Sandford Borins

Sandford Borins, Ph.D.

Sandford Borins is a Professor of Management at the University of Toronto. He writes, blogs, and teaches about narrative, information technology, and innovation.

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October 21st, 2014

Watch Great Movies. Tell your Story. Learn Management. (MGSC12)

Education, Narrative

MGSC12 (Narrative and Management) is not your typical management course. It’s based on the now well-recognized idea that telling stories is a fundamental aspect of being human, and that well-told stories can be immensely persuasive, particularly in a management context.

MGSC12 begins by introducing a set of powerful concepts about story-telling, such the structure of archetypal stories about managers, cinematic plot structure, the roles of narrator and protagonist and the relationship between them, and Erikson’s model of the human life cycle. The course then applies these concepts in a number of ways.

We use some superb contemporary movies about managers both as examples of the art of story-telling and as cases in effective or ineffective management. You can think of these movies, and the way we use them, as business cases, with the difference that they employ moving images, and are authored, acted, and produced by people who are the best in the business.

The movies we watch are either up-to-date or classics. Some examples: The Social Network, the story of the origins of Facebook for which Aaron Sorkin won the Academy Award for best screenplay; Wall Street, a classic movie for which Michael Douglas won the Academy Award for best actor; Inside Job, an Academy award winning documentary about the global financial crisis; Margin Call, J.C. Chandor’s high-acclaimed first movie, also dealing with the financial crisis; Zero Dark Thirty; and The Fog of War, an Academy Award winning documentary about the life of former US Secretary of Defense and World Bank President Robert McNamara. He was probably the smartest MBA ever, but his intelligence didn’t prevent him from making some colossal mistakes.

In a typical week, you watch the movie before class and we then discuss it in class. Often we use table work. I divide students into groups, assigning each group a question to discuss for 15 minutes, and then ask a member of the group do a short presentation summarizing their discussion.

I also have two assignments giving you an opportunity to tell your story, one about the significant turning points in your life and the other focusing on your interactions with a particular organization (a Coop placement for example). We’re in the course together, so I’ll tell my story too.

You’ll emerge from MGSC12 with a much better understanding of how to tell persuasive stories in a management setting, and you’ll also watch quite a few thought-provoking and inspiring movies.

I will teach MGSC12 winter semester this year on Wednesdays from 11 to 1 and I look forward to showing you how story-telling and movies can form an essential part of your management education. Maximum enrolment for the course is 35 to facilitate class participation, and there are still some places available.

 

October 19th, 2014

When I Crossed Thorong La

Travel

I’ve been reading accounts of the freak blizzard and avalanche at the Thorong La (Pass) on the Annapurna Circuit a few days ago and feeling deep sadness for those who perished sotragically. It also reminded me of my own crossing of Thorong La on October 17, 1984, exactly thirty years ago.

Looking at my photo album of the Annapurna circuit trek brought back numerous memories. Our group – three trekkers, a guide and a porter – reached Manang, the point of departure for crossing the pass from east to west. It turned rainy in Manang, so we spent an extra day waiting for the skies to clear. The town was over-crowded with several hundred other trekkers also waiting. The weather improved and we made it to Thorong High Camp, where we spent a very cold night preparing to cross. We were up before dawn, walking step by step in the thin cold air.

We reached the pass fairly early in the morning, as evidenced by pictures of me in a parka, woolen hat, and heavy gloves at the two cairns that marked the pass. Beside the second picture I had written “made it, but cold!” I have pictures of our first views of the breathtaking Dhaulagiri Range on the other side of the pass. The sky was deep blue, with a cloud floating off in the distance, the mountains visible both above and below it.

The trail down from the pass was steep and dusty. It took several hours to get to Muktinath, the first town on the other side, and I remember my calves burning. The air, however, became warmer and easier to breathe. I have no pictures of this part of the trek, the exertion requiring my full attention. Not surprisingly, it was here where the trekkers perished last week; this trail would have been impassible when covered in several feet of snow.

In Muktinah we visited an ancient temple sacred to Hindus and Buddhists. I woke early and took a photography of Dhaulagiri I, the highest peak in that range, gleaming in the sun above a line of shadowed hills, as the valley below was still in darkness. This photo in blue, black, and white is, I believe, the best I ever took. When we left Muktinath, I took a photo looking back at Thorong La, showing the mountains on both sides of the pass, and the steepness of the descent from the pass itself into Muktinath.

