Chaos, Continued

August 3rd, 2015

The Board of Directors of the Canadian Standards Association (CSA) has suffered a 42% cumulative turnover in the last six months.  That’s bad folks, there’s plenty of chaos at the top.

Average board turnover in North America is about 5% per year.  That is, in a given year a typical board of 12 people will replace only one of their directors (mathematically just under 1, being 0.6).  If we consider the institutional knowledge of the departing director as not immediately replaced by the new director, then the cumulative turnover is calculated as 10%, being 1.2 directors replaced.

In 2012, across all industries in North America, there were 291 new directors of a total of 5,184 director positions available (within the study group).  That’s a turnover of 5.61%.  So, the overall board turnover figures for 2012 are about average.

CSA however, doesn’t qualify as average.  Actually, their 2015 turnover is five times’ the average.  Since January, the CSA has replaced 25% of its directors.

Why so?  Well, this site may have something to do with it.

Prior to RestoreCSA the CSA board was relatively calm.  Its true that the place was never very stable, their turnover has consistently been higher than industry average.  Still, in 2010 the CSA board lost no directors whatsoever, and in 2011 they gained no new directors.  Cumulative turnover in the two years 2010 - 2012 was 13% and 19% respectively.  Those numbers are a bit high but not worryingly so.  But things changed in 2012.

In late spring of that year the CSA launched a lawsuit against PS Knight Co and, to the surprise of CSA, we fought back.  It looks like CSA did no due diligence at all prior to launching their litigation.  They didn’t know (so they claim) that PS Knight had received CSA’s formal assent to publish on electrical law and, most jarringly, they didn’t seem to have pondered the legitimacy of CSA -or any entity- claiming private ownership of domestic law.  All of these issues started seeing sunlight in that year.

By the end of 2012 the CSA board experienced a directors turnover far higher than the year before, it was six times the national average, cumulative turnover being more than 31% by year end.

In 2013 things got even hotter.  RestoreCSA.com launched in May of that year and immediately started exposing CSA conduct.  From that year’s highlight reel, we reported on CBC’s outing of CSA’s counterfeiting operations, CSA exemptions from transparency and accountability laws, the sale of access to public laws, their influence peddling activities and wild spending habits, and the CSA’s violation of copyright laws, among some other interesting and, from CSA’s perspective, highly embarrassing items.  We also exposed the conflicts of interest on CSA’s board, most notably in the directorship of Ms France Pegeot.  So how did the directors respond?

Well, by the end of 2013 the number of directors running for the door nearly doubled.  Exiting directors numbered 21% of the total directorship in that year.  That’s over four times’ the national average.

We kept up the pace in 2014.  In January we reported on CSA’s massive profit margins, noted their NAFTA violations and their sales of influence over safety standards.  By mid-year we had amassed a sizeable body of evidence on CSA’s manipulation and falsification of documents related to consumer product safety.  And we reported on these.  In late Summer, feeling the heat in more ways than one, the CSA board ordered their CEO, Ash Sahi, to fly to Calgary for a private meeting at the Palliser with your correspondent.  It didn’t go well, or quietly, as Palliser patrons can attest.  By year end, RestoreCSA had succeeded in the firing of Ash Sahi and the frightening of their President of Standards, Ms Bonnie Rose, into a Lou Pai-like exit from CSA.

The CSA’s 2013 jitters over RestoreCSA really picked up steam in 2014.  By the end of that year, fully 27% of their directors had quit their positions.  That’s nearly double their average turnover in the two years prior to RestoreCSA.  The 2014 cumulative turnover was 47%, being more than nine times’ the national average. 

In 2015 we uncovered Ash Sahi’s faked credentials, happily reported several months prior to his last day on the job.  Then we revealed CSA’s faked safety testing in Canada, their violations of public review laws and their amateurish acquisitions process, and the CSA’s manipulation of safety standards for commercial benefit.  In May of this year, we also reported on the sudden exit of Ms France Pegeot from CSA’s board.

As a result, 31% of CSA’s board have exited in 2015, and we’re only halfway through the year.  Officially, in this year alone, the cumulative turnover has now reached 61%.  That’s 12.31 times’ the national average.  In the last six months CSA has replaced 25% of the board members that they’d started the year with. 

High turnovers are indicators of problems at the top.  As one major study put it; “When the turnover rate falls outside the optimal zone, boards will want to satisfy themselves about the reasons why -and be prepared to communicate them to investors, who may increasingly consider board turnover as one of the many variables they use in assessing the quality of a company’s governance and leadership.”

And speaking of leadership, its amid all this chaos that CSA’s board is trying to hire a new CEO to replace the one we chased out the door in 2014. 

But the board isn’t worried about any of this.  Oh, no.  No, they’re comfortable, confident even.  As they said on March 26th of this year; “There is no doubt that […] the entire Board of Directors has full confidence in the existing senior leadership team”. 

Since then, four more directors quit the board.