2003 News Releases

Remarks by David O'Brien, Chairman and Gwyn Morgan, President & CEO

University of Alberta School of Business, Canadian Business Leader Award Edmonton, Alberta - March 13, 2003

David O'Brien

Thank you.

This evening is a very meaningful one for us, ladies and gentlemen, for a number of reasons.

It celebrates the approaching first anniversary of the creation of EnCana.

It places us in a peer group of admirable people whom you have recognized in previous years...

And it has caused us to think about the important qualities of leadership we admire and the relevance of leadership to the future success of Canadian business.

Tonight, Gwyn and I will offer brief comments about these ideas from two lecterns... and a common stage. This fits our respective roles in legacy PanCanadian and Alberta Energy and our complimentary roles within EnCana. In my dealings with Gwyn, I have come to have great respect for his vision, his leadership, and his common-sense, hard-work approach to building a business - a business that is becoming an icon of strength in Canada and North America, and a leader with great potential elsewhere in the world.

Gwyn Morgan

Thank you David, and good evening ladies and gentlemen.

Well, as David said, we are privileged to be granted this honour by the University of Alberta School of Business, and I am doubly pleased to share it with a truly national leader in his time, a man who created extraordinary shareholder value through his leadership of Canadian Pacific, and as a proud Canadian who shared my passion for creating a Canadian-headquartered energy company that could compete shoulder to shoulder with the best in the world.

Now, it won't surprise you to learn that I believe excellence in leadership is critical to us as individuals, to our businesses and organizations, to our country itself. Absolutely critical.

And I think you are likely aware that excellence in leadership is difficult to attain, challenging to maintain and is, at times, harshly judged. All true.

All true, and all as it should be.

Leadership is critical and it does take time to develop and it ought to be scrutinized by all of a leader's stakeholders.

And, while I am offering these thoughts to you, I'm acutely aware of what the mother whale said to her baby - 'When you are spouting is when you are most likely to be harpooned'.

My journey to this lectern tonight began several decades ago as a boy on a farm near Carstairs, just north of Calgary. It was a modest beginning by most measures, and one for which I will always be grateful. Like many of you, I owe my greatest debt to the examples, teachings and leadership of my mother and father.

They taught me some simple lessons. Simple, yet potent lessons... Keep your word. Stay honest. Do your best. If the world deals you a tough blow - pick up and move on.

I didn't know it at the time, but I know now that my modest upbringing was a great gift. It taught me self-reliance and a clear sense of responsibility to those who count on me.

It wasn't long after leaving that town for the big city - including some time at this university -- that I came to realize that the world was full of opportunities to build personal success. I notice that there are a number of students in the audience. I encourage you to not look at starting your career as a problem, but rather as an opportunity. Be optimistic... the world is frustrating at times, but it is also fascinating. Grab what you can. Make the most of it. Give your best, and you'll be surprised what good luck you'll have.

It's only been in the past ten years or so, ladies and gentlemen, that I've come to understand that the biggest sense of fulfilment lies in helping those around you to succeed. No matter what you are doing, as long as you have at least one person working with you, you can succeed only through one another.

So, after three decades, I have reached the stage where my only motivation is to inspire people to achieve their potential, to fulfil their career aspirations, raise their families, and contribute to their communities and country.

And, when it comes to leadership and success, I also believe it is necessary to recognize that we are all interdependent. The gifts we give are the gifts we get.

I believe this is the way that successful, families, communities, companies -- even countries - are built.

David?

David O'Brien

Thank you Gwyn. One sure way for countries to grow stronger is for their businesses to grow stronger, and one way for businesses to stay stronger is through careful attention to leadership. I'd like to focus my thoughts about 'careful attention to leadership' on two levels -- the CEO and the Board of Directors. This arises from my recent experiences.

Why is it, do you think, that some CEOs lead their companies from success to success, while other CEOs fail? To me, it has everything to do with leadership.

