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Power Corporation website

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Sustainability at Power Corporation

Expanding in the Face of Challenges

2009–2019

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The next fourteen years marked a period of continued strong earnings. It also saw one of the most tumultuous economic times in many decades, including the sudden financial crisis that rocked the global economy in 2008, a crisis the Corporation and its group companies weathered better than most of their peers.

The financial crisis did not deter Power from its long-standing strategy: To invest in a limited number of companies with the potential, over time, to develop dominant positions within their industry. To work with strong management teams toward sustainable earnings, profitable growth, and shareholder value. And to ensure that Power Corporation and its group companies maintained healthy balance sheets with which to ride out slower economic periods or seize new opportunities.

Sadly, this period also saw the passing of Paul Desmarais, whose passion and energy had served the company for some 45 years.

Maintaining a Prudent Approach

Power and its companies maintained their philosophy of prudent management during the financial crisis. Once the crisis began to pass, new initiatives were launched to regain a trajectory of growth where opportunities existed.

In late 2011, Power Corporation acquired a 10 per cent stake in China Asset Management Co., a leading company in the Chinese asset management sector. Also in 2011, Sagard China was created to manage Power Corporation’s investment portfolio in China, primarily in the country’s public equity market.

GBL continued to own its stake in global energy company Total and leading ceramics and building materials company Imerys. In 2013, GBL acquired a 15 per cent interest in SGS, the world’s leading testing, inspection and certification company.

In April of 2014, Lafarge announced plans to merge with Holcim Ltd to create a company with some US$44 billion in annual sales. The transaction was completed in July, 2015, creating LafargeHolcim, a world leader in the building materials industry.

Launching a New Media

The North American newspaper industry has faced challenges from emerging technologies, particularly over the last ten years. The impact on readership habits, circulation and advertising has been profound and has resulted in restructuring, layoffs and consolidation throughout the industry.

In April 2013, La Presse launched La Presse+, a free, digital edition for tablets combining the best in print media, mobile applications, video and the web. By May of 2014, it had become the most downloaded free application in the Newsstand and News categories on the App Store in Canada. In 2016 alone, La Presse+ readership increased by 18.7 per cent, with La Presse+ being viewed on an average of more than 273,000 unique tablets every day. As a result, its circulation exceeded the highest average weekday circulation reached by the print edition of La Presse at that time, which was about 208,000 copies in 2009.

La Presse discontinued printing its Monday-to-Friday paper editions on January 1, 2016, becoming the first major daily in the world to completely transition to a weekday digital format. In June 2017, La Presse announced that it would also cease the printing of its Saturday edition as of January 2018, thus becoming a 100% digital media. The last paper copy of La Presse’s Saturday edition was published on December 30, 2017.

S’adapter à un paysage médiatique en évolution

En mai 2018, La Presse annonça son intention d’adopter une structure sans but lucratif, une décision mettant fin à une période de plus de 50 ans au cours de laquelle ce média fut détenu par Power Corporation.

Cette structure novatrice, qui se veut une approche moderne adaptée aux réalités des médias écrits, fait en sorte que tous les profits tirés des activités, toute aide gouvernementale et l’argent recueilli auprès de donateurs peuvent être consacrés directement aux activités de La Presse.

En adoptant cette structure à but non lucratif, La Presse devint une entité entièrement distincte et indépendante de Power Corporation.

Dans le cadre de la transition, Power Corporation offrit toutefois une contribution de 50 millions de dollars à La Presse afin de lui permettre de se concentrer sur la mise en œuvre ordonnée de son plan de développement stratégique et de réunir les conditions essentielles pour élargir la base de ses appuis.

La Presse poursuit sa mission, qui est de produire une information de qualité, rigoureuse et fiable à l’intention du public francophone, et de favoriser la diversité d’opinions dans le respect des idées et des personnes. La Presse, qui fait partie de l’histoire du Québec depuis plus de 100 ans, demeure sans contredit une référence en matière d’information et continue à jouer un rôle essentiel afin d’assurer la vitalité de la démocratie.

Achieving Market Leadership In Ireland

Consistent with Great-West Lifeco’s global business strategy of developing significant market positions in the sectors where it operates, in 2013 Great-West Lifeco extended its reach further into Europe when it reached an agreement with the government of Ireland to acquire all of the shares of Irish Life Group Limited for €1.3 billion.

Established in 1939, Irish Life is the largest life and pensions group and investments manager in Ireland. With a single transaction, Great-West Lifeco became Ireland’s leader in life insurance, pensions and investment management.

Given Canada’s Life’s operations in Ireland, Great-West Lifeco knew the market very well and had local managers on the ground who could assist with the acquisition and the subsequent combination of Canada Life Ireland with Irish Life. The acquisition was immediately accretive to earnings.

Gaining Record-Keeping Assets

In 2014, Great-West Lifeco would go on to announce Great-West Financial’s acquisition of J.P. Morgan Retirement Plan Services. With the transaction, Great-West Financial became the second-largest retirement services provider in the U.S. market, with nearly 7 million defined contribution participants and more than US$400 billion in assets.

