Winners & Losers 2013

In People: Galen Weston came into his own, Peter Munk headed for the exit, and Sheryl Sandberg Leaned In


Galen Weston

After the fall, the rise

After the devastating collapse of one of its clothing factories in Bangladesh, the Loblaw empire seemed headed for a disastrous year. But Galen Weston rebounded—and then some

Galen Weston

Appointed in 2006, the fourth-generation Weston magnate took years to establish himself as more than a billionaire pitchman. This is the year it happened

(Stan Behal/Toronto Sun/QMI)

On the second of May, Galen G. Weston took the stage at the Loblaw annual shareholders meeting, thanked the assembled crowd, welcomed a group of visiting high-school accounting students and then shot the elephant in the room.

Eight days earlier, the collapse of a Bangladesh factory had killed 1,129 workers; clothes for Loblaw’s Joe Fresh line were made in the facility. Weston, the company’s executive chairman, had made perfunctory remarks during an earnings call about being “deeply shaken” by the disaster, but there was still uncertainty about the grocer’s official response—it could still downplay responsibility or blame subcontractors.

At the investors meeting, however, Weston made clear there would be little of that. “I have to ask myself what role does industry play in propagating a manufacturing culture that would take such risks with people’s lives?” he reflected, speaking with the deliberate cadence of a Presbyterian minister. Flaws in his company’s inspection regime had exposed workers to “unacceptable risk,” he said.

Lasting less than five minutes, Weston’s speech was a heartfelt and candid reflection on corporate responsibility. It was elegant oratory—and not just by the business world’s meagre standards—but what gave the well-crafted words true heft was the tangible plan they outlined to compensate victims and bolster factory inspections.


Soon after, Weston again addressed an audience—working from another transparent podium, standing before another logo-festooned backdrop and wearing the same purple tie. But this time, the topic was a triumphant $12.4-billion deal to purchase Shoppers Drug Mart, creating a combined retail behemoth with $42 billion in revenue, 2,348 stores and one billion customer transactions each year.

“As big as this deal is, it is about an even bigger idea,” he said. “This transaction enables us to harness the complementary strength of Canada’s No. 1 food retailer and Canada’s No. 1 pharmacy retailer, to serve customers better close to where they live and work.”

Galen Weston

Weston’s best move yet, announcing the $12.4 billion Shoppers Drug Mart buyout

(Michael Stewart/WireImage/Getty)

The Shopper’s deal accentuated how Weston—once dismissed as a figurehead—has emerged as a corporate leader of substance. “Anybody who think he’s a puppet leader is very mistaken,” says James Smerdon, vice-president of retail consulting with Colliers. Buying the pharmacy chain represented a “brilliant tactical move,” analyst Doug Stephens told Canadian Business after the deal was announced.

It was a stroke that changed an industry—even a country. Legacies are built over decades and often measured in milestones spread years apart, yet Weston had two career highlights within 10 weeks. Appointed in 2006, the fourth-generation magnate took years to establish himself as more than a billionaire pitchman. This is the year it happened, with Weston making Loblaw into his own—through strategy and hard work, and not just by birthright.

In the early days of his career, nobody seemed impressed with Weston. His great-grandfather George started the dynasty in 1882 with the opening of Weston Bakeries in Toronto. His grandfather Garfield, and father, also named Galen, oversaw decades of expansion. Galen the younger (nicknamed “G2”) received an early apprenticeship in the family business, delivering bread from Weston bakeries to convenience stores as a teenager. His formal education was more prestigious, with an undergraduate degree from Harvard and an MBA from Columbia. After university, he spent eight years working in Loblaw’s No Frills, e-commerce and President’s Choice Financial divisions before becoming “senior vice-president, corporate development.”

As Weston ascended the corporate ranks, the corporation itself was faltering. Loblaw was the largest grocer in Canada, with more than 1,000 stores divided among 22 different banners, but it wasn’t coping well with Walmart’s Canadian insurgency. It had undertaken an unsuccessful retooling of both its supply chain and its inventory. Attempts to make its distribution network more efficient only resulted in delays and inadequate inventory. In 2006 Loblaw reported its first loss in 19 years—and a 33-year-old Weston was appointed to the newly created position of executive chairman.

