With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/1388249
matters of the moment, while keep- ing an eye firmly on the future. For many companies, the filter of ESG— environmental, social and governance issues—has become vital to decision- making, both at the board and manage- ment level. And while last year forced many to focus on the S of ESG—as the pandemic and racial strife ripped through society—2021 seems likely to bring the E back into focus. (To wit: Fink recently made a company's com- mitment to net-zero emissions a condi- tion for investment by BlackRock.) By late spring, it was clear that the tide had really turned: Royal Dutch Shell got a court order to shrink its greenhouse gas emissions, while activ- ist investors pushed fellow oil giants Chevron Corp. and ExxonMobil Corp. in the same direction. But having "a strong sense of pur- pose and a long-term approach" is about more than just ESG. It's also about who makes it onto the board, what their motivations and skill sets are, and how they view their roles as directors. And according to the follow- ing three leaders of B.C. businesses— each with intimate board experience, and each with a unique take on how a company should be governed for long- term success—the question of purpose has never been more important. Chip Wilson Founder, Lululemon Athletica CEO, 1998–2005 Board member, 2005-15 (chair, 2007-13) For Chip Wilson, the challenge of corpo- rate governance—something he's struggled with since 2005, when he sold 49 percent of Lululemon to a group of VC investors—is the challenge faced by every entrepreneur: how to let go as your company grows. "I got to appoint the CEO, which was a verbal commitment that I received," recalls Wilson of the decision to bring in outside investors and the company's first external chief executive, Christine Day. "But I lost control of the board. What I didn't realize—and what I coach a lot of people on—is that it doesn't really matter when you sell to private equity and set up a private board. What really matters, at that particular time, is how it gets set up for when you go public." That happened two years later, in 2007, when Lululemon listed on the NAS- DAQ Stock Exchange. In Wilson's telling, it became a losing battle to maintain the sort of creative input that had been criti- cal to Lululemon's early success. "What I observed was that the type of people that a board attracts—especially for a U.S. com- pany—is to set up [to defend] against litiga- tion. I would say it's 'control, risk-averse, metric-driven.'" Though no longer on the board, Wil- son remains a vocal minority shareholder, with an 8.5-percent stake. He's particularly critical of how much attention has been paid, post- IPO, to finding the right person to sit on the audit or compensation or gov- ernance committee—and how little to the "creative, brand side" of Lululemon, which he argues represents 80 percent of its value. "If you're only one voice, as I was, against eight, then it's very difficult for a public company to be great. The mechanisms to keep it mediocre are just too strong." When Lululemon was formed, says Wil- son, the aim was to build a "social move- ment company"—so the S in ESG has always been core to its identity. He notes that it also played a pioneering role in gender diver- sity—"we were the first company to have a woman-dominated board of directors; our first CEO was a woman"—but otherwise is unwilling to weigh in on issues of repre- sentation at modern-day Lululemon: "Any- thing I say can be misconstrued, in so many ways." (Lululemon had no comment.) In other ways, Wilson feels liberated since leaving the Lululemon board in 2015. "Now I can go to the AGM and ask ques- tions in public, in a way that I can't move LINDSAY SIU JULY/AUGUST 2021 BCBUSINESS 109 "If you're only one voice, as I was, against eight, then it's very difficult for a public company to be great. The mechanisms to keep it mediocre are just too strong" –Chip Wilson CHIPPING AWAY Lululemon founder Chip Wilson ended up at odds with the board of directors