Eileen Mercier, appointed to the Ontario Teachers’ Pension Plan (“OTPP”) board in 2005 and named Chair in 2007, has created an important legacy in the Canadian business and pension landscape. Her corporate career is impressive. She started out in communications at the Toronto Stock Exchange and moved to TD Capital Group in the early 1970s, where she was one of only a handful of women. She grew these experiences into general management, taking her career to CanWest, Gulf Canada, and Abitibi-Price, and served on an impressive 28 boards. As Mercier nears the end of her term as Chair of the OTPP board, she spoke to us about her accomplishments, corporate governance, diversity, and her family.

“Mercier supports imposing term limits, but believes that more-polarizing measures such as the board gender quotas that were introduced in the United Kingdom should be a last resort.”

Standing Out

When she started her financial career in the early 1970s, Mercier notes that—with the help of a good sponsor, and during a period of high growth—the opportunities for those who were serious about progression were real. “If you were serious, you could find your way,” she says. I have no doubt she was serious. At that time, a curious, persistent, and determined woman would have stood out. Mercier was unafraid to tell the CEO that a strategic path was wrong. She was also doing her MBA at night school, and she knew that hard work went hand in hand with achievement. In addition, she stresses that “I was brought up to believe you can achieve whatever you want as long as you are willing to pay the price.” By the nature of her role at TD Capital Group, she was involved with senior management as well as the boards of companies that TD had invested in, all of which laid the foundations for the senior roles that would follow.

Speaking about her goals when she first joined the OTPP board, she says, “There was an institution and reputation to protect, and the goal was to make them better.” As she steps down from her role, it is clear she has succeeded. The highlights of her time as Chair speak volumes about her approach to management and her style. She talks of the people, the institution, and its reputation, as well as her role in protecting what had been established and building on it, but most of all she speaks of her desire to see the bright young minds who steer the pension fund today succeed. Over the last decade, she has overseen and supported significant change at OTPP. The OTTP portfolio’s risk–return profile has been changed and extended by expanding its investments geographically and by adding non- traditional asset classes.

Mercier says that understanding risk allows you to manage it intelligently. Accordingly, having risk appetite statements and reviewing them annually is a new and important science. When she speaks of the financial crisis, she warns that the risks of it playing out again are real. She says that the pieces are likely to look different, but it will still be a financial crisis with real ramifications. As the world gets smaller through advances in areas such as communication and cross-investing, it is harder to keep contagion localized. Diversification has many merits, but in times of stress, spillover effects take over, and diversification alone might not save you. Understanding these risks is imperative.

As board members take on increased workloads that include mountains of reading, scrutiny, and responsibility, the role of corporate governance has changed dramatically from Eileen Mercier’s early days. Peter Dey’s work on good governance marked the beginning of what has turned into a sea change in this area, she tells me. The regulatory side is now more onerous, but there are ways to manage it, particularly if board chairs instil in their boards an emphasis on efficiency and focus them on forward-looking discussions and away from rehashing of pre-meeting readings.

When speaking of the future of finance, Mercier points to the demand for strong analytical skills, efficiency of boards, strong corporate governance, and the need for diversity of thought.

The Rise of Diversity

Mercier describes the Ontario Securities Commission’s “comply or explain” reporting requirement as a “typically Canadian framework” and one that should see Canadian firms attempt to comply. However, even this good first step must be taken further should change prove too slow. Mercier supports imposing term limits, but believes that more-polarizing measures such as the board gender quotas that were introduced in the United Kingdom should be a last resort.

Having survived and, more importantly, thrived in the male-dominated industries of paper, oil, and financial services, Mercier is a role model to many. Her pragmatic and logical approach and her hard work are part of her success. However, she did give me pause for thought when she said that she simply never thought anyone would ever say no. Her statement implies that the barriers that forced some to step back were ones she never acknowledged, and therefore, she easily pushed past them.

Mercier also speaks of her children with pride. Having instilled independence and respect in them, she admits that “they might not always have enjoyed my career, but they understood what I wanted to accomplish and the need to do it.” She ends the interview by saying that women should never give up—that instead we need to drive through.

As Mercier steps down, she leaves an important legacy at the OTPP board. However, she also leaves me with the impression that she won’t ever be quite done and that we might all be wise to stop seeing those barriers that get in the way of progress.

The author would like to extend a special thank you to Carol Gordon for her work in arranging the interview.