Galen Weston

Weston's appearances in Loblaw’s ads emphasize old-fashioned values

(Stan Behal/Toronto Sun/QMI)

By virtue of both title and pedigree, Weston immediately became the public face of the company. He was, in truth, part of a troika of executives brought aboard by his father. Allan Leighton, a longtime adviser to the Weston family, was recruited as deputy chairman, while former Canadian Tire executive Mark Foote became president. Even with this support system, not everyone was reassured. “We do not view the recent management changes as instantly positive,” sniffed one analyst report. The new management team acted quickly though, closing 19 stores, 24 wholesale outlets, liquidating inventory and declaring they needed three years to rebuild. 

Seven years later, the initial mission seems almost complete. Overhauling the broken distribution network began in 2007, as the company closed 11 ill-placed distribution centres and opened eight strategically located ones. The end result: 98.8% of its products are available on store shelves at any given time, current president Vicente Trius told analysts last spring. At the same time, the company has rebuilt its information technology systems at the retail level, improving on its ability to manage everything from inventory to human resources.

As it rebuilt its back end, Loblaw also renovated 450 of its locations. The company’s modernized stores matched its next-generation executive chairman—a man who has clearly asserted command of his empire. Indeed, the two men positioned as Weston’s human training wheels had fallen away. Foote left the company in 2008. Leighton, a mentor to Weston, went in 2011. With his departure, Weston alone assumed responsibility for defining the grocery chain’s modern age. His actions in response to the Bangladesh collapse served to highlight a socially conscious approach to business that has been Weston’s hallmark. The crisis made his principles plain, but they have been there since the outset.


Consider the first commercial that Weston filmed for Loblaws. When he first considered becoming the company’s pitchman—as marketing mastermind Dave Nichol had been decades before—his wife dismissed the notion as “cheesy.” Yet he embraced the role with apparent verve, unveiling his first spot in June 2007, touting his company’s commitment to reducing the waste that ends up in landfills—and offering a cheap reusable bag as an alternative. Like Nichol so often did, Weston promised that the change “was worth switching supermarkets for.” The company now boasts it has diverted five billion plastic bags since the start of its campaign.

The notion that strong ethics can drive sales is something Weston has frequently hammered upon. The store’s recent “Edible Conversation” ads feature Weston sitting around a kitchen table with a pair of moms, sipping herbal tea and commiserating about the challenges of a frenzied family life. As Mom No. 1—Emma Waverman—bemoans the difficulty of identifying the healthiest products in the grocery aisle and Mom No. 2—Sharon DeVellis—says she wants products that are low-sodium and higher fibre, Weston segues into a discussion of the 450 Blue Menu products, with lower fat and sodium as well as higher fibre, available at Loblaw’s stores.

“Our philosophy is that if we can encourage people to make healthier choices, one step at a time, then that’s a good part of the journey,” he says. In another ad, he mentions Loblaw’s products will be free of artificial flavours and colours by the end of 2013. Then there’s the series of spots where Weston visits with the farmers who produce Loblaw’s Free From… line of antibiotic-free meats. “There’s more work involved, there’s more time involved,” says hog farmer Eric Hoffer. “But at the end of the day, we’re proud to raise the animals in the way that we do.” As the writer Anne Kingston once observed in Maclean’s, if Nichol sold customers on exotic tastes, Weston sells them on old-fashioned values.

Which made Weston’s response to the Bangladesh crisis both unsurprising and necessary. It was needed to preserve the growing stream of revenue from Joe Fresh. On this crass metric, it seemed to work. One survey conducted immediately after the tragedy showed 26% of past customers said they’d never go back to Joe Fresh, yet the clothing line has remained a strong seller. But it was predictable because Weston clearly sees ethics and economics as inextricably linked. Indeed, the safest move for Loblaw might have been to leave Bangladesh altogether, as Disney and other corporations chose to do.

Weston refused to give up on the notion that commerce could improve the lives of workers. “As the front edge of the wedge in global trade, the apparel industry can be a force for good,” he told shareholders in May. “Properly inspected, well-built factories can help lift people out of poverty in countries like Bangladesh.” So alongside a million dollar charitable donation and a minimum commitment to pay three-months wages to the 3,600 workers at the Joe Fresh subcontractor located in the collapsed building—regardless of whether they worked on the company’s products or not—Loblaw also committed to having its own team of inspectors examine all of its factories, ensuring all facilities met local building codes and a series of other measures. While other brands stayed silent, Weston opened a conversation.

