Monique Leroux has set herself no small challenge. The new president and CEO of Lévis, Que.-based Desjardins Group, the dominant player in Quebec’s retail financial services arena, wants to expand the reach of the group. Her aim: “Make Desjardins the most admired financial institution in Canada.”

The first female head of a major financial services institution in Canada, Leroux already has a plan — and is determined to make it a reality.

She is looking to increase Desjardins’ footprint, concentrating on the Greater Montreal Area, in which Desjardins faces stiff competition from the banks, and in Ontario, with ambitions of becoming a bigger player across Canada.

Desjardins is already established in Ontario through its caisses populaires in Franco-Ontarian communities and its 28 Desjardins Credit Union branches. Desjardins Securities Inc., the co-operative’s securities arm; its insurance company, Desjardins Financial Security; and other subsidiaries are also active in Ontario. But for Leroux, that’s not enough.

“It is unthinkable that Desjardins could be present in the Canadian market outside Quebec only through its subsidiaries,” she says. “It takes a presence, and we are going to find the right formula.”

This suggests a bigger presence for Desjardins credit unions in Ontario and in other provinces, as well as encouraging existing credit union clients to buy more of the services provided by the group. It means coaxing them to buy Desjardins insurance, for example, and to entrust their investments to Desjardins Securities.

It would work the other way, too, with customers of the insurance and other Desjardins units joining a caisse or a Desjardins credit union, buying into the co-operative way of managing money. Says Leroux: “That is not at all impossible.”

Leroux has taken the reins from Alban d’Amours, who has stepped down after two four-year terms. Before becoming president and CEO of Desjardins, Leroux was the firm’s senior executive vice president.

Leroux sees Desjardins Securities as a key tool to help Desjardins Group draw clients away from rival institutions. “For me, it is a priority,” she says. She adds that she is annoyed by the chatter on Bay Street that recent departures from Desjardins Securities were regarded as evidence that the co-operative is not committed to its brokerage business.

“It is a volatile business,” she says. “The departures and arrivals happen. Brokers are entrepreneurs, people who often come to an organization not just for its mission and its values but for business opportunities.”

Desjardins ranks just below Canada’s Big Five banks in terms of assets. With $144 billion in assets, Desjardins is ahead of its chief rival in the Quebec market, National Bank of Canada, whose assets total $113 billion. Desjardins posted an average return on equity of 12.3% and a $1.1-billion earnings surplus in 2007. As well, there was a pre-tax $273-million writedown on its non-bank asset-backed commercial paper holdings, and Desjardins paid out $592 million in co-operative dividends to its member-owners.

In a speech to the Desjardins annual meeting in late March, Leroux said the group is “not an enormous cruise ship commanded by a single captain. It’s more like a fleet, in which each ship is directed by a board of directors and a general manager, a fleet in which the federation acts not as the flagship but rather as a lightship.”

The analogy speaks to Desjardins’ unique — and takeover-proof — ownership structure. All its $9.3 billion in equity resides with its “fleet” of caisse populaire branches. Its shares are not traded.

“When we examine the strength of Desjardins, it’s the strength at the base that makes us totally different; it isn’t the federation,” Leroux said after her speech. “It isn’t our insurance companies. It’s our caisses. That is a big difference.”

Born in Montreal’s working-class Hochelaga-Maisonneuve district in 1954, Leroux was spotted as a piano prodigy when she was 11. She studied at the Conservatoire de musique du Québec on a scholarship.

“Music is a bit like the Olympics,” she says. “You have to be among the top. And to be at the top, you can’t just study in Canada. You have to study in the world, the U.S., Europe. And, quite honestly, my parents did not have the means.

“The piano is fantastic,” she adds, “but you are alone with your instrument eight hours a day.” Wanting more from life than music, Leroux decided to study finance.

@page_break@“Maybe it was because I was from a modest milieu, in which every cent counted,” she says. “For me, after music, it was quite clear that I wanted to master finance because I thought it had a determining impact on everything we can do as a society.”

She had a small hurdle to overcome, though. Her conservatory studies had not included the mathematics she needed for finance and accounting.

The universities to which she applied — Laval University in Quebec City and McGill University in Montreal — were prepared to admit her into their doctoral stream in music, but not into their finance programs without the math prerequisites.

One school in the province did come through. The Université du Québec à Chicoutimi designed a catch-up program for her in math.

In Chicoutimi, Monique Forget met Marc Leroux, now managing director of Univalor Inc., a company that funds commercial applications of medical research. They married in the 1970s and now have a 12-year-old daughter, Anne-Sophie.

Monique Leroux graduated with a bachelor of administration degree, and qualified as both a chartered accountant and a certified management accountant. She was working at Ernst & Young LLP in Montreal and teaching at the École des Hautes Études Commerciales business school when Royal Bank of Canada recruited her. She was the first woman president of the Ordre des comptables agrées du Québec, which represents chartered accountants in the province.

Leroux was RBC’s vice president of finance, then senior vice president for Quebec, before moving to Quebecor Inc. in 2000 as senior vice president and chief operating officer. She was recruited by d’Amours in 2001 to whip Desjardins’ insurance interests into shape. She made the insurance arm a money-spinner, with 300% growth in net earnings in the following three years.

In the first mandate under d’Amours, Desjardins created a single federation, ending regional rivalries. Through mergers, the number of caisses was reduced by two-thirds. “The impact of that was that the subsidiaries expanded, the federation took up more space and at the same time the caisses also took up more space in their markets,” Leroux says. “Several of our caisses now can generate surpluses of $15 million a year.”

Leroux does not think a woman would have been selected for the top job at Desjardins if it had followed the practices of the corporate banks, at which the board chooses the CEO and shareholder approval is generally a formality.

In Desjardins’ unique selection process, Leroux was elected after a six-week campaign by a vote of its 256-member electoral college. There were eight candidates, including two other women. “It was a very intense period,” she says. “The whole problem of commercial paper and the electoral process was very stimulating.”

At a recent soirée honouring d’Amours, Leroux displayed her talent as a pianist, playing Erik Satie’s haunting “Gymnopédies.” Former Quebec premier Lucien Bouchard was present.

Bouchard is the chairman of the Montreal Symphony Orchestra, and Leroux also sits on the MSO board. “I know Monique very well,” Bouchard says, calling her a prototype for a generation of women in Quebec who have been taking their place in the professions. “She is very thorough. She gets involved.” IE