It was completely in character for Rowland Fleming. Monday morning, April 19, the soon-to-be former Toronto Stock Exchange president arrived without fanfare at TSE headquarters. Fleming, who is known to be uncommunicative at best and abrasive at worst, went straight to his office and began packing his books and personal belongings. A few hours later, he walked out of Canada’s largest stock exchange, making no effort to tell puzzled TSE employees that he would not return.
Fleming’s departure was not entirely unexpected. But the manner in which it was handled—the abrupt exit, followed by a terse announcement from Barbara Stymiest, chairwoman of the TSE board of governors, that he had resigned to “pursue other interests”—threw Bay Street into a tizzy. For the first few days, the absence of solid information led to wild rumours, ranging from a suggestion that Fleming, 55, had been asked to leave over the gift of a condominium from IBM (which did not make any such offer and does not even trade on the TSE), to the notion that he had quit to run as a Progressive Conservative candidate in Ontario’s looming election (which the party denies).
The actual story is, as always, more prosaic and more layered. It also has as much to do with the changes sweeping Canada’s stock exchanges as with Fleming himself. In the past, TSE members were content to
overlook managerial foibles. Fleming’s predecessor, Pearce Bunting, could never come to grips with the pace of technological change and yet ran the TSE for 17 years, retiring at 65. Before Bunting, TSE presidents tended to stay until they died or grew too dotty to get downtown. Fleming, however,
found himself the first TSE president to be judged by the same tough standards as executives at the companies whose stocks and bonds the TSE trades.
After 23 years with the Bank of Nova Scotia and four years working for Toronto financier (and former Ontario lieutenant-governor) Hal Jackman, Fleming was hired in 1994 to run the TSE. He oversaw the move to fully computerized trading, defended the
TSE’s role in the Bre-X stock scandal and became a key player in this year’s massive reorganization of four Canadian stock exchanges—under which all equity trading done on the Montreal Exchange moves to Toronto. Fleming was often credited for accomplishing difficult tasks, such as shutting the trading floor, that previous TSE managers had found too painful to implement.
About a year ago, however, TSE member brokerage firms began grumbling about his methods and temperament. They balked at what it cost to fix the potential Y2K bugs in the exchange’s computers, wondered why so many top TSE executives left, and complained that Fleming acted as if he, rather than the members, owned the exchange. “Rowland didn’t go out of his way to build bridges,” says TSE board member Paul Bates, president of Charles Schwab Canada. As early as April, 1998, TSE governors wrestled with the issue of whether to look for a replacement, but put the decision on hold—until a few weeks ago, when Fleming caused a furor in Quebec by remarking that Canada could function perfectly well with a single Toronto-based stock exchange.
His remark came in the midst of sensitive talks aimed at swapping I Montreal’s equity trading for I Toronto’s derivative business. I This was the final straw—and £ Fleming was asked to step down, sources say. But TSE employees are still in the dark about what caused their boss to take his leave. “Nothing has come down to us” by way of an explanation, says TSE spokesman Steve Kee. What is certain is that the TSE board hopes to have a new president in Fleming’s office for its June 10 annual meeting—by which time somebody may have figured out exactly what happened to the previous occupant.
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