Money working for people
Copyright © 1996-2008, Fédération des caisses Desjardins du Québec. All rights reserved.
Centre des congrès de Québec, March 29, 2008
(Actual speech may differ from this text)
Distinguished Guests,
Dear Delegates,
Ladies and
Gentlemen,
You might guess that it is not without some heartfelt emotion that I am addressing you for the last time this morning, as your outgoing president.
I wish to invite you to take a look at the road we have traveled together since the time when—on March 25, 2000—I spoke to you all for the first time and drew up the program for the years to come.
If my speech this morning sounds a bit like taking stock, it is because I want to recognize our collective success and allow us to experience a moment of pride. There is no doubt in my mind that together we have achieved great things, basing ourselves on the formidable heritage handed down by our predecessors in order to do so. Our successes today are recognized by everyone, members and clients, financial analysts, foreign observers and even our competition.
This success has not been an overnight phenomenon. This success has been steady, constantly paving the way to overall lasting performance that will lead to our long-term continuity as a financial cooperative that is among the best and most modern in the world.
In recent years, we have worked concretely and methodically on achieving our mission, which is to contribute to the economic and social well-being of individuals and communities. Far be it from me to say that there is nothing left to do. But through our tenacity, our solidarity and our discipline, and by remaining aware of our distinctive assets and aiming at continuous improvement, I am convinced that we will be able to give even greater depth to our achievements.
The road that we have traveled since 2000 was marked with numerous actions on issues such as governance and business development, as well as the financial performance of our Group. All of those aspects were an opportunity to deepen our cooperative authenticity.
When we consider everything that we accomplished, we can say today that "we have built for the long term."
For us at Desjardins, the main objective of exemplary and distinctive cooperative governance consists in ensuring the satisfaction of the needs of members and clients, both present and future. We must also see to the development of our collective wealth by pursuing sufficient and reassuring profitability.
Thus considered, governance goes far beyond simply distributing roles and responsibilities among board members and employees; it reaches all levels of the organization.
What we need to remember about recent years in this regard is that we did not fear strengthening democracy, which is at the heart and soul of our Group, while increasing the capacity of caisse members, as well as of the caisses themselves, to influence the future of Desjardins.
Let's go back eight years. I was, at that time, elected for my first term as president by a broadened electoral college at the end of a campaign and regional meetings that enabled the candidates to show their ideas and vision for the future of Desjardins. We have, in fact, just successfully renewed that experience.
In 2000, we were also moving towards putting in place the new Fédération, which in terms of political balance, organizational efficiency and operating costs represented a promising step forward.
Today we have achieved that promise.
In my first speech at the Annual General Meetings, I said that I wanted to take the opportunity offered by the creation of the single Fédération to implement a new internal complicity within Desjardins Group. We are today able to appreciate that complicity. The significant change brought to Desjardins Group governance, which—to my greatest satisfaction—also included Group Caisses, effectively enabled us to strengthen our democracy in its representative and participatory aspects.
Our new democratic base today enables the voices of the regional and group caisses be better heard within our various decision-making bodies, where forces are more evenly balanced.
It's also on this newly democratic basis that we founded the new mechanisms for listening and consultation. The Councils of Representatives, for example, play a regular role in consulting their caisses on subjects that affect them, enabling the Fédération Board of Directors to better consider the point of view of the caisses when making decisions.
We also allow caisse representatives brought together at the Assembly of Representatives, the power to decide on orientations regarding the major issues facing Desjardins Group. Today, there are no major issues in which they are not involved or that do not allow them to give their opinion and influence decisions.
We can mention in particular Desjardins Group strategic planning, the employee incentive plans, overall performance management or the definition of the basic communities of interest that will provide guidance for future development of the caisse network.
To better represent the communities where we are present and also to open onto the future, we have also called upon young people and women, and we have gotten closer to the communities for whom the first language is not French. By giving ourselves a vision and an approach with respect to diversity, we have become committed to growing the roots of our democracy even deeper into the demographic landscape of our communities.
Because cooperation is for us a vital principle that we wish to maintain at the heart of our practices today and in the future, we held the 18th Congress of officers on the theme of cooperative renewal, after having consulted some 25,000 members through various means.
