'I wish it never happened."
For the past 90 minutes, Denis Desautels has been reflecting amicably over lunch on a career that included a decade-long stint as Auditor-General of Canada and another decade as chairman of Laurentian Bank of Canada.
But the soft-spoken Mr. Desautels's mood darkens as he speaks about his role in the largest corporate takeover in Canada, the 2007 sale of Alcan Inc. to Rio Tinto PLC, when he was chairman of the Alcan board's audit committee.
"I wish Alcan was never sold for the atrocious price it sold at," he says, a rare whiff of bitterness taking hold. "That transaction made the shareholders of the time rich, but so what? It's basically dismembered what was a nice organization, with a solid management team, a head office in Canada, with all the benefits that go along with that. And it's making the shareholders of Rio Tinto unhappy. So there are a lot of negatives about this."
When I point out Mr. Desautels did well personally by Rio Tinto's $101 (U.S.)-per-share bid, he spits back: "Yeah, but I don't care. I'd go back. I'd reset."
It says a lot about Mr. Desautels that the biggest regret of his career would, for others, serve as a crowning achievement: Presiding over a deal that enriched shareholders at a peak in the commodities cycle with an offer that was too stupid to refuse.
But it's not the only thing troubling Mr. Desautels on this day in late May. After a career providing oversight to public and private institutions, the latest headlines have been all about abuses of government finances, including the Senate spending scandal and Quebec's Charbonneau Commission. "I find what's coming out is quite discouraging," Mr. Desautels says.
While he believes the longer-term trend has seen generally improving accountability and controls in public institutions, "for someone who tends to look to the positive side, it sets me back a bit," he says.
At 70, Mr. Desautels remains a much-sought-after and active overseer and voice of conscience by major organizations across Canada. He is chairman of the audit committees of both industrial giant Bombardier Inc. and Quebec pharmacy retailer Jean Coutu Group (PJC) Inc.
Meanwhile, the federal government has engaged his services to provide guidance and oversight on several files, including a rethink of the country's controversial jet-fighter purchase plans.
"His only fault, which we tease him about, is that he doesn't know how to say 'No,'" says Sheila Fraser, his successor as auditor-general and former colleague at Ernst & Young.
For our lunch, Mr. Desautels has chosen Le Café, a long-favoured dining spot of official Ottawa alongside the Rideau Canal, now seemingly a bit sidelined after several quality restaurants opened in the past 15 years.
I'm surprised upon arriving shortly after noon on a bright spring day that less than one-quarter of the tables on the expansive, awning-covered patio are occupied.
Mr. Desautels arrives a few minutes late, dressed in a blue suit and yellow tie and apologetic. A practising Catholic and family man, he is a humble and extremely private individual, who nonetheless participates in weekly "Rideau Club Roundtable" lunch discussions with a coterie of retired senior bureaucrats and politicians.
He has barely sat down before a smiling elderly man drops by to warmly pay respect – Charles-Antoine St-Jean, the former comptroller-general of Canada.
Mr. Desautels hails from St-Bruno, east of Montreal. The fifth of seven children, he worked summers at the Mount Bruno Country Club, caddying for top Montreal executives. After growing up a unilingual francophone, his mother decided Mr. Desautels should attend high school in English in Montreal, an adjustment that took him two months to overcome. He became interested in accounting and studied commerce at McGill University, where he met his future wife. Upon graduating in 1964, he joined audit and accounting firm Clarkson Gordon, later part of Ernst & Young. His career path "unfolded quite well for me, quite fast," he says and he was made partner at 29.
Mr. Desautels split his 27-year career at Ernst & Young working in Montreal, Ottawa and Quebec City. One client was engineering firm SNC, now part of SNC-Lavalin. Asked what he thinks of the firm's recent scandals, Mr. Desautels says he's "both surprised at the turn of events and very disappointed. I doubt the SNC that I knew would have gotten into this kind of trouble."
After a couple of executive exchange terms in the Office of the Auditor-General of Canada, a task force of accountants suggested Mr. Desautels as a candidate to succeed Kenneth Dye, which he did in 1991.
"I had my own agenda coming in," Mr. Desautels said. "I focused on what I thought were some of the real challenges of the day, namely the government's financial situation. My first objective was to see what role I could play in generating some consensus around the need to do something about that. I didn't want anybody to say, if Canada ran into difficulty, 'Well, where was the auditor-general?' So I sent plenty of warning signals about the path we were on."