Galen Weston

Weston has embraced the role of company pitchman with verve, although his wife initially dismissed the notion as ‘cheesy’

(Stan Behal/Toronto Sun/QMI)

If his decisive response to the factory collapse protected his family’s legacy, Weston’s purchase of Shoppers Drug Mart represents his attempt to build on it. The second half of 2013 saw Loblaw under pressure, dropping prices—and profit forecasts—as it competes in a marketplace increasingly cluttered by Target and other upstart competitors.

The same period, however, has seen the company launch new initiatives, from an improved loyalty program that already boasts a half-million members to its Choice Properties real estate investment trust (REIT), which has delivered a 6% total return so far since its launch, while the sector as a whole has seen a return of –1%. In any other year, the successful REIT launch would be significant news. But it was marginalia compared with Loblaw’s purchase of Shoppers Drug Mart, which creates a retail giant with six million square metres of floor space. Importantly for Loblaw, its new acquisition’s floor space permeates downtown cores, giving the grocer a new way to sell itself to the growing demographic of condo-dwelling urbanites.

There are other boons for Loblaw—such as access to consumer data gleaned from Shoppers’ popular Optimum loyalty program—but aside from any individual benefits, the deal was a monumental fulfillment of Weston’s personal vision for his company’s future. “I’ve long believed becoming a Canadian health and wellness and nutrition champion represented the most powerful next chapter for Loblaw,” he said. Looking back now, Weston’s public comments are indeed littered with the gut instincts that led to this deal—from telling an interviewer five years ago that the company’s future growth would rest on “healthy” products to those staged conversations with the moms in recent ads.

The Shoppers deal isn’t even the only foray in that direction; Loblaw this summer confirmed plans to test a new health-food concept called Nutshell Live Life Well to challenge Whole Foods. Once again, it’s a plan built on principle, the idea that making customers healthier can drive profits. The Shoppers deal is not without risk: it will reduce George Weston Ltd.’s interest in Loblaw from 63% to 46%. But as Weston announced it, he emphasized he was building on his family’s legacy, not diminishing it.

“When we launched our President’s Choice and No Name house brands, we changed how Canadians view private label. President’s Choice Financial changed how Canadians bank, and Joe Fresh changed affordable apparel for Canadians,” he said. The purchase of Shoppers was his first addition to this list of familial accomplishments. In 2013, Galen G. Weston began to define what his family name will mean in the future, rather than be defined by what it has meant in the past.

The Year in bad executive behaviour

In 2013 business leaders around the world exhibited all of the seven deadly sins—as well as one or two new ones

Tim Armstrong

Wrath: Tim Armstrong

There are no ideal circumstances under which to be fired from one’s job. But it was a new low in corporate cruelty when Tim Armstrong, AOL’s chief executive officer, brutally sacked one of his senior staffers during a conference call with about 1,000 employees listening on the line. Abel Lenz got the axe when he pulled out a video camera to record the occasion which, ironically, had been organized to prepare staff for upcoming cost cuts.

Richard Nanula

Lust: Richard Nanula

He was once considered Disney`s financial darling; a brilliant young strategist with a low-key conservative style that made him one of the most sought-after executives in corporate America. These days, Richard Nanula is better known as “Mr. Rich,” the male star of sexually explicit porn videos he allegedly filmed himself. The 53-year-old resigned as chairman of the Miramax film company and a principal at the private equity firm Colony Capital in July after the videos went public online.

Guido Barillo

Pride: Guido Barillo

Guido Barillo, head of the family-owned Barillo Group, found himself in plenty of hot water after telling an Italian radio host that homosexual families had no place in his pasta empire’s advertising. The saucy comments proved unpalatable to noodle lovers, gay and straight, including actress Mia Farrow, who joined in a widespread boycott of the brand. Barillo later reached out to the gay community in a video apology, admitting he had much to learn about the modern family.

