CAAT Pension Plan Faces Leadership Crisis Amid Governance Concerns
The CAAT Pension Plan, serving Ontario’s colleges and over 800 public and private-sector employers, is undergoing a significant leadership transformation. Recent weeks have witnessed a near-complete change in its senior leadership, triggered by a growing governance crisis.
CEO Placed on Leave, New Leadership Appointed
Derek Dobson, the Chief Executive Officer of the $23-billion pension plan, has been placed on administrative leave, effective immediately. This decision follows concerns raised by top executives regarding his conduct and oversight by the CAAT board of trustees, prompting multiple investigations into potential governance failures.
Kevin Fahey, recently promoted to Chief Investment Officer, has been appointed as CAAT’s acting CEO and plan manager. The plan has also named Audrey Wubbenhorst as the new board chair and Janet Greenwood as vice-chair.
Previous Leadership Removed
Don Smith, the previous board chair, was removed by the Ontario Public Service Employees Union (OPSEU) earlier this month, following reports of concerns surrounding board oversight and decision-making. Kareen Stangherlin, the former vice-chair, has also resigned as a CAAT trustee.
“The CAAT board of trustees has determined that these changes are in the best interests of the plan and are necessary to restore stakeholder trust in CAAT’s leadership, governance and plan management,” stated Ms. Wubbenhorst.
Internal Concerns and Investigations
Just last week, a CAAT spokesperson expressed confidence in Mr. Dobson’s leadership. However, a board meeting on Wednesday initiated the latest changes. The concerns stem from a $1.6-million vacation payout to Mr. Dobson, which deviated from company policy, and a personal relationship he maintained with a CAAT employee.
The vacation payout was the third of its kind, despite internal guidelines limiting vacation time carryover and payouts. The board also allowed the workplace relationship to continue, implementing measures to mitigate potential conflicts of interest, but it remained a source of tension.
Governance Review and Financial Health
An external governance review, initiated in December, is expected to conclude in February. CAAT assures stakeholders that the governance issues do not impact the plan’s financial health. Recent disclosures indicate a 124-per-cent funded status, with $1.24 in assets for every dollar of expected pension benefits. You can find more information about pension plan funding ratios at the Financial Services Regulatory Authority of Ontario (FSRA).
Regulatory Scrutiny and Impact on Morale
The Financial Services Regulatory Authority of Ontario (FSRA) is also investigating the situation at CAAT, speaking with employees in recent weeks. The leadership changes have created a void and significantly impacted morale, with long-tenured leaders departing with limited explanation. CAAT acknowledged the disruption in an internal email, emphasizing the need for stability.
Timeline of Events
The turmoil began in November when three top executives – Asif Haque, Mike Dawson, and Evan Howard – approached the board with governance concerns. These executives subsequently left the plan in January. CAAT responded by promoting Mr. Fahey to CIO and appointing Scott Blakey as interim executive vice-president and chief people and culture officer. Jillian Kennedy remains the chief strategy officer.
This period marks a significant turning point for CAAT, as Mr. Dobson had been the public face of the plan during a period of expansion.
