Allen Fernando, Business Writer
William 'Bill' Clarke is as admired for his no-nonsense approach to decision-making and his performance as corporate boss as he is criticised for his arrogance. - Photo by Janet Silvera
Even if William 'Bill' Clarke, notoriously gruff and arrogant, had merely reported his company's profit for the year, he would have been assured of a high ranking among corporate newsmakers for 2006.
By yearend, however, it was Clarke's bizarre behaviour in withdrawing from a race for the presidency of the Private Sector Organisation of Jamaica (PSOJ) and pulling his firm out of that institution, that had the corporate world and ordinary Jamaicans agog.
It was not only sensational stuff, but in some respects it rivalled Portia Simpson Miller's election to the presidency of the ruling People's National Party (PNP) and inheritance of the job as Jamaica's prime minister as the biggest news in the country for the year.
"This was Bill Clarke's pantomime," said one corporate colleague. "Bill swayed between the stupendous and sublime to the absolutely ridiculous."
But that, insists some, is Bill Clarke.
Consistent profits
In a dozen years as managing director of the listed Bank of Nova Scotia Jamaica, Clarke not only steered Scotiabank through the financial sector turbulence of the 1990s, but has consistently recorded profits for shareholders, mostly the bank's Canada-based parent. This year was no different.
Following on Scotia's $5.8 billion profit in 2005, the bank, the island's largest, with assets of approximately$200 billion, reported net profit of $6.8 in its yearend to October.
"These strong results reflect Scotiabank's core strengths in risk management and cost control and our continued focus on customer satisfaction," said Clarke in a statement announcing the performance figures.
But Clarke has had more, much more to say, and do, this past year, not least of which was to pull off one of the biggest deals ever in Jamaica's corporate history.
He engineered Scotiabank's $4.4 billion buy-out of investment bankers Dehring Bunting and Golding, shortcutting Scotia's efforts to gain a toe-hold in this segment of Jamaica's financial market.
Clarke had, at Scotiabank's shareholders' meeting in March, outlined the plan to investors. "Wealth management will be a major focus for Scotiabank in the coming years," he said. ".... There are some players in the market who believe that we have surrendered the investment market to them and we might have done so unwittingly."
Not long after he hired Anya Schnoor away from her job as senior vice-president at Pan Caribbean Merchant Bank to head up Scotiabank's new wealth management division, with what at a glance appeared to be a mandate to build the business from bottom up.
They, apparently, had other strategic ideas.
In mid-October, Clarke confirmed a buzz in financial circles that Scotiabank had made overtures for the acquisition of DB&G, launched 13 years ago by a clutch of mostly entrepreneurial upstarts, led by the then young bankers Chris Dehring, Peter Bunting and lawyer, Mark Golding.
By early in this decade, Dehring had wound down his shareholding and had left the bank, to be replaced by Gary Sinclair.
DB&G, by its own organic growth and raft of acquisitions, prospered during the financial sector melt-down.
By the time Clarke, on October 23, announced Scotia's formal offer of J$21.08 cents per share for DB&G's stock, the investment bank had assets of over $27 billion and was valued by the market at $6.3 billion. It had, for the financial year ending March 31, returned a profit of $882.3 million, financial year, but that included a one-off gain of $250 million from the sale of assets.
Organic growth
"Organic growth," Clarke conceded at the time from the Scotia's retail banking operations, would not sustain the levels of growth the bank had become accustomed to over the years.
Peter Bunting, DB&G's chairman and CEO, suggested that the key partners and directors, who controlled nearly 40 per cent of the investment bank's shares, had essentially come to the same position about their institution, making its acquisition a practical option.
"It has been a tough environment," Bunting told reporters. "Profit growth has become unsustainable and we need to look at future earnings vis-à-vis our peer group, which has declined in line with the Jamaica Stock Exchange."
The deal was consummated in early December with Scotia acquiring 68 per cent of DB&G (it originally sought a minimum 75 per cent), with Clarke promising that the investment bank would operate as a separate entity within the Scotiabank group. Bunting, Golding and Sinclair would continue on the management team for at least two years.
Maintaining his usual stentorian manner at a celebratory press conference on December 14, Clarke appeared oblivious to the issues swirling around him, stemming from his dramatic pull-out, only days earlier, from the race for the presidency of the PSOJ.
Not that Clarke is unaccustomed to controversy. His critics characterise him as brusque and hectoring, but almost always in the same sentence is the description 'performer'. Clarke's supporters prefer to brand him as a no-nonsense straight-talker.
He once famously, and controversially, described Jamaica as a failed state and only months ago he publicly quarreled with the Development Bank of Jamaica over the spread DBJ should charge on loans from money wholesaled to it by Scotiabank. Some public sector officials accused Clarke of wanting to dictate rather than negotiate.
It was perhaps this element of his character, a rugged determination and an inability to easily compromise, that emerged during his bid for the PSOJ's presidency, which, private sector sources concede, Clarke did not initially seek.
"Bill was drafted to offer himself for the presidency," said a PSOJ insider. "That is the way of the organisation."
It is also, or used to be, the way of the PSOJ to elect its leaders by consensus. Once a name makes it to the fore, there is not a contest.
Initially, it appeared that this too would be Bill Clarke's route to perhaps the most prestigious post in the private sector - except that Clarke had major plans for the overhaul of the private sector. If he got the job, Clarke insisted it would be on the understanding that he would demand changes that would strengthen the power of corporations versus sector organisations and would seek to widen the membership of the PSOJ. It was now too much of a Kingston-based organisation. Clarke also said the PSOJ should become far more policy-focused, seeking to influence government beyond its narrow areas of interest.
As Clarke outlined his vision for the management of the organisation at a breakfast meeting in October, several members of the PSOJ's council balked at his idea for the shift of power.
Christopher Zacca, the protege of hotel and newspaper owner entrepreneur Gordon 'Butch' Stewart announced that he would challenge Clarke for the post. It was to be the first time that the PSOJ would have an openly contested race for its leadership. Both men engaged in vigorous, but mostly behind the scenes, campaigns.
Critical turning point
"...The PSOJ is at a critical turning point, faced with a growing feeling of disenfranchisement amongst some of its wider membership," said a Clarke campaign brochure. "We can choose to accept the status quo or accept the responsibility to change it; to be guided by the past or to be constrained by it."
While Clarke may have shifted his position on the make up of the PSOJ's council, which elects the president, his fundamental ideas did not change and were not immediately embraced at the PSOJ's annual general meeting on December 7 at which the council was chosen.
Having had his suggestion that his proposals be put for further study rejected, Clarke, on leaving the meeting, announced his withdrawal from the presidential race. Moreover, he also withdrew BNS from the PSOJ.
"It is evident that if your views run contrary to those who believe in incumbency, you have no place at the table," he said in a terse statement, that suggested more than an overburden of bitterness.
But all this may soon blow over. A few days before Christmas, the head of the island's biggest bank was announcing a $500 million mortgage fund for certain public sector employees at 11 per cent, by far the lowest in the commercial market and closest to the top end 8.0 per cent rates offered by the government's National Housing Trust.
He was not being Santa Claus, Clarke told public servants at function at which he outlined the scheme, but this was Scotiabank's contribution to help keep young professionals in Jamaica.
- business@gleanerjm.com