Bob Benmosche

Greed: Bob Benmosche

Even AIG chief Bob Benmosche had to concede he chose his wording poorly when, in a media interview, he likened public outrage over bonuses paid to bankers post-2008 to lynch mobs that terrorized and murdered thousands of African-Americans in the southern United States. Reaction to what many perceived as unconscionably callous comments was swift and sharp. So, too, was Benmosche’s apology as he sought to quiet calls for his resignation. “I never meant to offend anyone by it,” he said.

Kevin Wallace

Gluttony: Kevin Wallace

Former SNC-Lavalin executive Kevin Wallace became the latest, and most senior, employee with the Montreal-based engineering firm to be charged with bribery in connection to a multi-billion-dollar bridge-construction project in Bangladesh. Wallace, who was fired from his vice-president post last December, has maintained his innocence pending a trial, and has filed a wrongful dismissal suit against SNC. Two other former workers, as well as two foreign businessmen, face similar charges related to the international scandal.

Rebekah Brooks

Phone Hacking: Rebekah Brooks

As the headline-making trial of the former News of the World editor began this fall, one thing was clear: even if Rebekah Brooks isn’t convicted of charges that include conspiracy to phone hack, conspiracy to commit misconduct in public office, and perverting the course of justice, her name will forever be linked with the scandal that has rocked Rupert Murdoch’s media empire—and cost News Corp. an estimated $382 million as of June 30.

Clayton Woitas

F-Bombing: Clayton Woitas

Encana’s Clayton Woitas, the interim chief of the country’s largest natural gas producer, fuelled a minor diplomatic fracas when someone on his end of a recorded conference call whispered the words “fucking asshole” during a conversation with an investment analyst. Woitas never admitted he was responsible for the colourful language, but the company issued a statement acknowledging “something like that should never have been said.”


Peter Munk

Peter Munk’s long goodbye

The founder of Barrick Gold built a powerhouse that’s now a chronic underperformer. Time to go

Peter Munk

Peter Munk’s once-strong reputation is now in tatters

(Chris Young/Canadian Press)

At Barrick Gold’s annual general meeting in April, Peter Munk turned on the charm in an attempt to sway shareholders to his point of view. Some major pension funds, including the Ontario Teachers’ Pension Plan and the Canada Pension Plan Investment Board, had previously announced they would oppose a huge pay package for board co-chair John Thornton, who was recently hired and issued a signing bonus of US$11.9 million. In a speech, Munk explained the company could have spent the money on industrial mining shovels, but “I promise you, John will do more for Barrick than six more shovels.”

The gambit failed, and shareholders opposed the package. The vote was non-binding and therefore symbolic, but it represented a rift between Munk and the shareholders who support the gold mining company he co-founded.

It seems almost unfair to brand Munk as a loser. The 86-year-old has accomplished truly great things in business, and he’s a generous philanthropist to boot. But the company he founded has been a perennial underperformer for some time. Its stock price plunged 50% this year, and even though gold has taken a beating, many of the company’s problems are of its own making. Munk, as co-chair of the company, found himself in the crosshairs of aggrieved investors in 2013.


The major complaint among shareholders is that Barrick is a terrible manager of capital. In 2011 it paid $7.3 billion for copper miner Equinox Minerals—at the top of the commodities market. Some investors fumed that Barrick overpaid. (The company’s CEO at the time, Aaron Regent, took the fall and was replaced—not Munk.) The company was forced to take a painful $3.8-billion writedown on its copper mining business in February.

Meanwhile, its massive gold project on the Chile-Argentina border, Pascua-Lama, has been beset with delays, cost overruns, and legal challenges. Barrick plowed ahead developing the mine, even with some investors and analysts calling for the company to put it on hold. It finally suspended Pascua-Lama in October, but vowed to revive it when conditions improve.

Blame for Barrick’s operational problems has been directed at the company’s board, and Munk specifically. Mike Morris of Two Fish Management, a Barrick investor, pushed for change throughout the year. “You’ve got to get a new board in there to look at the company from a fresh perspective,” he said recently.

Several of the existing board members are longtime friends and associates of Munk, including former prime minister Brian Mulroney. But in a November filing, Barrick stated it’s looking at the “rejuvenation of the board” and a “succession in the chairman role at the company.”

No timeline was given, but rumours were swirling in early December that Munk would turn over the chairman role to Thornton, and that further board changes were coming. The timing and circumstances are unfortunate for Munk—his once strong reputation is already in tatters. Now it’s time for a graceful goodbye.

