pay metrics, relying on comparator inter-company benchmarking, which exacerbates pay unrelated to performance, to include (ii) long-term, qualitative, non-financial pay metrics, with customized, risk-adjusted pay delivery commensurate with internal value creation and shareholder return.

Boards should engage directly with long-term, major shareholders on their pay plans, without management influence. Clawbacks should be restructured or implemented based on risk management and ethical failure, not fraud, using an independent advisor not the company lawyer or management-retained counsel. Boards should approve key performance metrics based on an explicit full business model invoked from the strategy. 75 per cent of the performance metrics reflecting the firm value chain should be leading and non-financial indicators. Peer benchmarking should be balanced with the foregoing pay principles and long-term alignment with the product cycle of the company (five to seven years, not three). Non-financial leading metrics such as innovation, value and quality, and financial metrics such as balance sheet and capital treatment and returns, should be incorporated into pay plans that have a line of sight to management performance, without any unjust exogenous enrichment. There is much work to be done here, and more regulation is expected in 2015 and 2016.

5. Greater Shareholder Accountability

Look for activism to grow unabated, and institutional shareholder and even regulatory support of proxy access in 2015, giving greater control to shareholders over director selection and removal. Look for further shareholder assertion of rights and coordination over the targeting of below-average management supervised by complacent boards. Look for shareholder focus on director mindset, track record, and lack of management capture or self-interest. Look for continued attack on entrenchment devices by management and their retained advisors to insulate under-performers.

Camera-ready boards should implement private, candid, executive session meetings with long-term shareholders to discuss governance, risk, pay, and value creation. Investors and boards should focus on company performance in comparison to peers, and superior governance that exceeds the minimal. This includes background of directors. Independent governance auditors should be retained to provide an activist point of view, ahead of a possible attack. Any advisor to the board on shareholder engagement should be independent of management.

6. A Focus on Strategy and Value Creation Focus

Activist and, increasingly, good board focus is on the value creation plan, monitoring, and holding management responsible for its achievement. Complacent or inexperienced boards incapable of directing an under-performing, ineffective or inefficient management team are being targeted. Weak or legacy chairs and directors are also targeted. Excessive or non-performance based compensation is a red flag for governance intervention.

Good boards are becoming engaged, focused, results-oriented and disciplined. Agendas and committee structures are being revised to focus on strategic primacy and value creation. Robust debate and review of the plan is the primary board agenda item each meeting, and strategic practices are adopted, such as, among others, that at least one presentation each meeting from key personnel below the senior level, on that person’s role in the value maximization plan, and a full discussion of progress to date in that regard. However, board renewal is not reflecting this structural and deeper board focus, yet. Ill-chosen directors are still unable to add value strategically, my applied research suggests. There remains ample opportunity for activist intervention.

7. Information Technology Governance

Rapid technology advancement has created opportunity and risk. There is profound technological ignorance by many or most boards that is creating an inability to direct and oversee management. Cyber security, bring your own device, and social media are just three IT risks that, reviews indicate, have deficient or non-existent internal controls, which in turn causes privacy breach, reputational damage, and significant investor loss. Plaintiff’s lawyers are suing boards, correctly alleging breach of duty of care. Regulation is not keeping up with cyber-threats and hacker advancement.

Boards should be IT literate, agree on the standard and platform, and direct management to have an action plan and target date for implementation, covering crown jewels; assuming penetration; and including internal controls over behavior and human error. Boards should control the budget, talent, resources, reporting and assurance of IT risk as part of broader ERM (enterprise risk management) and strategic risk. Scenario testing, mock attacks, and expert assurance should be board-reported. If management resists third party validation, this is a red flag for any board.

8. Board Performance Audits

Regulation, activist, technical and public pressures are augmenting the objective standard of care for directors. Director action (or inaction) will be visible and risk liability or other loss post failure. Resourced and sophisticated investors are a particular threat, as are regulators. Complying with basic practices is no longer adequate assurance or protection for boards, as capture, entrenchment, self-dealing, complacency and non-performance have all been shown to occur within existing governance frameworks. Governance failure, including bribery, corruption, cyber and under-performance, have occurred at companies whose governance has been said to be exemplary.

Good boards and regulators are moving towards independent, internal and deep reviews over the board, risks and internal controls, similar to financial audits. Just as management cannot assure its own work, neither can boards assure a self-review. A well-chosen third party or independent internal auditor provides boards with advance warning on precisely where their vulnerabilities and weaknesses are. An expert audit within an activist and emerging regulatory framework is a wise use of time and resources.

9. Tone at the Top – and Now in the Middle

Long arms of regulators are now able to hold boards vicariously responsible for fraud, bribery and other forms of corruption at deep levels within and even interacting outside their organization. The distraction, assets put at risk, and reputation damage can be significant. “Tone in the middle,” culture, and imprudent risk-taking are the new warning signs on which sophisticated boards are requesting concrete assurance, to ensure directors are not the last to know.

Resourced boards are instituting: confidential and incented whistle-blowing procedures; audits of internal controls over culture and reputation; and amnesty, among other best practices, to ensure bad news rises. Explicit and monitored thresholds for the board-approved risk appetite framework are being instituted, along with a line of sight by the board that compensation is not driving bad behaviour. Due diligence, climate, values, spot audits, and the code of conduct are all being independently reviewed and reported to committees and boards, without interference or funneling of reporting management. Good boards are much less tolerant of ethical lapses or management blockage.

10. Boardroom Dynamics

Lastly, the board must gel as a team, and, as a team, control management. Any behavior gap – undue influence, reliance, dislike, dysfunction, or even contempt — by one or more directors or managers, introduces information and oversight asymmetry that can and does lead to governance failure. Every seat at and reporting to the board table matters. The pressure here is a toxic or under-performing director who refuses to resign out of self-interest, or a board allowing integrity breaches and leadership shortcomings by an officer to continue.

Good boards: have behaviour matrixes and performance reviews that define and rate behaviours at the board table; have peer reviews and mentoring that develops and refines behaviours; and act on the results regardless of profile or tenure. Due diligence, background checks, interviews, and assessments are all becoming commonplace. Personality testing is also developing.


There have been more governance change occurring in the last five years than in a generation. Enron, WorldCom and other implosions in 2001-02 are very different from the global financial crisis of 2008-09, which: was systemic, involved banking, and required broad government intervention. There is a regulatory and investor appetite for broad and deep governance change. The above 10 changes and responses are touch-points for where governance change is happening the most. Boards and management teams are only about 40 per cent through digesting all of the above reforms, and there are more to come in 2015.