CFO of the year

By Paul Brent

One hails from the food industry and the other from the energy sector, but their respective successes in steering their companies through the recession has made Cynthia Devine and Richard Bird winners of Canada’s CFO of the Year award for 2010. Devine, 46, is a CA and CFO of Tim Hortons Inc., and Bird, 61, who holds an MBA and PhD, is executive vice-president, CFO and corporate development of Enbridge Inc.

Cynthia Devine, CFO of Tim Hortons, and Richard Bird, CFO
of Enbridge, are the first-ever co-winners of CFO of the year

Despite their different backgrounds and industries, the two executives were chosen the first-ever co-winners in the award’s eight-year history because they “demonstrated vision, innovation and leadership within their organizations and in their communities” at “a time when the challenges brought on by Canada’s economic turbulence have tested the mettle of CFOs all across this country,” says Michael Conway, CA, national president and CEO of award founder Financial Executives International Canada (FEI Canada).

Both companies demonstrated how they were able to continue growing and thriving, notwithstanding the recession. Peter Dey, chairman of Paradigm Capital Inc. and chair of the CFO of the Year selection committee, says, “The CFO would have had a very significant role to play in both companies to ensure that the companies were properly funded [and] had a strong capital base. And both were active in developing and implementing strategy.”

Devine and Bird were selected from a short list of 10 candidates drawn from submissions from the ranks of CFOs of publicly traded companies. CFO of the Year co-sponsors PricewaterhouseCoopers LLP and The Caldwell Partners International worked through the submissions to create the short list.

As the CFO of North America’s fourth-largest publicly traded restaurant chain based on market value, Devine got high marks from the nine-member judging panel for her hands-on involvement in raising same-store sales at Tim Hortons during the prior two years, a period dominated by the economic downturn. “I know that [Devine] was heavily involved in business decisions such as store design, food products,” says Dey.

What also stood out to the judging panel was her efforts last year to transform Tim Hortons from US public company status to being a Canadian public entity. “For Tim Hortons [that] created a lot of long-term shareholder value and brought us back to the roots of this great company,” says Devine.

“It sounds kind of simple when I say we put a Canadian company at the top of the structure, but it was very complicated from a tax and legal standpoint to be able to effect this reorganization,” she says. A triangular merger transaction, making Tim Hortons Canadian again, involved “certain tax issues in both jurisdictions we had to overcome to assure ourselves that there wasn’t anything that was going to upset the tax authorities and making sure from a legal standpoint [that everything was OK].
Then we had to get approval from shareholders.”

The high point of the 12-month repatriation effort that included a team of lawyers, tax professionals and accountants came last fall when Devine hosted a visit from Prime Minister Stephen Harper and Finance Minister Jim Flaherty to celebrate the company’s corporate homecoming. “It was great having them here; it created quite a stir at the company,” she says.

Devine joined Tim Hortons in 2003 after having been senior vice-president of finance at Maple Leaf Consumer Foods and CFO of Pepsi-Cola Canada Ltd. She is also a director of ING Direct Canada.

Enbridge’s Bird attributes his recognition as CFO of the Year to the company’s “successful navigation of the global financial crisis, which commenced in mid-2007, peaked in late 2008 and continued through much of 2009,” he says. The Calgary-based energy company was in the midst of the largest capital program in its history — a total of $12 billion — as the capital markets collapsed and bank credit became scarce. “Despite the financial crisis, Enbridge’s corporate finance and development team managed to fund all our capital commitments on very favourable terms,” Bird says, “enabling the company to achieve record earnings growth of 25% in 2009, and establishing a strong foundation for further growth.”

Financial highlights for Enbridge over the past two years include maintaining more than $8 billion of bank credit facilities for the company’s capital program and the successful sale of its two international pipeline interests in Spain and Colombia, which provided almost $2 billion of capital for reinvestment. As well, Enbridge created a hedging program to protect it from potential future volatility in interest rates and from swings in the US-Canadian dollar foreign exchange rate. “Nearly half our earnings are in US dollars, so a significant depreciation in the US dollar versus the Canadian dollar would detract from our growth in earnings,” says Bird. “Consequently, we hedged 80% of our forward US earnings through 2013 at an average rate of $1.22, versus the current rate, which is approaching par. For similar reasons, because of our large asset base and associated financing requirements, we locked in the underlying benchmark rates on 100% of our floating rate debt and anticipated term debt issuance, through 2013.”

Bird, who credits what he calls his all-star team of financial professionals for his recognition this year, also points to his inclusion in Flaherty’s advisory committee on finance and involvement in a number of community and social initiatives such as the United Way of Calgary, the Calgary Drop-In and Rehab Centre and the Angkor Hospital for Children in Cambodia.

Dey says the judges were impressed by Enbridge’s superior financial performance versus its competitors’ and its growth. “This is a company that has diversified into other geographic regions, Quebec, New Brunswick, the US, and it has been active making acquisitions during the recession,” he says. “I think there was both a financial and strategic component.”

Bird joined Enbridge in 1995 and previously worked as vice-president and treasurer, senior vice-president of planning and development, and executive vice-president of Enbridge’s Liquids Pipelines division. He serves as a director of Enbridge Income Fund, Enbridge Pipelines Inc., Enbridge Gas Distribution, Noverco Inc. and Bird Construction Income Fund.

Canada’s CFO of the Year Award is presented annually by FEI Canada, PwC and The Caldwell Partners International and cosponsored by the CICA. The award was created to recognize and honour the quality, insight, direction and leadership of Canada’s senior financial executives.

Devine and Bird join past winners David Garofalo, CA, of Agnico-Eagle Mines Ltd. (2009 winner); Bruce Waterman, CA, of Agrium Inc. (2008); Marvin Romanow of Nexen Inc. (2007); Karen Maidment, CA, of BMO Financial Group (2006); Claude Mongeau of Canadian National Railway Co. (2005); Peter Rubenovitch of Manulife Financial Group (2004); and Peter W. Currie, formerly of Nortel Networks and RBC Financial Group (2003).

Chartered accountants are well represented in the ranks of winners, notes FEI Canada’s Conway, a former vice-president and chief accountant of Royal Bank of Canada and vice-president and controller of BCE Inc. Interestingly, three of the last four winners of the award are CAs.

“These two professionals are leading examples of how CFOs help drive business profitability and position their company for the next stage of success,” says Gino Scapillati, national managing partner of PwC. “This year’s winners come from differing industries and backgrounds and are equally deserving of this distinction to recognize the outstanding achievements they are making as champions of their business.”

Ron Charles, managing partner, The Caldwell Partners International, says, “The role of a CFO goes far beyond balancing the books of their business. It takes superior strategic leadership, financial management and corporate development skills, a commitment to good governance and a passion for making a positive impact on their industry. This award recognizes individuals who possess all these characteristics and sheds light on the instrumental role CFOs play in Canadian business.”

Bird and Devine were honored at a gala dinner May 6, 2010 in Toronto.

Paul Brent is a Toronto-based freelance journalist