In my view, the critical areas of leadership at the CEO level are few:

  • They need to develop leaders at all levels of the organization and choose the right people for the right jobs;
  • They need to encourage the development a coherent strategy... providing clarity of direction in the process; and
  • And they need to lead by making difficult decisions that shape the company's future.

Let me illustrate the last point... leading by making difficult decisions. As CEO of Canadian Pacific, I made two major decisions of proportions that some have called historic. Each of these was extremely difficult.

  • The first decision was to move Canadian Pacific and Canadian Pacific Railway to Western Canada in 1996. This was the largest corporate move in Canadian history in terms of numbers of people and distance involved.
  • The second decision, as you may recall, was to divide Canadian Pacific into five separately traded public companies. This in itself would be been challenging enough. But, in the process, we were breaking up a Canadian icon whose history was tied to the history of Canada itself.
  • Each of these decisions was extremely difficult and I must tell you I agonized over them for several months.
  • A third major decision, but one that was somewhat less difficult, was the creation of EnCana.

While making major decisions is a critical leadership role of a CEO, two less glamorous and more important roles are demonstrating leadership through the development of people and setting the corporation's strategic direction.

In my view, CEOs generally fail not because of a lack of intelligence or vision, but because they don't put the right people in the right jobs and / or fail to deal with people problems in a timely fashion.

Successful CEOs are those who provide clarity of direction and who work with their organizations to craft realistic strategies. Strategies that stretch but that can be achieved. Strategies with intensity and focus. Strategies that make the most of the existing organization, while continuously working to improve the organization.

In short, successful decision-making, people development and strategic plans cannot be imagined, created, managed or measured without excellence in leadership at the CEO level.

Gwyn?

Gwyn Morgan

David has offered his wisdom and experience on leadership at the CEO level, as this is such a critical role for a business. We both know there are other critical roles throughout businesses and organizations.

I'd like to say a few words here that apply to all leaders - I'd like to talk about fusing leadership with ethics. Speaking of ethics, one must always choose one's word's carefully, or there can be real translation problems. I'm reminded of the sign I saw in a Paris hotel which said, 'Please leave your values at the front desk'!

What I will describe over the next few moments will seem to many like common sense, but I think it is very instructive, very powerful.

According to psychologists Lawrence Kohlberg and academic Carol Gilligan, moral development begins in childhood. It advances in stages and provides the basis for decisions about right and wrong over our lifetimes.

All of us - including corporate, political, even religious leaders - reach one level or another of moral development. And this, the two scientists say, affects our ethical decision-making.

Mr. Kolberg pioneered six stages of moral development, and Ms. Gilligan dedicated her work to expanding understanding of human morality. Together, they refined six levels of leadership. I'd like to share them with you briefly now.

Levels one and two represent what they call 'infantile' phases of development. I guess some of us never grow up!

Level 1 - What can I get away with?

Level 2 - What's in it for me?

Levels 3 and 4 show some external practice of moral development, but still no internalized morality.

Level 3 - How does this decision affect my relationships? ...

Level 4 - How does this decision maintain fairness, order and uphold the law?

Now, here at level 4, we're getting close to truly ethical behaviour, but more in deference to authority than from personal conviction.

It's at levels 5 and 6 where we see a fully developed internalized 'moral compass'.

Level 5 - What are my responsibilities to society and others? Leaders here accept obligations to others as a given and tend to view common practices, rules, and dictates with a critical eye. They operate according to inner principles, not based on self-interest, fear of punishment or dogmatic dictates of religion or culture. They have developed as truly ethical leaders.

Level 6 is the 'moral brass ring':

Level 6 - What do I believe is the truly right thing to do? Leaders at this level are deeply aware of their consciences. They are principled and have the courage of their convictions. If rules, laws or societal requirements do not jibe with the leader's conscience, he or she will work to change them through communication and example. They will 'manage by values' and demonstrate ethical behaviour as a fundamental and criteria for all people and organizations they influence. They don't merely walk the talk... they live the talk.

