In search of a future CEO | Do you need to be fluent in French to lead CN?

Do you have to speak French to run the most important railway in the country or promise efforts to learn it, if necessary? In search of its next driver, the Montreal-based Canadian National Railway Company (CN) refuses to say whether Molière’s language plays a role in the assessment of its candidates.

Subject to Official Languages ​​Act, the rail carrier is looking for the rare pearl on a “global scale”. Its Chairman and CEO, Jean-Jacques Ruest, 67 years old and bilingual, will soon get off the train to bow out.

But there is no guarantee that his successor will master both of Canada’s official languages. CN could recruit from outside its ranks. In addition, TCI Funds Management, the company’s second largest shareholder (5.2%), wants its candidate to take the helm.

Twice, Press asked the railway company if fluency in French was a criterion for evaluating candidates and if efforts would be required if the choice fell on a unilingual anglophone person.

The changing of the guard comes as French proficiency among business leaders has returned to the forefront since the language storm unleashed by Air Canada President and CEO Michael Rousseau following a speech delivered exclusively in English to business people on November 3.

The outcry had prompted Ian Edwards, big boss of SNC-Lavalin, to postpone a public address scheduled for November 15, citing his inadequate command of French.

A criterion to evaluate

the CN has been run by unilingual Anglophones on numerous occasions since its inception in 1919. In the opinion of governance experts, if CN is serious, it will require that learning French be part of the performance evaluation criteria. of a unilingual leader.

The role of a board of directors is to recruit the best possible candidate, recalls Richard Leblanc, specialist in governance, law and ethics at York University in Toronto. That being said, we must not ignore the question of French, he believes.

“The performance of a [dirigeant unilingue] should be partially assessed on its ability to make progress deemed reasonable, says Leblanc. After 6, 9 or 12 months, a president can be expected to make progress. ”

Enough weight?

The representativeness of Quebec is weak on the board of directors of CN.

Of the 11 directors, Jean-Jacques Ruest is the only member from Quebec. Five are in the United States and the rest are from Ontario, Alberta, British Columbia and Nova Scotia.

“I imagine the other Canadians on the board are aware of the recent controversies,” says Mr.^me Tremblay. It is reasonable to expect this to be an issue raised in the Human Resources and Compensation Committee. ”

The change will not be limited to the President and CEO. There will also be some on the board of directors.

Board Chairman Robert Pace is due to retire next year. TCI Fund Management, which has been critical of the current leadership since the spring, has called for an extraordinary shareholders’ meeting to replace 4 of the 11 board members with nominees it has chosen.

This shareholder wants the reins to be handed over to Jim Vena, who worked for decades for CN. He was COO when he left in June 2016. Until the end of 2020, he was the CEO of US rail carrier Union Pacific.

The London fund did not respond to questions from Press whether Mr. Vena understood French and could express himself in the language. According to Reuters, the main person was able to understand him and speak him “a little” when he worked for CN.

TCI opposed CN’s offensive on Kansas City Southern, which ultimately failed last September, when the US opted for the Canadian Pacific (US $ 31 billion) offer, which carried less regulatory risk. The fund believes that CN should have focused on improving its efficiency rather than attempting to make an expensive acquisition.

Since entering the stock market in 1995, CN has had five chairmen: Paul Tellier (1992-2002), Hunter Harrison (2002-2010), Claude Mongeau (2010-2016), Luc Jobin (2016-2018) and Jean- Jacques Ruest. Mr. Harrison was the only unilingual anglophone.

Potential candidates

Transportation industry analyst Walter Spracklin of RBC Capital Markets recently surveyed client investors about potential candidates. Overview of the probe.

Jim Vena (50%)

A veteran of the rail industry, this former CN executive was at the helm of Union Pacific – the second-largest railway in the United States by revenue in 2020. He is the nominee proposed by TCI Fund Management.

James Cairns (16%)

With CN for almost 20 years, he is currently Vice President of Supply Chain. He is based in Alberta, according to his LinkedIn profile.

Rob Reilly (14%)

After 30 years with US rail giant BNSF Railway, he has worked for CN since 2019 and serves as Chief Operating Officer. He is closely involved in the management of activities.

Ghislain Houle (9%)

Chief Financial Officer for five and a half years, Mr. Houle joined CN in 1997. Some analysts believe CN should opt for a candidate who specializes in business management rather than finance to improve the efficiency ratio. of the company.

Others (11%)

Since CN is casting a wide net, the railroad could choose a candidate whose name was not mentioned by observers. For example, Kansas City Southern executives should be available since the company is to be purchased by Canadian Pacific.