We thus agreed upon the principles that we have attempted since then to apply in our distinctive commercial practices, by especially putting the accent on accessibility and on the creation of a range of solidarity products.
We also undertook to optimize member participation—in both its political and its financial aspects—in the life of the caisse and the network. We also made the decision to get closer to young people, which gave rise to the creation of the Youth Focus program, which was deployed through a wide range of initiatives throughout the Group. We also clarified the zones of our support framework and the independence of the caisse and agreed upon a regular review of the standards and policies affecting them.
When we speak of autonomy, we often end up in a sea of ambiguity. I believe that any autonomy that does not pass the test of inter-cooperation is not proper autonomy. Autonomy that rejects solidarity ceases to be autonomy. Real autonomy takes its true meaning from the ability to be self-sufficient and the development of skills in people as well as from the actions that make it possible for the caisse to foster creativity as it strives to reach its goals.
These goals were also updated at our 18th Congress. For the caisse, these consist in giving all members adapted access to high quality financial services, regardless of the scope of their needs, and assuring them concrete financial advantages and considerate, human service. It also consists in contributing to the cooperative, economic and financial education of our members. Finally, for the caisse, they consist as well in contributing to the development of its community and of cooperation itself.
We have made progress on all these levels. The strengthening of our commitment in the community can be seen, for example, in the size of our sponsorships, donations and scholarships distributed to communities and to individuals, which has more than doubled since the beginning of the decade to reach nearly $72 million in 2007.
The creation of a Community Development Fund within the caisses has also made it possible to provide even more concrete support today to community-driven projects. And we did it by calling upon the democratic participation of our members.
With the establishment of Capital régional et coopératif Desjardins, following a commitment made when I was first elected president, we have also strengthened our capacity to support cooperative development and regional economic development through venture capital.
We also clearly increased our attention given to the environment, which is inseparable from the notion of sustainable development.
By undertaking to change our ways of doing things and setting ourselves several demanding objectives, today we are contributing by example, and by inviting people to aim for the long term, to correct the shortsightedness of businesses, which are often overpowered by the need to achieve results for the coming quarter. By doing things for tomorrow, we are proving that we have a real concern for intergenerational equity.
To that effect, I am happy to announce to you this morning that we have just signed a major partnership agreement with Cascades in terms of sustainable development. This agreement not only falls under the Desjardins Paper Challenge but is also part of our energy efficiency and waste management programs—areas in which Cascades has considerable expertise that will be put to work for us. This partnership also includes a commitment to consolidate and intensify our business together.
Finally, when we assess the changes in Desjardins governance in recent years, we can see that the establishment of the new Fédération enabled us to quickly shift to a unified strategic management structure for all of Desjardins Group.
A Desjardins Group president who is also Chief Executive Officer of the subsidiaries, the creation of strategic functions and orientation, coordination, supervision and governance mechanisms for the entire Group: all of these major changes have paved the way for an unprecedented level of collaboration among all of our components, which in turn has given us results that, today, have exceeded our original expectations.
We have become a truly integrated cooperative financial group.
Business development was another of the major objectives that I was committed to pursuing at the beginning of my term. In this regard, we definitely put the focus on asset management and services to businesses.
As shown by the growth of our market shares, we made real progress in these areas. In Quebec alone, for example, 2007 enabled us to reach the $100 billion mark for investment savings held with individuals.
To that we should add the fact that we have frequently surpassed the lofty targets set by our business plans. In addition, our trend scenarios are projecting us to even greater heights and we are proving that we are able to fulfill even the greatest of ambitions.
In these past few years, we also laid the foundation for further development of the Greater Montreal area and the various provinces across Canada.
A new partnership with the Ontario caisses populaires, the renewal of our agreement with the New Brunswick caisse network, the creation of Desjardins Credit Union, the establishment of service agreements with the Alliance des caisses populaires de l'Ontario and numerous Ontario credit unions, the development of business ties between Caisse centrale and several large financial cooperatives in Western Canada, the increased business volume for our insurance companies throughout Canada, the steadily growing Desjardins Securities team in Toronto: all of these achievements and many more demonstrate the real momentum of our expansion across Canada.