Women in business

We’ll have what she’s having

Sheryl Sandberg ‘leaned in,’ Marissa Mayer rocked Yahoo, and the corporate world suddenly woke up to the potential of women

Marissa Mayer
Yahoo! CEO Marissa Mayer

David Paul Morris/Bloomberg/Getty

You could argue that 2013 will be remembered, in the Annals of Women in Business, just like every other: the year that changed everything, and the year nothing changed. The top business bestseller of 2013 was Sheryl Sandberg’s über-ubiquitous confidence-booster Lean In: Women, Work, and the Will To Lead. Not far down the list, however, lie such books as Nice Girls Don’t Get the Corner Office and Mean Girls at Work: How to Stay Professional When Things Get Personal, titles steeped in the enduring stereotype of the vindictive female boss—and the perfect books to mark the 25th anniversary of the movie Working Girl. Ladies, raise your glass of white grenache! Here’s to a quarter century of progress in the workplace!

And yet, there are many reasons to believe the scales truly did tip this year, heavily, in women’s favour, and it starts with Sandberg’s tome. Lean In is a true category buster: a business book, self-help manual, ersatz-spiritual guidebook and feminist manifesto all rolled into one. Sandberg’s core message, in a nutshell, is that women are hampered by self-doubt. Her solution is for them to be more ambitious—to “lean in” to their careers—and not to sweat the work-life-balance small stuff. Some critics derided the book for relying heavily on life-coaching bromides while ignoring systemic discrimination against women. Yet it’s not so much what Sandberg wrote, but the way it was received, that signalled the sea change. It’s clear now that Lean In isn’t just a book. It’s a social phenomenon.


Firms embraced its message with relish: corporate titans such as Cisco CEO John Chambers and PriceWaterhouseCoopers chairman Bob Moritz rushed to establish Lean In Circles in their workplaces. Lean In precipitated the broad acknowledgment that women’s issues—now redefined as women’s ambitions—could no longer be sloughed off to the HR department or addressed with a couple extra weeks of paid mat leave. And men reacted to Lean In not by getting their backs up but by engaging its premise and even joining the Lean In Circles—visible minorities in particular, many of whom felt the book was addressing them too.

These reactions are all evidence of a demographically propelled shift in the business world. It’s no coincidence that the two female executives who have captured the public imagination this year work for technology firms: Sandberg, who was head of global sales at Google before joining Facebook as its chief operating officer, and Marissa Mayer, CEO of a resurgent Yahoo Inc. (the company’s stock has risen 130% since she took the helm). While many have focused on the old-school feminist narrative behind their rise to power—they are the rare women to make it in male-dominated Silicon Valley—the truth is that the tech industry’s workforce skews toward young, millennial workers, a generation that lives and breathes values of egalitarianism, civic engagement and openness. So while rank-and-file techies are heavily male, they don’t bring with them the same prejudices as older workforces in, say, the automotive industry.

Sheryl Sandberg
Facebook COO Sheryl Sandberg

Erin Lubin/Bloomberg/Getty

At Facebook, Google, and many of their high-tech web-based counterparts, the median age of employees is under 30—a demographic profile that’s matched only by restaurants and shoe stores, according to the U.S. Bureau of Labor Statistics. But the reality is that, in due time, every company’s workforce will be overrun with millennials, which will force corporate values to change accordingly. In the interim, tech firms have become such a powerful incubator of C-Suite women that last year, Forbes added a tech category to its list of the world’s 100 most powerful women. This year’s roster included Sandberg, Mayer, IBM CEO Ginni Rometty and Hewlett Packard CEO Meg Whitman.

Forbes’s list also included a record number of women entrepreneurs, from mainstay Oprah Winfrey to Spanx founder Sara Blakely, the world’s youngest self-made billionaire at age 42. They are merely the tip of the iceberg: women are flooding the ranks of entrepreneurs. A report this year by American Express found that, since 1997, the number of businesses in the United States increased by 41%, but the number of women-owned companies increased by 59%. That same study offered hopeful signs that women are now growing their businesses like never before: in terms of employment and revenue growth, women-owned ventures outpaced every other category except the largest publicly traded firms.