Subsequent to the closing of the acquisition, Great-West Financial announced that its retirement business would officially be named Empower™ and would include the retirement operations of Great-West Financial, J.P. Morgan Retirement Plan Services and Putnam Investments.
Finding Success as an Industry Consolidator
Today financial services represent ● per cent of Power Corporation’s business, attesting to the success of the actions taken to become a consolidator in that industry in Canada, the United States and select countries abroad. All transactions undertaken since the mid-1990s have resulted in considerable synergies in the companies involved. Power has taken its traditional long-term approach to managing these assets, investing in their people and operations to ensure competitive leadership. It has focused on the implementation and sharing of leading-edge technology – which is the life blood of the financial services industry – among all companies in the group.

Recognizing Key Players

Power Corporation has prospered over the years through the expertise and hard work of its many employees. Several senior executives stand out for having devoted much of their careers to the Corporation.

Raymond L. McFeetors
John A. Rae
J. Edward Johnson
Gérard Veilleux

Raymond L. McFeetors retired as President and CEO of Great-West Lifeco in 2008, following a distinguished 40-year career and numerous important contributions to the company’s growth and success, including 16 years as President and CEO of Great-West Life. He was appointed Chairman of Great-West Lifeco and was elected to the Board of Directors of Power Financial and named Vice-Chairman. He retired from Power Financial in 2013 but continued to serve as a director of Great-West Lifeco until 2014.

John A. Rae is one of Power’s longest-serving officers. He joined Power Corporation in 1971 as Executive Assistant to the Chairman and Chief Executive Officer, Paul Desmarais. In 1978, Mr. Rae became a Vice-President and in 1991, he assumed the responsibilities of Executive Vice-President, a position he continues to hold. In 1988, he was elected to Power’s Board of Directors and served as a Director until 2012. In addition to his role in the growth of Power Corporation, Mr. Rae has made important contributions to his community and to his country.

J. Edward Johnson joined the Corporation in 1985 after a number of executive positions in both the private and public sectors. He was Senior Vice-President, General Counsel and Secretary until 2012. During his tenure, he played a key role in the development of Power, in addition to his role as the Corporation’s spokesperson. As Secretary of Power, he guided the Corporation’s governance structure and practices and ensured regulatory compliance during a time when this topic came under increasing public scrutiny. He continues to serve the Corporation as a special advisor.

Gérard Veilleux served as President of Power Communications Inc., a Power Corporation subsidiary, from 1994 until 2015 and was Vice-President of Power Corporation from 1998 until 2009. He served as Chairman of the Executive Committee of the Board of Gesca and La Presse until 2015. It was under the leadership of Mr. Veilleux that La Presse established its digital strategy including the development and launch of the La Presse+ application for tablets. He continues to serve the Corporation as a special advisor.

Evolving Power’s Board Structure

Subsequent to the financial crisis which began in 2008, Power took the opportunity to re-evaluate its governance structure. The number of directors was reduced from 21 to 12. Related Party and Conduct Review Committees were created at the boards of Power Corporation and at all of its publicly traded subsidiaries.

Power’s governance model remains defined by the philosophy of making long-term investments, providing active ownership and close oversight of its subsidiaries as a means of driving performance, and by contributing to the communities in which it operates.

Saying Farewell to a Canadian Icon

The year 2013 came to close on a sad note. On October 8, The Honourable Paul Desmarais passed away peacefully, after a life of remarkable personal and business achievement.

He was born in 1927 in Sudbury, Ontario and studied commerce at the University of Ottawa and law at Osgoode Hall until taking on the challenge of rescuing the family’s failing bus company. A visionary entrepreneur, he acquired control of Power Corporation in 1968. Paul Desmarais spent the ensuing years transforming Power Corporation into a dynamic financial, industrial and communications holding company with major interests in North America, Europe and Asia.

Paul Guy Desmarais, 1973.
During the course of his lifetime, Mr. Desmarais distinguished himself as an exceptional philanthropist and as a citizen who cared greatly about the arts, architecture, music and education. Through his work, Power has become a force in the charitable giving field and Mr. Desmarais himself gave generously to social causes in support of those less fortunate.

Always a passionate defender of national unity, and proud of his French-Canadian heritage, Paul Desmarais was appointed a member of the Privy Council of Canada, Companion of the Order of Canada, and Officer of the Ordre national du Québec. He was also a recipient of France’s Grand Croix of the Légion d’honneur and Commander de l’Ordre de Léopold II of Belgium. He saw his success in business at home and across the world as a contribution to the development of Canada as a nation and an example to young Canadians of the importance of both official languages.

A Third Generation Joins the Group

Olivier Desmarais
Paul Desmarais III

Olivier Desmarais, son of André Desmarais, and Paul Desmarais III, son of Paul Desmarais, Jr., joined the group of companies in May 2014 and were appointed Senior Vice-Presidents in 2017. They each play a distinct role within the group based on their respective areas of expertise. 