This new dynamic also coincides with our positioning around the Desjardins brand, which has become a true brand name for our financial group and the driver of a net increase in our visibility throughout Canada.
Closer ties within the Canadian financial services cooperative movement were also achieved through the 2007 creation of a jointly-owned mutual fund company. This tighter bond is being continued through dialogue stimulated by the new advisory board where the President and CEO of Desjardins Group is surrounded by several major representatives from caisses and credit unions across Canada.
On an international scale, we should also point out the growing interest of U.S. credit unions in the Desjardins business model. In addition, ties already created by Développement international Desjardins with its many partners around the world represent a business potential that we have undertaken to evaluate more systematically. The strong reputation and immense respect that DID has brought us constitute solid bases for our further explorations in that regard.
Furthermore, you know that we have made substantial efforts to develop our integrated brokerage firm, Desjardins Securities, in the past few years. I should like to mention that yesterday, March 28th, the Quebec government launched a medium-term bond issue worth $500 million, in which Desjardins Securities acted for the first time as co-leader, with a participation of close to 16%. This historic "first" testifies to the importance and skills acquired by our brokerage firm in the Quebec and Canadian markets and paves the way for promising developments in the years to come.
Growth in member satisfaction is certainly one of the achievements of which today I am most proud. Better satisfying our members means that we better uphold Desjardins' very reason for being.
In light of the annual surveys that were carried out by a number of serious firms with scientifically-proven methodologies, today we can affirm that: Yes, Desjardins is by far the most well-liked financial institution in Quebec.
We can also affirm, thanks to the spin-offs of a well-orchestrated information campaign and to a more complete measure of our various accessibility aspects that: Yes, Desjardins is recognized as being the financial institution with the most accessible services.
I was saying back in 2000 that we need to know how to ensure that our cooperative difference is able to bring more tangible benefits to individuals and to the community, with respect to both our services and our educational approach. Today, I'm happy to note that we have made progress in that direction.
Our attitude to members, our commercial practices, products and services that better meet all types of needs, our exemplary commitment to the community; all of this, with a great deal of perseverance, leads to achievements that are both noticed and appreciated and that are increasingly associated with Desjardins's cooperative difference. Surveys have confirmed this to be true.
More than ever, our cooperative difference is the result of our actions. It is also what enables us to affirm that Desjardins is more than a bank; that it is a cooperative working for its members and the community.
Business development is something that we know is just as solidly supported by engaging people and talent.
The various HR plans we have implemented have made Desjardins an increasingly attractive employer, offering rich career perspectives and a stimulating workplace that cares about personal balance, where training and continuous skills improvement—which are a source of autonomy—are highly valued.
What we have accomplished in this regard once again enables us to affirm that "we have built for the long term."
For me, the rebirth of the Desjardins Cooperative Institute is something else we can be proud of. It is the guarantee that we will continue to deepen our shared organizational culture. DCI is a place of learning and discussion that enriches us individually and collectively.
Today's market dynamics—and God knows how much more demanding it is becoming every day—strongly compel us to act.
For example, the fact that Desjardins Group overall is evaluated by rating agencies imposes a reassuring level of discipline and performance with respect to cooperative governance efficiency.
The payment of increasingly substantial member dividends—which we have quadrupled in the last eight years—in turn also strengthens our performance obligation.
We have taken wise and successful initiatives to increase our performance in our highly-competitive work environment.
Through amalgamations and territorial redistribution, the establishment of specialized business and administrative service centres, and an optimal organization of their sales force, the caisses have largely contributed to making Desjardins an effective and efficient organization with a great capacity for adaptation.
It also does not surprise me that, while managing their overall performance, the caisses have agreed to use common measurement tools and comparison mechanisms. I am convinced that this new culture of comparative performance, which demonstrates how far we have come in our attitudes, represents a solid guarantee of long-term continuity.
Since the year 2000, we have gone from annual surplus earnings that never surpassed the $500 million mark to surplus earnings that, for a 4th consecutive year in 2007, were around or even exceeded $1 billion.
