Stromberg: Champion of change

Along the way, Stromberg has become known for her tenacity and dedication to identifying problems in the industry and her work to resolve them.

“I’ve always been ready and willing to do whatever I could to make things happen,” says Stromberg, now chairwoman of the Toronto-based Public Accountants Council for the Province of Ontario. “That’s just part of my nature.”

Stromberg, 70, became known for this strong-willed attitude during her stint as an OSC commissioner from 1991 to 1998 — a role she took on after decades of practising corporate and securities law at Cassels Brock & Blackwell LLP in Toronto. Midway through the 1990s, a time when mutual funds were rapidly gaining popularity, Stromberg was commissioned by Edward Waitzer, then chairman of the OSC, to undertake a review of the investment fund industry.

“At the time we undertook the review of the mutual fund industry, it wasn’t that anything was broken,” explains Waitzer, now a partner at law firm Stikeman Elliott LLP in Toronto. “The industry had grown way beyond its own expectations and way beyond the regulatory framework.”

Waitzer chose Stromberg as the best candidate to conduct the review because of her vast knowledge of the industry and the law, and her willingness to steer her own course. “Glorianne is fiercely independent, in terms of her thinking,” Waitzer says. “She listens to people, but she comes to her own view.”

The result of the review was a groundbreaking report entitled Regulatory Strate­gies for the Mid-’90s: Recommendations for Regulating Investment Funds in Canada. The report called for a slew of regulatory reforms, including the creation of a self-regulatory organization, improved corporate governance for investment funds and improved disclosure requirements, among others. A key theme underlying the recommendations was the need to protect individual investors and enhance consumer knowledge.

This theme was also prominent in two subsequent reports overseen by Stromberg: one on investment funds and consumer protection, commissioned by Industry Canada’s Office of Consumer Affairs; and another on financial services industry regulatory recommendations, prepared for the Organization for Economic Co-operation and Development’s committee on financial markets.

Investor rights groups have praised her work. The Markham, Ont.-based Small Investor Protection Association, an organization committed to fair practices in the investment industry, calls Stromberg a “SIPA Hero” for supporting the needs of small investors in her reports.

Some investors have even offered Stromberg their gratitude in person. On several occasions, Stromberg says, individuals have approached her in public to thank her for her work in advocating change. “To me,” she says, “that made it all worthwhile.”

But Stromberg’s recommendations were considered controversial among other groups. Many mutual fund industry players argued the industry was functioning well, and were unprepared for the extensive changes that Stromberg encouraged. “There was a natural inclination on the part of the industry to say, at the time: ‘If it ain’t broke, don’t fix it’,” says Waitzer. “So, there was some degree of antagonism.”

David Velanoff, president and CEO of Winnipeg-based MGI Financial Inc., who has been in the industry for more than 30 years, says Stromberg’s ideas were simply ahead of their time. “A number of her recommendations were very forward-thinking,” he says. “But probably at the time, they were a little radical in the eyes of the mutual fund industry.”

Upon gathering a group of industry representatives to provide feedback on the recommendations, however, the industry’s tone was more receptive. A steering group of industry players submitted a report to the Canadian Securities Administrators (CSA) in response to Stromberg’s 1995 report, and ultimately supported many of her recommendations.

“When we got together a group of industry leaders to work through it, there wasn’t a lot of substantive disagreement,” says Waitzer. “They basically validated most of what she said.”

As a result, several of Stromberg’s recommendations became the foundation for much of the regulatory reform that was eventually adopted, as well as for changes that are still being shaped. For example, creating a mutual fund industry self-regulatory organization became a key priority for the CSA following the reports, leading to the creation of the Mutual Fund Dealers Association of Canada in 1998. Efforts to improve disclosure requirements have also been underway in the years since her reports, and recently have moved closer to implementation.

Although Stromberg admits that progress on reform has been slow, she’s frustrated by the widespread skepticism within the industry regarding the possibility for change in areas such as securities regulation. “Instead of sitting on the sidelines doubting,” Stromberg says, “why don’t we roll up our sleeves and make sure it happens?”

Her advice for the industry is simple, a caution that is well to keep in mind in a rapidly evolving business: “Don’t be afraid of change.” Rather, she says, “Change before you have to.”