With an armful of consultants’ reports to use as how-to guides on damage repair, the new chairman of the Alberta Securities Commission says it’s time to get on with re-establishing the regulator’s reputation.
“The first challenge was to get the people who work here through a stressful time,” says Bill Rice, who took the reins of the Calgary-based regulator on July 18. “Get them refocused on their jobs, let them feel relaxed about their environment and see them start looking forward without being apprehensive about the next media story.
“Then it’s back to business as usual,” says Rice, who came to the regulatory position from his role as managing director at Calgary law firm Bennett Jones LLP. “The focus is on building as effective and efficient a regulator as possible, and re-establishing the ASC’s reputation.”
Whether they are optimistic or pessimistic, stakeholders and pundits are reserving judgment about whether Rice, a veteran industry lawyer, will be able to restore the regulator’s reputation to its former sheen. Everyone agrees that Rice has a challenging job.
For his part, Rice knows he quickly has to shore up the ASC’s capital markets and enforcement team, hopefully within the next six months. Many positions were left vacant under the previous regime after several members of the management team and some staff quit or were fired during the regulator’s dark times.
Some vacancies have been filled. Karl Horn was appointed general counsel at the end of the summer, and Siobahn Vinish is now director of communications and investor education.
But important positions in legal policy and capital markets are only temporarily filled. “We’re contemplating a bit of reorganization on the capital markets side,” says Rice. “Until we have that role properly defined, we won’t try to fill the spots. We don’t know what they will be.”
Last week, a consultant delivered a report, begun months ago, before Rice’s arrival, to the ASC about its human resources concerns. After dozens of staff interviews, the consultant’s findings surprised no one, says Rice: “Clearer, more consistent, constant communication is a constant theme [of the report].
“We have made an effort in re-establishing credibility and good faith, and that will continue to take some time,” he adds.
Management shared the findings with its staff, which, he says, pleased them. He is
certain staff are waiting to see how management follows up with the report. “It was a subject that was important and serious for them,” he says.
Rice also looks forward to the delivery of another report by Richard Chambers,
president of AssetRisk Advisory Inc. in Toronto. Chambers will offer recommendations about how to improve or build upon the regulator’s procedures and processes. (The same consultant delivered a 48-point report to the Investment Dealers Association of Canada last year.)
“We’ll have a lot to work with, and we’re at a point at which analysis is complete,
recommendations will be made and it will be up to us to make good use of them,” Rice says.
The concern now, as with any form of regulation, is whether the rules and procedures
can be co-opted by the most powerful among those being regulated — in this instance, high-flying issuers from the oilpatch in Alberta. The same skeptical eye might be cast on the big banks’ domination in Ontario, for example.
Rice knows the story, but he doesn’t buy it.
“It’s a matter of professionalism, personal integrity and people accepting that jobs need to be done,” says Rice. “Mine happens to be one in which I have responsibility for securities regulations and the oversight of capital markets here. I think that people who know one another very well in organizations have to make decisions and tough calls that aren’t very popular — ones that don’t win them points with their friends — and they make them. They make them all the time.”
Rice adds that at Bennett Jones he continually made tough decisions regarding people who were his associates for 30 years: “I think that people who work in business understand those realities and expect that people will do their jobs professionally and live up to company standards.”
Barely a quarter of a year into his new job, Rice, who was born in Amherst, N.S., and grew up in Montreal, admits he has directed some of his stress at a few golf balls, and regrets that he has had to cut back his personal cycling time. It’s been difficult, he says.
@page_break@By the time Rice took the job, the regulator had been served notice with a $1.3-million wrongful dismissal suit that it is still defending. The suit, which also names Alberta Finance Minister Shirley McClellan, was filed by the former head of administration, one of a group of managers and employees who filed a confidential report to the minister complaining of favouritism and sexism under former chairman Steven Sibold.
Around the same time, some staff resigned and others were fired.
When suggestions swirled that the regulator was applying its enforcement powers
unevenly, McClellan declared that the ASC’s practices were sound but ordered the province’s auditor general, Fred Dunn, to complete an operations review. She also ordered an independent enforcement audit — the one by AssetRisk Advisory — just to be certain.
Early in October, as things were starting to cool off, Dunn criticized the regulator for lax dinner-and-drinks spending habits under Sibold’s leadership. Sibold is a longtime friend and colleague of Rice.
Rice, at least, wasn’t around when the fiasco started and he doesn’t have to answer
personally for the past. “I do have the advantage of being able to look forward,” he says.
Faced with a list of controversies that could dominate the headlines for a while longer,
Rice leans heavily on his management experience at Bennett Jones. He admits that the media scrutiny of a public institution is a pressure with which he never had to contend in his former job, which he still considers the tougher of the two positions.
“Well, with some sense of humour about it, I have my doubts that I will ever undertake as difficult a job as the last one I had,” says Rice.
The personalities and intellects of the professionals and the clients with whom he worked at the law firm have prepared him for the people he is now managing at the
provincial regulator, he adds.
He knows that his relationship with the old guard, particularly with Sibold, may rankle
some individuals. But, Rice says, he has a great deal of respect for the former chairman and expects to be able to maintain a solid professional relationship with him. But, Rice adds, he “has to be sensitive.”
Rice says that regulators have a difficult balance to maintain, with concern for investor protection on one side, and effective and strong capital markets on the other. “I honestly haven’t observed any lack of confidence in the ASC,” he says.
“I do believe that, in respect to individuals who have been dealing with the organization, it has been as responsive as ever and has done the same job it always did in the past, and so people are reassured that we have a strong operating and functioning organization.”
As if internal and provincial pressures were not enough for Rice to handle in his first few months on the job, the talk in Ottawa about a national securities regulator has never been louder. The industry, as well as its clients, seem to agree that it is expensive and pointless to maintain 13 separate regulators, but some of the provinces refuse to let go of their regulatory power.
As a stop-gap, provincial regulators (excepting Ontario) have developed the so-called “passport system,” by which provinces respect the rulings and applications that have been made in other jurisdictions.
Rice is stepping back from earlier comments he made that he sees no evidence that a national regulator is needed.
“From my observation, I believe that our current system works very well,” he says. “So when I say ‘not need,’ I’m saying I don’t think we have a broken system that needs a dramatic fix.
“Our position would be that we should undertake strong efforts to co-ordinate and harmonize legislation, policy, rules applicable to securities regulation in the country; and, to the greatest degree possible, co-ordinate and unify the manner in which those rules are applied,” he adds. “If, somewhere down the road, that takes a national securities commission, and that is in the best interest of the capital markets of Alberta, that would be the direction everyone would take.”
Rice is looking forward to getting back on the road cycling. The sooner he can make that happen, he says, the happier and healthier he will be: “The more I can do that, the more relaxed I will be a stressful business environment.” IE
New ASC chairman starts to wield his broom
Bill Rice is relying on his law firm management experience as he cleans up the scandal-plagued regulator
- By: Gavin Adamson
- November 3, 2005 November 3, 2005
- 13:49