"There is no doubt that in the awakening of public opinion and government opinion [about the debt and deficit] he was certainly one of the people who understood and played a very important contributing role to the understanding of the whole issue," says Paul Martin, who led the charge to address the government's fiscal challenges as finance minister in the 1990s.
That didn't mean Mr. Desautels eschewed the usual gotcha-style audits of government spending – his audit of spending controls in the human resources department dominated headlines in 2000.
Mr. Desautels's exit in 2001 was well-timed. Accounting scandals at Enron and Worldcom were shining an unflattering light on public corporations and leading to sweeping regulatory changes. Corporate boards were casting about for fresh faces to upgrade their tainted images as accomplices to greedy CEOs.
With his track record and experience, Mr. Desautels was an obvious choice. Then-Laurentian Bank CEO Henri-Paul Rousseau was the first to call.
"The day I saw he resigned, I talked to the other people around the board table," recalls Mr. Rousseau, now vice-chairman at Power Corp. of Canada. "We knew that we would need a person like him down the road to be chairman of the board, and he had the capacity, no doubt in our minds."
Mr. Desautels's appointment was quickly followed by invitations to join the boards of Alcan, Bombardier and Jean Coutu. Until recently, he was also chair of the Accounting Standards Oversight Council and a director of CARE Canada.
He's still on the Board of Governors of the University of Ottawa and International Development Research Centre and serves on the finance council of the Catholic Archdiocese of Ottawa.
Mr. Desautels digs into his seared wild B.C. salmon with champagne tarragon vinaigrette and sides of fennel, endives and arugula. He notes me watching as he scrapes back the skin and deposits it in the corner of his white rectangular plate. My sable fish – seared and served with fiddleheads, cherry tomatoes, roasted corn and crab – is excellent, but I've put it aside to take notes. "Now you have to eat yours, too," Mr. Desautels says.
As a corporate director, Mr. Desautels wins praise as a capable, actively involved board member who improved financial reporting and internal controls, and helped corporations make the transition to international reporting standards.
"He was very willing to ask questions others might not ask because it might show they didn't know something," former Alcan chief executive Richard Evans says.
Mr. Desautels says he's content with the performance of Laurentian, Canada's seventh-largest bank, even though its stock has chronically lagged its larger peers.
"It's a small bank and obviously we cannot match the returns of the larger banks. But we built a good organization and are delivering very respectable results," he says.
Mr. Desautels is still busy, but he's winding down his commitments, spending more time in his garden and planning to write a family history to leave to his descendants.
For now, he's looking forward to a vacation with his wife to Alberta and B.C. at the end of summer. "I've done a lot of interesting trips, but you always seem to be pressed for time," he says. "This time I'm not scheduling anything before, during or after. It will be one trip where I'm really not taking the office with me."
Hometown: St-Bruno, Que.
Personal: Married to Shirley Leuthold for 47 years. They have three sons and eight grandchildren
Education: Bachelor of Commerce from McGill University, 1964; became a chartered accountant in 1966.
Pastimes: Golf, gardening, skiing, history, spending time with family.
1964-1991: Worked for Ernst & Young in Montreal, Ottawa and Quebec City. Made partner in 1973 at age 29. Served in various positions, including senior partner of the Montreal office and regional director of consulting services.
1991-2001: Served as auditor-general of Canada
2001-present: Former chairman, Laurentian Bank of Canada (retired 2013), chair of the audit committees of Bombardier Inc., Alcan Inc. (2003 until 2007 sale to Rio Tinto PLC) and Jean Coutu Group (PJC) Inc. boards. Member of Board of Governors of the University of Ottawa and International Development Research Centre.
2001-2012: Member of Accounting Standards Oversight Council of Canadian Institute of Chartered Accountants.
2001: Invested as an Officer of the Order of Canada.
2013: Winner, Institute of Corporate Directors Fellowship Award.
Current appointments: Serves as chair of the selection committee of the Prime Minister of Canada's Outstanding Achievement Award and as a member of the Expert Panel on Securities Regulation in Canada, the governance committee of the National Fighter Procurement Secretariat, and Parliamentary Precinct Oversight Advisory Committee.