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‘Better not to sit in two places’: HO...

‘Better not to sit in two places’: HOOPP board overlaps raise concerns

April 28, 2017

Officials at the Healthcare of Ontario Pension Plan, the large institutional investor behind a $2 billion line of credit extended this week to struggling Home Capital Group Inc., say they were approached Tuesday by the mortgage lender seeking funding.

As soon as that happened, HOOPP chief executive Jim Keohane, who was also on Home Capital’s board of directors, “recused himself and turned the negotiations over to HOOPP staff,” Martin Biefer, a pension fund spokesperson, said Friday.

“They (the staff) made a decision on whether a deal was possible on terms that were favourable to HOOPP,” he said in an interview.

Keohane’s connection to both the borrower and lender led to questions about how the transaction came together, and whether there were any real or perceived conflicts of interest.

But Carol Hansell, a corporate governance expert at law firm Hansell LLP in Toronto, said corporate Canada is small enough that such overlaps are not as uncommon as one might think.

She said the key in such cases is how potential conflicts are handled.

“We would advise that in some situations it’s just better not to sit in two places,” she said.

“They will necessarily know a lot about both situations, and so it will be better for them to not have two masters.”

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