2022 Year in Review: Alberta Board/Executive Search and Advisory Lens

In a bold departure from my annual and usually solo re-watching of the 1988 holiday classic “Die Hard,” this year I insisted the family watch Ryan Reynolds' and Will Ferrell’s “Spirited.”

Not usually fans of musicals, we ignored the warning embedded in the film’s description, “a musical version of Charles Dickens' story of a miserly misanthrope who's taken on a magical journey,” and nervously pressed ‘play.’

Prior to watching the film, I had planned to end my annual tradition of sharing a Year-In-Review at only 2 years. Like my stepdad who is convinced he causes storms by washing his truck, I began to worry that my annual missive – initially intended to put a terrible, horrible, no good, very bad year behind us in 2020 – was somehow causing worse events than those I was attempting to cathartically acknowledge and move past. I actually ended my 2021 synopsis saying, “that’s why I enter 2022 with more optimism than ever…history teaches us that humanity’s brightest periods often follow its darkest.” Apparently the universe was scrolling through 2nd rate LinkedIn posts and decided, “challenge accepted!”

But watching the uplifting and entertaining film, my unofficial and rarely used History minor kicked in; I realized we are simply being visited by Dickensian ghosts of Christmases past. None of what we’ve experienced is remotely unprecedented. Racism, pestilence, misogyny, uprisings, senseless war (geopolitical and cultural), inflation and environmental disasters all made headlines in the 1900s. So I chose to follow the wise words of Queen Elizabeth II, who we mourned in 2022, ?“when life seems hard, the courageous do not lie down and accept defeat; instead, they are all the more determined to struggle for a better future.”

Once again, I will attempt to proactively answer the question most frequently asked of search consultants, “what are you seeing?”

Based in Alberta, I will focus primarily on the themes we saw locally while highlighting where our work connected to broader national or international trends.

We began the year focused on adding capacity. Despite anemic growth in the Alberta economy for most of the 6 years since launching the Calgary office, demand for our services continued to grow. We planned for and ultimately executed on a plan to add fantastic new colleagues in Calgary. With additional capacity came more impact from our diverse team. Three new colleagues and far more in-person meetings brought energy to the Calgary office that had only occasionally been fully utilized since March of 2020.?

The trend we saw in 2021 of economic diversification in Alberta catalyzed by venture and private equity accelerated and continued throughout 2022. A diverse portfolio of projects spanning financial services, transportation and logistics, oil & gas and renewables kept us busy while the Winter Olympics and several positive headlines – reduced COVID isolation periods, a $40B settlement over the Indigenous child-welfare system and economic tailwinds for the province – distracted us from increasing concerns about Putin’s intentions in Crimea and domestic tension over ongoing COVID restrictions. Functionally, we continued to see a surge in demand in finance, supply chain, capital projects and board diversity.

While domestic reaction to the “Freedom Convoy” in February was polarized, I was intrigued by how many of my international colleagues reacted to coverage in their countries portraying this level of Canadian dissent as clearly signaling a mainstream perspective that COVID restrictions had gone too far, for too long. It seemed less dismissed as a far-right movement, and more a galvanization of broader discontent. As one international colleague observed, “if Canadians are getting angry, politicians better take notice.” Not coincidentally, government relations, communications, age diversity and regional diversity were more emphasized, particularly in the natural resource/energy sector, as boards sought to better understand the social and political trends corporations must navigate.

The quarter ended with a continuation of large, Calgary-oriented deals: Enerflex, WestJet and Shaw all announced large transactions while $100 oil on Valentine’s Day was surely a boon to high-end Alberta restaurants. It felt like a boost though, not a boom, as continued anxiety and uncertainty permeated board rooms where directors thought deeply about governance and the role of boards in the midst of so many black swan events and fresh on the heels of the Elizabeth Holmes guilty verdict. Indeed, board assessment, succession planning and recruitment became a far higher percent of our workload than in previous years; certainly an ongoing trend as pressure from institutional shareholders and proxy advisors manifested as withheld votes for boards not moving fast enough on diversity and board renewal, and also a reflection of the increased expectations of corporations to create value for a broader group of societal stakeholders.