That’s not to say women made no inroads with the old-boys economy of blue-chip companies. Here in Canada, RBC became the first of the big banks to cross the gender divide, choosing former Four Seasons CEO Kathleen Taylor as the new chair of its board of directors. Her appointment was hailed by many who have pointed out for years that Canada lags most other countries—including Poland and Turkey—when it comes to female representation in the boardroom. This fall, efforts to change that gained serious traction: the Ontario Securities Commission announced it wants TSX-listed companies to disclose the steps they are taking to increase the number of women at the highest executive ranks, including on boards of directors.

The OSC’s move is long overdue. Evidence shows that firms with women on their boards are better run. A study out of UBC’s Sauder School of Business made international headlines in November for its findings: women corporate directors are less motivated than men by vain considerations such as empire building, and less likely to destroy shareholder value in merger-and-acquisition deals. That UBC study was just one of a spate of experiments showing women might just be more adept and more ethical than men in all aspects of their work. The September issue of Harvard Business Review—a special edition devoted to research on women in the workplace—highlighted a study in which participants were asked if they would be willing to do things such as publicize the mistakes of a talented subordinate to hold their ambition in check. The results showed that women displayed far more outrage at such behaviour, believing it to be both morally wrong and bad for business.

No wonder millennials are happy to welcome them into the C-Suite as their bosses. Who the hell wants to work for a man anymore?

Rob Ford

Rob’s world of rejection

This year a handful of companies publicly distanced themselves from the unravelling mayor of Toronto with “Dear Rob” messages: “It’s not us, it’s you”

Rob Ford

Ford Motors

Ford MotorsNot long after Mayor Ford had admitted to have smoked crack, he was caught signing “Ford Nation” T-shirts emblazoned with the company’s iconic blue oval. “Ford did not grant permission for use of its logo,” a Ford spokesperson told Bloomberg. Ford doesn’t even drive a Ford. He drives a Cadillac.

Iceberg Vodka

Iceberg VodkaIn recent years, Ford has been photographed buying bottles of Iceberg Vodka. When staffers told police that not only does Ford occasionally drink and drive, he reputedly guzzles and drives, the Newfoundland-based company released a statement condemning driving under the influence. Hey, at least he bought Canadian.

The Argos

Toronto Argonauts LogoIt may not have been the stupidest thing someone’s ever said while wearing a football jersey, but when Rob Ford told the world that his, um, sexual appetite was satisfied at home, he did it while wearing an Argonauts jersey. Unimpressed, the team said his leadership was “unseemly at best.”

Canadian Tire

Following Sun News Network’s debut of Ford Nation, Canadian Tire felt compelled to say it “won’t be advertising on Ford Nation and are asking our manufacturers to not use our logos on the show.” It seems an ad from Rockwell Tools featured the Canadian Tire logo. No biggie. The show was cancelled the next day.

Santa Claus

Santa ClausSanta Claus: The mayor was asked to stay away from this year’s Toronto Santa Claus Parade, to “put the focus back on Santa and Mrs. Claus.” Unfair, since the mayor has been nothing if not jolly.

Chip Wilson

Chip Wilson’s Dos and Don’ts

Lululemon founder Chip Wilson is one of Canada’s wealthiest and most successful entrepreneurs. He’s also a walking PR disaster

Chip Wilson

DO: Insult your customers

In a TV interview in November, Wilson suggested that chubby women were to blame for problems with Lululemon’s signature —and inadvertently see-through—yoga pants. “It’s really about the rubbing through the thighs,” he said.

DON’T: Sound like you mean it when you apologize

After his comments drew a massive public outcry, Wilson posted a video apologizing—not to anyone he might have insulted, but to Lululemon employees for any inconvenience his comments might have caused them.

DO: Step away

Though he still chairs Lululemon’s board, Wilson hasn’t held an executive role with the company since 2012.

DON’T: Step very far

After a massive product recall this spring, he reportedly dove back into the day-to-day operations of the company. Star CEO Christine Day announced her resignation in May shortly after.

DO: Diversify

Wilson and his wife Shannon launched whil, a meditation-themed startup, in 2013.

DON’T: Exclude your portfolio

Wilson has downsized his Lululemon stake this year, unloading more than $200-million worth of stock and announcing plans to dump another $250 million in company shares in the near future.