Is Michael Sabia the best man for the Caisse de dépôt et placement du Québec? His appointment as president and CEO is the latest controversy around the Caisse, the huge pension fund manager that lost a record $40-billion in 2008, a loss partly due to its risky strategies (it bought too much asset-backed commercial paper and invested too heavily in foreign real estate).
Mr. Sabia, a graduate of the University of Toronto and Yale, is a former federal civil servant who oversaw the privatization of Canadian National Railway as chief financial officer before becoming president and CEO of BCE Inc. It's the most recent part of his career - as head of Bell Canada's parent company - that many financial analysts consider "a mixed record."
Mr. Sabia inherited a messy situation at BCE and successfully streamlined its operations. His tough measures drew praise from some business circles and, predictably, ferocious resentment from those whose jobs were axed. "The guy single-handedly killed Bell," Mike L. wrote on a Globe and Mail discussion board, "and now he's working on my pension. If I want information about my pension, will I get shifted to some call centre in India?"
For retired journalist Ray Heard, Mr. Sabia "is the biggest upwardly mobile failure in our corporate history." More temperate critics say he is not qualified to lead the Caisse because he has no experience in financial investment. Others, such as La Presse columnist Alain Dubuc, argue that choosing someone "outside the box" might be "a daring but interesting move."


At first, the debate over Mr. Sabia was sidetracked by a deplorable attack from former premier Bernard Landry, who declared that Mr. Sabia was a bad choice because he was an Ontarian unfamiliar with Quebec's culture. Mr. Landry was left red-faced when it was revealed that Mr. Sabia has lived in Montreal for 16 years and speaks French (albeit not very fluently).
Fortunately, the controversy soon focused on Mr. Sabia's professional qualifications for the job. Yet, the issue has become a full-fledged political scandal because of the appointment process engineered by Premier Jean Charest.
Mr. Sabia, it turns out, was the personal choice of Mr. Charest, a selection ratified by a hastily called meeting of only four of the Caisse board's 12 members. Moreover, that tiny group included two persons who had also just been named as directors. (The CEO must be chosen by the board and the appointment approved by the government, not the other way around.)
Mr. Sabia's appointment occurred only days after Robert Tessier, the former president and CEO of Gaz Métro, was chosen Caisse chairman by the government. Mr. Sabia was selected from a short list of only two people provided by the headhunter firm Egon Zehnder International.
Mr. Tessier was so enthusiastic over Mr. Sabia's CV - "I had to meet him to see if he was real" - he didn't even bother to interview the other candidate (reportedly Luc Bertrand, former head of the Montreal Stock Exchange). "One wonders what Mr. Tessier was smoking," quipped La Presse columnist Sophie Cousineau, who thinks Mr. Sabia should have been disqualified over his lack of financial expertise and his mediocre performance at BCE. She says quite a few superbly qualified people would have been interested in the Caisse job, including Jean Raby, head of the Paris bureau of Goldman Sachs, and Alain Auclair, head of Canadian investment banking at UBS.
The controversy might have more to do with the Quebec government than with Mr. Sabia. The appointment process smacks of short-term political expediency, as if Mr. Charest wanted to divert attention from the flak he was receiving from the opposition, which accuses him of having called an unnecessary election before the publication of the Caisse's annual report. Indeed, the Caisse is such a huge economic player in Quebec that its failings inevitably become fodder for political partisanship.