One of the most ethical leaders I ever worked with once said to me, 'Gwyn, you will go a long ways - but always remember this. At the end of the day, the most important thing you'll be left with is your reputation.' I will never forget those words. They reflect a level of moral maturity, and a level of leadership authenticity, which make the most positive differences in the world.

Putting it in oil and gas terms: reputations last longer than reservoirs. The privilege of continuing EnCana's journey demands adherence to values and ethics-based leadership from each of us.

David?

David O'Brien

We've talked about the importance of leadership, examined critical leadership qualities at the CEO level, and explored the universal appeal of moral and ethical leadership. Again, a special note to the students in the crowd. The earlier you choose to adopt these ethical behaviours, the more naturally they will support you and guide through your careers. There will be times when you will be thankful for your moral and ethical compass.

I would like to close our discussion by stepping back from the individual and his journey to talk for a moment about the importance of a more generalized 'Canadian Global Leadership'.

This initiative, of which I have been a strong supporter, had as one of its major themes, the need to create Canadian-based global champions in various sectors of the economy.

Here, I might say the creation of EnCana corporation had a dual purpose. One, to create substantial shareholder value, and second, to create a Canadian-based significant oil and gas company that could be very competitive internationally.

I also take considerable pride in what has been accomplished in making one of the CP spin-offs, Fairmont Hotels & Resorts, an effective Canadian-based international competitor in the hotel sector. And in the last couple of months, another CP spin-off, Fording Coal, has merged to create the second largest metallurgical coal company in the world.

Having said this, I am concerned about the movement out of Canada of important head offices, and along with them important, meaningful and influential head-office jobs.

The solution must come from business and government; each has an important role to play. Governments can ensure that the operating environment - from broad policy through legislation to regulation - governments must ensure that the operating business environment is a competitive one. Business for its part must ensure that it hires, develops and unleashes its best people, and that it develops cohesive plans for profitability in Canada and internationally.

The greatest need in Canada's community of large corporations is having managements and boards that can craft strategies to take their companies beyond this country and become effective international competitors. Our domestic market is small. Any large Canadian company must, at some stage, move beyond Canada if it is grow and prosper.

Leadership from boards of directors can be very important at this juncture in a company's development. In most cases, a board will not be the principal creator of strategy, but a contributor and advisor - to review, counsel, coach and challenge. Properly populated boards can be 'strategic asset boards' that help to dramatically create shareholder value.

A 'strategic asset board' has the following characteristics:

  • It is sized right - to match the simplicity or complexity of the company -- not so small that it is 'clubby' or without diversity, and not so large that you lose that sense of individual responsibility.
  • The board must be knowledgeable and have a range of talents, expertise, occupational and personal backgrounds to bring expertise and diversity to the board table.
  • Third, of course, the board must be independent of management.
  • Fourth, the board must be engaged. It should focus on those issues that have the most leverage in helping the company maximize long-term shareholder value.
  • Finally, the board must be well informed about critical issues, including what steps need to be taken to make the company a leader and break out relative to its major competitors.

In a phrase... a 'strategic asset board' can be a catalyst for innovation and renewal. And, for a Canadian-based company, innovation and renewal is one of the best ways I know to keep its head office planted squarely in Canadian soil.

By way of conclusion, ladies and gentlemen, I'd like to thank you for your time and, to the people of the University of Alberta School of Business, for your consideration of us, and for offering this wonderful joint award.

Gwyn and I have agreed...

We accept! (David and Gwyn speak these two words together.)

We accept with sincere appreciation on behalf of 45,000 former Canadian Pacific employees (now employees of the five CP spin-offs) and the 3,500 current EnCanans working across this great country and throughout the world. It is their dedication, initiative, ethical values and individual leadership that has propelled us to this award tonight.

To them and to you, we say, simply...

'Thank you.' (Both David and Gwyn, together, again.)

ECA stock price

TSX $14.41 Can 0.140

NYSE $11.21 USD 0.100

As of 2017-12-18 16:01. Minimum 15 minute delay