Mid-year, we were again tapped by numerous financial sponsors to recruit executive/board talent for their portfolio companies. CFO was the most prominent while CEO and independent director searches followed closely behind. Industry diversity also continued with the Calgary office simultaneously leading engagements in financial services, energy infrastructure, discrete manufacturing and distribution. Energy transition remained a core driver of our workload, but with more of a balance between large incumbents and startups. Reforestation, renewable power generation, lithium, helium and carbon capture companies simultaneously engaged us for searches in project/corporate development and finance, operations, CEO, independent director and financial officer projects.

As summer wound down, we noticed an interesting shift in our portfolio of projects. Technology (both functionally and as an industry) gained momentum prompting us to engage colleagues in other offices who specialize in the area. Health care surged again as PE continues to invest in an industry seemingly overdue for innovation and disruption. Many oil and gas companies thrived from a cash flow and balance sheet perspective, but production growth remained constrained. As in other industries across Canada, oil & gas experienced “The Great Retirement” far more than “The Great Resignation.” This drove demand for board and executive talent in oil and gas, still one of Canada’s largest industries by share of GDP. And Whitecap’s (a Canadian oil and gas production company also leading in CO2 sequestration) $1.7B acquisition of XTO Energy Canada furthered the trend of excellent assets consolidating under responsible Canadian names with exceptional management teams and balance sheets.

Politically in the Fall of 2022, and perhaps as a lagging indicator of the dissent underlying the Freedom Convoy, we observed Premier Jason Kenney resign and Pierre Poilievre leap in polls. I suspect Jason Kenney will be judged less harshly in the future given the impossibly small needle he tried to thread between various factions in his own party. Regardless of political affiliation, I think most Canadians, whom I believe to be mostly centrist, recognized wisdom in these lines from his resignation letter.

"I am concerned that our democratic life is veering away from ordinary prudential debate towards a polarization that undermines our bedrock institutions and principles….From the far left we see efforts to cancel our history, delegitimize?our historically grounded institutions and customs, and divide society dangerously along identity lines. And from the far right we see a vengeful anger and toxic cynicism which often seeks to tear things down, rather than build up and improve our imperfect institutions."?

Fall and early Winter saw continued and even accelerated talent demand in traditional western Canadian industries such as conventional and unconventional oil and gas, chemicals, mining, agriculture and industrial construction/services but with a healthy mix of technology, B2C and healthcare/life science remaining part of our current workload and funnel for 2023.

Oh…and Danielle Smith became Premier just as Alberta moved back into the black, crypto/blockchain was volatile…like really, really volatile…Elon Musk was…volatile…and Justin Trudeau rejected Europe’s desperate pleas for Canadian Natural Gas…there was probably more, but I’m done with 2022.

So what?

Can I just conclude by saying, “I have no idea?”

As I researched the wildly divergent views of actual learned pundits, I realized people way smarter than me have no idea what is to come and no existing models to apply to the novel scenarios that continue to arise.

Most agree that geopolitical tension, political polarization, trade/supply chain issues, inflation and high interest rates remain through much of 2023 and contribute to a recession that we may or may not already be in - some say deep and long, others insist short and shallow. There is also general consensus that we have entered a turbulent phase in human history following what many describe as decades of relative stability dating back to the end of WWII. So much for the “roaring 2020s” I called for in my first Year in Review!

Accepting the inevitability of further dislocation and disruption allows us to focus on resilience, agility and adaptability. Recall that out of the grind of the last few years, we saw historic breakthroughs in life science, space, AI, robotics, transportation, agriculture and food production to name only a few. Breakthroughs that could help solve many of the challenges we face.?We have the tools to make things better; but innovators, disruptors, visionaries, investors and entrepreneurs must continue to ethically deploy them constructively - leadership matters!

I recently came across the words of Theodore Parker and they brilliantly summarize how I feel entering 2023.

"I do not pretend to understand the moral universe, the arc is a long one, my eye reaches but little ways. I cannot calculate the curve and complete the figure by the experience of sight; I can divine it by conscience. But from what I see I am sure it bends towards justice."

Happy New Year!