In the mid 1980s Nepal was much more isolated than today. There were no lines of communication with the outside world except at Manang, on the east side of the pass, and Jomson, a four hour walk down the Khali Gandaki valley from Muktinath. At that time, the loss of life from an avalanche and blizzard on the Thorong La would have been much worse than today.

Trekking the Annapurna Circuit trek was a wonderful experience for me, with dramatic vistas, moments of connection with and understanding of civilizations entirely different than my own, and the intrinsic reward of three weeks of arduous walking. A decade later, I did the Everest Base Camp trek, and found it equally rewarding.

My heart goes out for the families of those who perished due to a freak misfortune. Nothing in life is riskless, but the risks of the Annapurna Circuit trek are not great. The world is sometimes inexplicable, cruel, and unjust.

 

October 9th, 2014

Independent Corporate Overseers Are Not Employees

business, Government

There are thousands of Canadians engaged in the important work of corporate oversight. The best known group are corporate directors. A second, less well known, corporate oversight role in Canada is independent review committees (IRCs) for financial institutions. IRCs for mutual fund families have the role of reviewing transactions involving potential conflicts of interest, such as transfers of securities from one fund to another in the family, or the purchase of securities issued by the manager of the mutual fund (for example a bank). This blog is a wake-up call about a potential threat to their independence.

The Canada Revenue Agency (CRA) treats corporate directors as employees of the corporation. The basis in law for this is that the Canada Pension Plan Act lumps them together with judges, MPs, senators, MLAs, lieutenant governors, and other people elected or appointed in a representative capacity as “officers.” Looking at the list, the glaring anomaly in it is corporate directors; all the others are employees of the state. The role of a corporate director is to provide independent oversight of a corporation, and treating them as employees undermines their independence. The Internal Revenue Service in the United States, in contrast, treats directors as independent contractors, and directors report their earnings as income from self-employment.

Members of IRCs, as far as I can determine from conversations with colleagues, report their fees as self-employment income. The rationale for our doing this is that we are providing independent arms-length oversight in conflict-of-interest issues for the mutual funds family. As one of my colleagues has pointed out, the key word in “independent review committee” is “independent.” The Canadian Securities Administrators’ National Instrument 81-107, which governs IRCs, stipulates that IRC members “have no material relationship with the manager [of the mutual funds family], the investment fund, or an entity related to the manager.” This restriction rules out employees.

The CRA has approached the mutual funds family on which I serve on the IRC, and, likening us to corporate directors, decided we are employees of the mutual funds family. We are appealing this decision under the current law. It may well be that we are a test case, and that if our appeal is not accepted CRA will make the same ruling for every other IRC in Canada.

In our view, the CRA is making a fiction of the independence of IRCs. The government, therefore, is sending IRC members a mixed message. Our governing regulations say we are independent, but CRA says we are not. By treating IRC members as employees, CRA can influence the mindset of both fund managers and IRC members to start acting like employees taking their direction from the manager, rather than professionals exercising independent judgment. As self-employed professionals IRC members can deduct from their IRC fees expenses they think appropriate to performing their job effectively. As employees, they may not necessarily be able to deduct such expenses, so they would ask the funds manager to pay for some or all of those expenses, which would change the dynamic of the relationship.

A better approach would be for the definition of “officer” in the CPP Act to be changed to explicitly exclude members of IRCs. It is in the interest of good corporate governance for IRCs to be independent in every possible way, including having earnings taxed as income from self-employment rather than having earnings taxed as though we were employees.

If the definition of “officer” in the Canada Pension Plan Act were changed to exclude corporate directors, then that would not only remove CRA’s rationale for taxing IRC members as employees instead of independent contractors, but it would do the same for the much larger group of people who serve as corporate directors. Promoting the independence of corporate directors in that way is good public policy.

Corporate overseers, whether directors or members of IRCs, are not employees. If we were, we would not be independent. Since we are not employees, we should not be taxed as employees.

 

October 5th, 2014

Returning to My Blog

Innovation, Narrative

As you may notice, my last blog entry was in mid-August. This is the longest time between posts since I began blogging in 2007. Part of the reason was the summer holiday. This semester I am on research leave, so I haven’t been meeting classes, and my posts are often responses to something that went on in class, or explorations of issues raised in class. (I will be returning to class in the winter semester, so you can expect to see posts about my classes again.)

