Thursday 18 August 2011

Thoughts on Hydro CEO Brennan

As reported, Manitoba Hydro Big Cheese Bob Brennan is retiring. Dan Lett suggests in his commentary that "it is meaningless to ask why he is stepping down." I think otherwise. Being at 70 years of age you certainly can't blame the guy for packing it in, however the timing is meaningful in that it tells a story about how Hydro has been run over the past 11 years.

I have been very critical of Bob Brennan in the past, however I don't doubt that, if left to his own devices, he could have been an excellent CEO. As Dan points out, many of the more controversial decisions were not made by Brennan, but by the very "hands-on" (nice-speak for politically interfering) NDP government. The decision to spend an extra billion dollars on the less environmentally friendly and technically inferior west-side route was made by the government, not by Brennan. Likewise, the decision to plow ahead with aggressive northern Hydro development for export, regardless of the financial viability and irrespective of the risks, was made by the Provincial government, not by the CEO.

My beef with Brennan is not in making these decisions, but in so willingly supporting them. He sold out faster than a Winnipeg Jets home opener. He fudged numbers about Bipole III, he fired a consultant who dared to expose the risks of the Hydro development strategy, and he never wavered from the arm of his political masters. What I question is the man's integrity. If he had any, he would have put up more of a fight. He would have said: "look, according to our engineers the west-side route is inferior to the east-side route. I don't think we should do that." or "there is no need to rush into low-margin, high-risk export contracts." But he did not. Instead he committed to the ill-advised policies of the government of the day, and that now puts him in a bit of a pickle...

With an election pending and a potential change in administration on the horizon, Brennan has pulled the plug. I don't think this is a coincidence. Brennan's willing support of the indefensible NDP policies would make his relationship with a new PC government unworkable. He would either have to reverse course on everything he stood for in the previous years, or he would be in conflict with his new masters and would be forced out. Leaving now allows him to avoid that conundrum and leave on his own terms.

The announcement of his retirement is therefore a smart move, and it is not insignificant. It tells the story of a senior civil servant who too willingly steered the ship in the wrong direction, and fled in a life boat just short of it hitting the iceberg. The question now is: will we get a new captain that will direct it to safety?


Riverman said...

Excellent, someone said it. We have all been thinking it.

Thanks for this great post.

Anonymous said...

He's 70 are you kidding me. And if he's as elastic as you say he is, don't forget he did his PC's masters bidding at one time.

When was a good time to leave ?, at 65, mandatory retirement.

The Great Canadian Talk Show said...

Good work Peanut. If there were any decent mainstream reporting on this beat, they would have read his divorce file like I did. It might help explain a few things to the public.

But that would be a poor role model for the RRC journalism students and not the style Madama Presidente and her lackeys approve of. So no one that gets ad dollars from Hydro does it and no one does it on campus radio either.

Welcome to Manitobastan.

cherenkov said...

@Riverman: no problem! Thanks..

@Anon: a great time to leave would have been as soon as the NDP forced Hydro to abandon the east-side route. He could have resigned, saying "I can't support the direction that this government is taking." That would have been the right thing to do and would have made a real impact.

@Marty: I have to be honest: if I were a reporter I wouldn't touch the divorce issue (whatever it is).

bwalzer said...

If the head of a crown corp talks back against their political masters they get fired. It's as simple as that.

Simply being non-partisan isn't enough. An important part of the job is to make the current government look good.

If in the face of all of that the guy did a good job running the organization I would be inclined to cut him a lot of slack. Suggesting that he should make some sort of pointless political guesture at the end of an intensely political career seems trite.

cherenkov said...

Your job is to run the corporation in a responsible manner, like any other CEO. If the government doesn't let you do that, do you speak up or do you bend over?

I hardly think it would be pointless. If some administrator for Stats Can resigns, nobody cares, but if the Hydro CEO were to make that statement people in Manitoba would notice. The NDP likes to say that Hydro is our oil. If that's the case, it's critical to the financial well-being of the province that we manage it properly. Every major decision has multi-billion dollar implications. This isn't a situation where the CEO should just shrug his shoulders and go "oh well, waddya gonna do? I guess I'll play along."

The Great Canadian Talk Show said...

@cherenkov People are asking why he worked well past 65. The divorce file provides clues. Also I would point out that the circumstances surrounding the divorce itself were not unknown to insiders.

Anonymous said...

@Anon: a great time to leave would have been as soon as the NDP forced Hydro to abandon the east-side route. He could have resigned, saying "I can't support the direction that this government is taking.

LOL, now why would he do that ? He's a public servant. They are trained to toe the line and not make waves. The right thing to do ? In a Crown corp, come on, lets not be naive. If this was a fortune 1000 company things may have been different. But it isn't .

So ask hughie how he intends on winning an election that he's basically lost or we'll have a west side route regardless of who the CEO is.

cherenkov said...

Um, he's running a $12 billion corporation, not watering planters on Main St. He should be able to think independently. Plus, as a CEO and as a chartered accountant, he has fiduciary responsibilities to act in the best interest of the shareholders (the people of Manitoba).

Anonymous said...

He may as well be watering planters

Shareholders of Manitoba , by electing the NDP , have issued their proxy and orders are, Do what the Boss ( Selinger /Doer says ). So by default, he has acted responsibly.

West side line is a go unless Hughie becomes the boss. It's all very rosy to think Crown corps in this province act independently , but reality is, they don't and neither do the hired help.

The Traveler said...

Good Write I too would have left the Divorce file angle out meaningless to the story

Marty said...

First of all, anon made it a part of the story as follows:

"When was a good time to leave ?, at 65, mandatory retirement."

People have asked for YEARS why he hung on so long.

Put it to you this way - if he was retiring some big local Internet pharmacy company, we'd know what kind of mansion he lived in and how many cars he owned.

But since it's the just the head of Hydro, a Crown corporation, the MSM thinks the public doesn't need to know if he lives in a tent or a penthouse. The divorce file contains clues about unanswered questions about timing, that;'s all I'm saying.

Sticking around for an extra 5 years has landed him the spotlight with the PUB as he exits. Even the FP editorial today acknowledges that.

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