Paul III’s responsibilities include the management and growth of the multi-strategy alternative asset manager Sagard Holdings, in his role of Chairman and CEO. Sagard Holdings oversees six strategies in four asset classes including private equity, private credit, royalties, and venture and, as of mid-2020, counted over 200 institutional and high-net-worth limited partner relationships. Paul III is also Chairman of Wealthsimple, one of Canada’s leading financial technology companies, and Dialogue, Canada’s largest telemedicine company. He is deeply engaged in the Canadian entrepreneurial landscape having co-founded Diagram Ventures and Portag3 Ventures. 

As Chairman and CEO of Power Sustainable Capital, Olivier steered the transformation of the company into a global multi-platform sustainability-led alternative asset manager. Power Sustainable Capital is comprised of two proven investment platforms aiming to steadily create long-term value: the Power Energy platform invests in the development, construction and operations of renewable energy infrastructure assets in North America, while the Power Pacific platform invests in the China equity markets, seeking high quality, sustainable business models with a fundamentals-based, research-driven investment process. Continuing to nurture the long-lasting relationships Power Corporation has built in China since the early 1970s, Olivier serves as Chairman of the Canada China Business Council. He is also Chairman of Power Energy Corporation, the company through which Power Sustainable holds its investments in Lumenpulse, a global company specialized in high performance and sustainable specification-grade LED solutions, and The Lion Electric Company, an innovative manufacturer of zero-emission vehicles.

List of Officers and Directors
2014

Investing 
in 
Financial Technologies, a
 Strategy
 for
 the 
Future

Many financial technology (fintech) ventures were launched worldwide in the 2010s, addressing virtually every market sector of the financial services industry. As a large incumbent player with millions of clients, the Power Group was intent on knowing how the industry would change and how best to serve clients in the future.

In line with this vision, the group announced in 2016 the formation of a new investment fund, Portag3 Ventures, which today is the venture business of multi-strategy alternative asset manager, Sagard Holdings. This fund is dedicated primarily to backing innovative financial services companies that have the potential for change and global impact. A second fund, Portag3 Ventures II, was launched in 2018. 

Portag3 Ventures brings together Power Corporation group companies and outside investors to build an interconnected fintech ecosystem. As of June 30, 2020, Portag3 Ventures had invested in more than 56 fintech companies and investment funds globally. An example is Wealthsimple, one of Canada’s leading financial technology companies which operates one of the country’s largest and fastest-growing digital investing services.

In April of 2014, Lafarge announced plans to merge with Holcim Ltd to create a company with some US$44 billion in annual sales. The transaction was completed in July, 2015, creating LafargeHolcim, a world leader in the building materials industry.

An Important Milestone: Fifty Years at the Helm of Power Corporation

2018 marked the 50th anniversary of the Desmarais family’s commitment to Power Corporation. While the Corporation’s portfolio has changed significantly since Paul Desmarais became the controlling shareholder in 1968, the fundamental values driving the investments have not. Throughout the past fifty years, the family has consistently put forth its belief in a sound investment philosophy, long-term relationships, and personal commitment to communities. 

The members of the Desmarais family also feel fortunate to have worked with generations of like-minded women and men who have shared their values, their vision, and their passion. In a letter in Power Corporation’s 2018 annual report, Paul Desmarais, Jr. and André Desmarais expressed their gratitude to employees, past and present:

As controlling shareholders, the Desmarais family considers itself a steward of this company and its businesses. Above and beyond this stewardship, they consider it their duty to grow and develop the Corporation for the upcoming generations of the family and for all shareholders. This deeply held conviction has had a profound influence on how the business has been managed in the past and continues to be managed today to ensure a sustainable future. 

The Desmarais Family and Power Corporation: a 50‑Year Journey

Speech given by Paul Desmarais, jr, at the 2019 Power Corporation General Assembly

“As our family marks 50 years at the helm of Power Corporation, we wanted to formally thank all those who have contributed to the success of Power and its group companies. We are humbled by and grateful for our employees’ efforts in pursuit of Power’s success.”

A Strong Commitment to Corporate Social Responsibility

Today’s corporations must play a role in society larger than serving solely as a center for profit creation, though that function enables all else. Power Corporation feels it has an obligation as a responsible corporate citizen to take actions that have a broad positive impact on society. It embraces that obligation because –quite simply – it is the responsible thing to do.

Corporate Social Responsibility (CSR), also referred to as responsible management, is fundamental to the way Power, and its group of companies, do business. The notion of responsible management has been at the core of the Corporation’s investment philosophy, enabling it to build a resilient and sustainable business, through its role as an investor, employer and contributor to the communities in which it operates.

In 2015, the Corporation launched PowerCorporationCSR.com, a CSR-dedicated microsite updated annually with concrete examples of how responsible management allows the Power Group to generate long-term value and sustainable growth.