I have been working intensely on a new book about narratives dealing with private sector management. I’ve completed drafts of an introductory chapter and a chapter on the auto industry during the summer, and in September I was drafting a chapter about the IT sector. These two sectors have much in common because autos were the high tech of a century ago. I’m now turning to a chapter about the financial services sector: Wall Street, Wolf of Wall Street, Inside Job, Caryl Churchill’s Serious Money: lots of juicy material to write about it. This research involves a lot of reading and watching, and then a lot of writing, so I haven’t tried to post a small chunk of a chapter on the blog.

But I will be getting back to the blog. Maybe political issues as we get closer to the Toronto civic election. I will be going public with my public sector innovation work, making presentations at an OECD Conference on Public Sector Innovation in Paris in mid-November and a seminar at the Hubert Humphrey School at the University of Minnesota in early December. And there may be some issues of an economic nature coming as well. Watch this space: I shall return to it.

 

August 14th, 2014

I’ve Friended McNabs Island

Travel

I’m back from two weeks’ holiday in Nova Scotia, spent in Halifax and on the south shore. I gained a deeper understanding of Halifax’s strategy significance as Canada’s major Atlantic port during both world wars – a result of its unique setting, with a deep sheltered harbor connected to a basin where a fleet could be marshalled, as well as a nearby hill on which a fort could defend the city and harbor below. Finally, the harbor could be protected by a large island – McNabs Island – at its mouth.

Halifax’s military heritage has been preserved at the Citadel, its role as a disembarkation point for immigrants at the Pier 21 Museum, and its social and commercial history at the Marine Museum of the Atlantic. These three sites are all well-presented and worth visiting.

McNabs Island is a somewhat anomalous contrast. The island is a provincial park and the main military installation, Fort McNab, which contains massive cannons that control the passage to the harbor, is now a national historic site. The island also has beaches, several once-toney homes and cottages, the ruins of an amusement park, hiking trails, forests, a tidal pond, and a plethora of birds, including an endangered species of barn swallows.

Even though it is a provincial part and contains a national historic site, McNabs Island has fallen on hard times. The buildings are decaying. Signage on the trails is minimal. While there are electrical lines to the island, the power has been turned off.

McNabs Island has the potential to be restored. It could be a hiking and nature preserve; it could be an historical site; or it could be a recreational destination, somewhat like Toronto’s Centre Island. Or it could be some combination of the three.

Above all else, McNabs Island needs a vision of what it should be and it needs more resources than the provincial and federal governments are providing. Had there been a clear vision of what McNabs Island could be, it could have been funded as part of the Harper Government’s ubiquitous Economic Action Plan.

The situation is not without hope, however. Friends of McNabs Island (mcnabisland.ca) is a citizen’s group that is working to preserve, publicize, and promote McNabs Island. The group has published a brochure about the island outlining its history and including a detailed map, has undertaken initiatives such as an annual litter cleanup, and has acted as advocates to protect the island – once thwarting a proposal to build a sewage treatment plant on the island.

Friends of McNabs Island also offers walking tours of the island that point out its history and ecology. My travel companion (my older son Alex) and I saw a reference to McNabs Island tours in our travel guide, and the tourist office on Halifax Harbor told us about a ferry company boat that was dropping off and picking up tourists at McNabs. On the Saturday we went, two guides from Friends of McNabs Island also rode the ferry and then offered to lead a tour for the dozen or so visitors, at no charge.

The two guides, Erin and Brooke, are both Dalhousie students working for Friends of McNabs Island as a summer job. They are cheerful, knowledgeable, articulate, and energetic. The standard tour ended at the dock about 40 minutes before the return ferry was to arrive. Alex and I were willing to explore a bit more, so Erin and Brooke took us on a personal tour of Fort McNab. Erin and Brooke struck me as exactly the sort of student I like to have in my classes and are excellent representatives of their programs (environmental studies and management, respectively) at Dal.

Alex and I enjoyed this visit immensely and concluded that it was one of the highlights of our trip to Nova Scotia. We, too, are now Friends of McNabs Island. And we hope that Erin, Brooke, and the other members of the Friends of McNabs Island will stimulate renewed interest and reinvestment in McNabs Island, so that it again becomes a favorite destination for both Haligonians and tourists.