Interview: Desjardins Group CEO Monique Leroux on taking co-ops national

“A business is not just there to make profit—it is there to bring value to society.”

Desjardins Group CEO Monique Leroux

(Portrait by John Londoño)

The accolades have not stopped flowing since Monique Leroux was elected chair, president and CEO of Desjardins Group in 2008. The Montreal-based co-operative’s 55,000 employees make it Quebec’s largest private employer and it’s consistently named one of the best places to work in Canada. Thanks to this former Quebecor, RBC and Ernst & Young executive’s risk-averse philosophy, Desjardins ranked second on Bloomberg Markets’ list of the world’s strongest banks last June. But Leroux isn’t dropping anchor: The company has been expanding westward, acquiring State Farm’s Canadian business in a deal that closed in January. Here she tells us why Desjardins is ready to go national and why her job goes well beyond the boardroom.

Desjardins Group recently expanded significantly outside Quebec, notably with the acquisition of State Farm’s Canadian operations, which closed Jan. 1 and made you Canada’s second-largest property and casualty insurer. Why is Desjardins seeking a national presence now?

When I was elected the chair of the board of directors and CEO of Desjardins in 2008, we were looking at the business in the context of the financial crisis. We talked about the importance of growth and of looking at the opportunities of the Canadian market, and the importance of having critical mass in certain lines of businesses. We concluded that it was very important for Desjardins not just to stay in Quebec but to capitalize on the strengths we had, especially in insurance and our card business, and to develop a growth plan across the country. Just look at the economy right now—sometimes it is good to have a more diversified economy, and it is the same thing for an organization like Desjardins.

Desjardins has won awards for employee satisfaction and engagement. How do you maintain a company’s culture during a time of so much change?

It’s non-negotiable, certainly at my level. We need to ensure we can be a performing organization, that we can grow. But at the same time, we must maintain our values and be successful in terms of mobilization of our people. Connecting with employees is fundamental. For example, if we have multiple meetings on the same day—say, one in Lévis, Que., and one in Toronto—I’ll sometimes join meetings of our employees or managers via Skype.

Last night there was a big event for the employees of a successful Desjardins caisse from the Montreal area. [Under the co-operative model, branches are members of the federation of Desjardins but have their own boards of directors.] The level of employee satisfaction at this caisse is over 80%, and the performance is at the top of our rankings. Financial services is essentially people talking to other people. Even though we are introducing more and more technology, it’s about creating connections and relationships. If you don’t have mobilized people, it is impossible to have that connection with the members and clients.

You were elected by members of the caisse rather than recruited or promoted like most CEOs. But you have worked for a traditional bank, RBC, in the past. How is your job as an executive different at a co-operative?

There are certain things that are similar, because at the end of the day, we are in similar businesses, right? RBC and others also want to have very satisfied customers. But there are major differences. For example, when it came to expansion outside Quebec, the typical process [at another bank] would be to meet with your board to discuss strategy, make a decision and move forward. But when we decided to go more proactively across the country, we had to hold a congress of all Desjardins’ elected officers—2,000 people had to meet in a room to talk about it. They talk, they discuss, they say, “OK, let’s do the vote” and you look at the screen to see the result, which in our case was close to 90%. It’s a major difference from a governance process, from a communication process. That’s the challenge but also the beauty of the co-operative system.

Is it a better system?

I’m not dogmatic about it. My view is not that we should transform the business community as a whole so that every company becomes a co-operative. But we live in a world right now where there are a lot of questions about income inequality. People look at some of those large corporations controlling the world and see the creation of wealth at a level that is incredible and it’s going to a small number of people. Many of those corporations have a very innovative, creative role in the world and the economy, and that’s positive. On the other side, you have governments that are pressured with public finances.

What I like about the co-operative model is that it’s a sort of in-between model. You have to bring people to understand the reality of the business, because if we want to be competitive, we need to perform—we cannot act in isolation. But on the other hand, you need to do a lot of education to bring all the people involved in your governance to understand these issues, to understand the economy better and to move forward. I think we should find a way to have more co-operatives to bridge the gap that we can see with these kind of inequality issues.

You helped found the International Summit of Cooperatives, and you’ve publicly called for more innovation and co-operation in the co-operative sector. What are you hoping to achieve?

The large co-ops and mutuals in the world are not very well-known. The reason is very simple: We don’t have common stock on the market, which means the financial community and newspapers don’t have a lot of interest. The first summit in 2012 was to inform people of the importance of the co-op world, to talk about its contribution and size. At the second summit, in 2014, I wanted to highlight the importance of innovation for co-ops, because most co-ops were developed as an innovation to start with.

Desjardins is a good example: When our founder, Alphonse Desjardins, opened the first caisse in Lévis in 1900, it was a new business model for North America. If we want to grow and stay pertinent, we should use the advantages of the co-operative model to innovate by working together. Think about what’s going on in Silicon Valley. Innovation is about a very open kind of system—it’s an ecosystem connecting different people, different ideas and so forth. What we are doing with Monetico is an example of this. In the payment industry right now, we have traditional competitors, but we also have new competitors like Apple, PayPal and Google. So we did a joint venture with Credit Mutuel, and we are in contact with other large co-operative players to see how we can develop our commercial solutions and services in the payment sector together.

You’re also on Finance Minister Joe Oliver’s Economic Advisory Council and the Catalyst Canada Advisory Board, among others. That seems like a full load. How do you manage it?

My view is that it’s part of the role and the responsibility of CEOs and chairs of large organizations. A business is not just there to make profit—it is there to bring value to society. I’m very convinced of that. So when some people ask you to serve, you have to serve. Now I am able to do that because I’m very well-supported. I have the privilege to be part of a fantastic organization, and I’ve got a very solid team of people working with me. When I’m busy in something, it gives the opportunity to others to take the lead.

For example, yesterday I was thinking about Desjardins’ marketing and communications strategy. I met with Marie-Huguette Cormier [Desjardins’ senior vice-president of marketing], and I said, “You know, Marie, I’m providing you with a few ideas. Some of them could be good; others, I’m not sure. Take it, go with it, and I will be there to support you.” And I’m sure that with her team, she will go further than if I try to do it myself.

You’ve said in the past that in order to have a strong pool of female candidates for board positions, you have to appoint women to senior roles. But you’re still the only woman heading a major Canadian financial institution…

I’m the only one, but I’m sure I will not be the only one in five to 10 years. There are really competent women who should be able to lead large financial institutions—I’m convinced of that. And I hope that what we’ve been able to do at Desjardins will help others move in that direction. As CEO and chair of Desjardins, I’ve been very active to improve the situation. It was important for me that we had a target of 30% to 35% women in senior positions. That’s what we are right now. We had to make some adjustments to the nominating and appointment process, because the funnel of potential candidates was too narrow. You need, at some point, to build experience to do the push.

It’s not just for women—it also applies to other groups who are not represented in your organization. At our congress of elected officers in 2013, the question was, “What should we do to advance women as elected officers and board members of the caisse?” We came to the decision to establish a voluntary target of 40%. And the board of Desjardins currently has over 35% women, which is quite good compared to others in Canada. But it’s not a topic that came naturally. As with everything in life, if you don’t have an objective, if you don’t have a dream, you will not be able to achieve it.