The mandate of Desjardins Group boss Guy Cormier has been extended for a period of up to two years to allow the cooperative to make major governance changes.
Mr. Cormier, who was to leave Desjardins Group in the spring of 2024, sees his mandate extended “no later than March 2026”, while the cooperative prepares to separate the role of chairman of the board of directors and that of chief executive officer. direction.
The separation of functions leads to significant changes at a time when the cooperative must update its 2021-2024 strategic plan, explains Desjardins Group spokesperson Chantal Corbeil in an interview. “There are a lot of governance and regulatory steps that will have to be taken. »
If Mr. Cormier’s departure had not been postponed, the new Chairman of the Board, who will be appointed next spring, would have had the task of quickly finding a new CEO during the period of updating the strategic plan. The change in governance also required regulatory procedures supervised by the Autorité des marchés financiers (AMF).
The members of the board of directors came to the conclusion that a transition period of 24 months would be necessary to ensure a smooth transition. Mr. Cormier, who also holds the role of Chairman of the Board of Directors until the spring of 2024, did not participate in the discussions of the directors leading to the decision to extend his mandate, replies Mr.me Trash.
The decision to separate the two positions currently held by Mr. Cormier was made by Desjardins Group members at its annual meeting in the spring. It follows a reflection of the members and a “wish” of the AMF, recalls Mme Trash. “We have new challenges. When governance was put together, it was in 1994. We didn’t even have 100 billion in assets. We are at 400 billion. We have a lot more responsibilities. »
The next step will be to choose a chairman of the board. The directors who will be elected at the next shareholders’ meeting in March will choose who will be the chairman of the board. The choice should be made in May 2024.
Mr. Cormier, for his part, will continue to serve as CEO until March 2026, “at the latest”. It will be up to the board of directors, and not to the approximately 2,000 delegates representing the members, to choose the next CEO. The delegates retain the power to elect directors.
The decision to postpone the departure of Mr. Cormier would be the right one in the circumstances, according to the director general of the Institute for the governance of private and public organizations, François Dauphin. “It seems justified to me to maintain a certain transition. That would have made two new people arriving. They do not necessarily have the collective memory. The separation of roles will also free Mr. Cormier and his successors from the “very time-consuming” function of chairman of the board.
Professor and co-director of the Center for Economic Law Studies at Laval University Ivan Tchotourian agrees. He adds that the separation of the roles of chairman of the board and chief executive officer is now considered a best practice in terms of governance.
“The Board of Directors plays a strategic role. Of course, by separating the roles, you have a little distance from the management that manages the day-to-day. »