In the last five years, we have maintained return on equity within our pre-set 12-to-15% range. Our Tier-1 capital ratio grew by two percentage points since the beginning of the decade, which is highly significant. Today, Desjardins finds itself in the very select circle of the 100 most stable financial institutions in the world, as listed by The Banker magazine.
Desjardins' financial strength and reputation for great stability played no small role in our two recent European market debt issues totalling nearly $1.3 billion, at very advantageous rates, despite the current financial crisis.
This is even more important since, although Desjardins' capital is by definition inalienable, it is not unassailable. Financial stability and sustainable performance will always enable the Group to deal with new difficulties, new competitors and new crises that arise on the markets, no matter how sudden, extensive or unpredictable.
Desjardins' new strategic management approach has made it possible for us to achieve a large part of the synergy potential for the Group.
The integration of Desjardins Trust's activities within the Fédération, the achievement of financial, operational and real estate synergies, as well as the creation of shared services units today constitute powerful drivers for Desjardins Group's financial performance. For the period from 2005 to 2011, there are about $900 million in additional before-tax surplus earnings that will have been generated through the efforts we have already expended towards achieving greater synergy.
This is a tangible, recurrent result that is a guarantee of long-term sustainability, which results from the choices we made and our tenaciousness in seeking out greater efficiencies for the caisses. I would add that we will have to renew our efforts to make innovation the driver of our progress—always basing our ability to innovate on a good reading of members' and clients' needs and informed acknowledgement of our new realities.
All of these efforts to improve our profitability have not been achieved through an uncontrolled race for higher returns. On the contrary, it is because we know how to balance our targeted financial performance with the expression of our cooperative difference, which also requires our attention, our time and our resources.
We are aiming for not only sustainable, but also overall performance. We know how to take the necessary means to make money work for people as tangibly as possible, thereby proving that a cooperative can succeed financially without losing its soul.
We are now proving that the cooperative business model is both modern and productive; that it is in fact better adapted than any other model to deal with the challenges of globalization.
This business model has proven itself around the world and is deployed here in several business sectors. When we see new health care cooperatives being established in growing numbers in various communities, we can but affirm that the cooperative business model always works for helping communities meet the challenges of today.
A number of years ago—and even still recently—we were glorifying the "Quebec, Inc." label, another model that, although it sometimes led to controversy, still generated moments of strong engagement and mobilization. But the world has changed and we must pay attention to the fact that the approaches available to us are no longer the same as they were 15, 20 or 25 years ago.
The great versatility of the cooperative formula, its capacity to adapt and the fact that it is resolutely turned towards action and self-sufficiency lead me today to believe that, after "Quebec, Inc.," we now are in the era of the "Canada and Quebec Co-op," carried forward by the values of cooperation.
We were in fact inspired by these very values as we built Desjardins Group to last and with it, our communities are better equipped to deal with the future.
Madam President, you have now earned the privilege to buckle down to the exciting task of guiding Desjardins Group in continuing its progress.
For me, the most powerful factor that I believe helped support me in my leadership was listening to people. Listening is something I define as borrowing intelligence from other people. And I can assure you that, in our vast Group, there are a lot of highly-intelligent, lucid and creative people.
Madam President, the vital force that sustains Desjardins asks only to follow you and to support you in carrying out your task. You can count on them—just like you can count on my support and availability.
And, since everyone here cannot wait to hear you talk about your vision and your objectives for the future, I will stop now. I will only take the time to once more express my full recognition and acknowledgement to each and every one of you here today, as well as to all our colleagues at Desjardins Group.
I would like to thank you for having made my time as president a gratifying experience and to enable me today to withdraw with the feeling of a job well done. The achievements of the last eight years are the result of teamwork, and you are the dynamic, indispensable and unforgettable members of that team.
I will not forget you, as many as you are, with so many great years still ahead of you at Desjardins and so many great things yet to accomplish.
To conclude, I would just like to say "Long live this great Desjardins Group," which will always remain very dear to my heart and of which I will always remain a very passionate member.
Thank you.
Money working for people
Copyright © 1996-2008, Fédération des caisses Desjardins du Québec. All rights reserved.