Untimely deaths are the twists of fate upon which a company’s fortunes turn. The demise of a competitor’s key player could be seen as an advantage. But when death comes calling in your own boardroom, the repercussions are universally negative.

The Banner family of Brackendale, B.C., had much to celebrate in July of 1999 when it gathered with friends, employees and favourite customers to celebrate the 25th anniversary of Glacier Air. In the years since veteran bush pilot Ron Banner founded the company, he and wife Isabel watched with pride as their handsome trio of boys entered and gradually expanded the business. Capitalizing on the tourist wave generated by Expo ’86, eldest son Doug started a tour company to market Glacier Air’s flightseeing trips. Brother Michael took charge of ground transportation through Glacier Coach Lines. And in the air, where he always longed to be, was pilot Colin Banner, the lanky middle son with the infectious smile and unwavering joie de vivre. “The customers absolutely loved him,” Doug Banner remembers. “In the tourism world, you’ve got people who are good with people,” he says. “But in the aviation world, you’ve got pilots. And you don’t often have pilots who are also good tourism types.” Business was booming that summer. “We hired a salesperson for all three companies, and between them we had 45 employees. We had an office in Squamish with a gorgeous view and the runway right out front,” Banner says. “And my parents were just retiring.They worked very, very hard for a long time and they were going to sit on the balcony and watch the boys do all the work.” Colin had assumed ownership of the aviation division, turning his energies to renovating the hangar and earning his commercial helicopter license. He’d already logged 6,500-plus hours on a fixed-wing aircraft, many of them in his beloved, Swiss-built Pilatus Porter, equipped with hydraulic skis for landing on glaciers in the nearby Tantalus Range. But correctly predicting that the future of flightseeing lay with helicopters – which can fly at low speeds, land almost anywhere and don’t require costly runways – he imported a 10-year-old Aerospatiale AS 350 BA from New Zealand. The bright blue chopper was completely refurbished (“Essentially it was brand new,” family friend Dave Jevons later told reporters) and on August 15, 1999, was more than halfway through its first season in the Glacier Air fleet when it failed to return from a 30-minute ice-field adventure tour. On board, 37-year-old pilot Colin Banner and four passengers from Hong Kong: Grace Lee, 45, and her three children, aged 17 to 22.

When Colin Banner’s helicopter went down, a light went out. The Banners put their aircraft up for sale and what was left of the company was purchased by a former employee

“He’d been up three times that morning,” Doug Banner recalls, all uneventful trips. And although visibility wasn’t great, Colin had years of flying experience in misty West Coast conditions and was known to be a meticulous pilot who never took risks. The absence of an emergency locator signal initially gave the family hope that the aircraft had made a safe landing somewhere and was intact but disabled, with no radio function. But late the next day the wreckage was spotted in a chasm five kilometres west of Squamish. There were no survivors. Devastated, the Banners retreated into their private grief. “We were off for three weeks,” Doug says. “I came back to the office and just sat there and didn’t know what to do.” At some point a decision was made to honour the helicopter business still on the books, so a second helicopter and pilot were chartered. But a light had been extinguished. With the demise of the Royal Hudson steam train in 2000 and the terrorist attacks of 9/11, the bottom fell out of the Whistler tourism market. The Banners put their aircraft up for sale and what was left of the aviation company itself – Colin’s sparkling hangar, the office, the remaining bookings – was purchased by a former employee. Glacier Coach Lines was sold two years later. Doug Banner, who has retained his tour operation, remembers that “Nobody was happy about it. We felt like we were selling the memory, but at the same time you can’t go back. You can’t recreate things.” After the accident he set up his company “so it could be run without me” in the event of an emergency. Small business owners should look at their wills, he advises, and “Every couple of years, just ask themselves, ‘What if?’” Human resources experts euphemistically refer to the sudden death of a company owner or key player as “corporate loss.” It happens more often than you think, although there is only anecdotal evidence to suggest that CEOs are at greater risk of prematurely meeting their makers than the general population. Many top executives are Type A personalities who have a taste and income for adventurous, inherently risky pursuits; presumably heli-skiers outnumber bowlers in this group. But cardiovascular disease is the chief villain. University of Oklahoma researchers studying stock market reactions looked at the sudden deaths of 84 American CEOs of listed companies between 1983 and 2003. The average age was 61. Ten per cent of the deaths were attributed to an accident or suicide, 39 per cent to heart attacks. U.S. fast food giants have been particularly hard hit by the unexpected deaths of their corporate leaders. Wendy’s lost two chairmen plus company founder Dave Thomas in less than six years. McDonald’s executives in Illinois were still grieving for their late CEO, 60-year-old Jim Cantalupo, when it was announced that his successor, 43-year-old Australian Charlie Bell, was suffering from colon cancer. Cantalupo’s well-publicized death from a heart attack happened last April; Bell died in January. Other household names have experienced similar high-profile losses. Wall Street analysts say Coca-Cola has yet to fully recover from the 1997 lung-cancer death of its charismatic CEO, Roberto Goizueta. Disney president Frank Wells was fatally injured in a helicopter crash in Nevada in 1994. B.C.’s business community, too, has mourned the sudden deaths of company founders, leaders and key players. Vin Sood, president of Finning Tractor, ushered the Canadian company onto the world stage with brilliant acquisitions and a diversification strategy that continues to pay big dividends today –17 years after his death. Bev Armstrong, who with his brother co-founded the Great Canadian Railtour Co., operator of Rocky Mountaineer, the continent’s largest privately owned passenger rail service, died at home without warning at age 52 in 2002. That summer 45-year-old Rick Genest, executive VP of Polygon Homes and an athletic family man being groomed to succeed Michael Audain as CEO, was killed instantly when a boulder crashed through his windshield on a highway near Kamloops. Tireless B.C. film industry supporter Bob Scarabelli, president and CEO of post-production firm Rainmaker, collapsed after mountain biking in Pacific Spirit Regional Park last September, age 49.

Retired General Electric CEO Jack Welch says if anything happened to him, GE “would have moved ahead within an hour. At least twice a year at board meetings, we’d spend a great deal of time on the ‘hit by a bus’ scenario. We had a handful of people ready to take over”

Untimely deaths are the twists of fate upon which a company’s fortunes turn. The demise of a competitor’s key player could be seen as an advantage. But when death comes calling in your own boardroom, the repercussions are universally negative. There’s the immediate emotional toll on co-workers following the announcement. The resulting drop in productivity. The scramble to fill the leadership gap. The need to placate investors and clients and quell any fears or uncertainties. A corporate loss is the ultimate test of a company’s sensitivity to its employees and its ability to recover from a tragic ‘what if’ scenario it likely failed to anticipate. “Most companies manage it quite well,” says Robert Wilson, CEO and president of Wilson Banwell & Associates. The Vancouver-based firm is an internationally recognized leader in providing employee assistance programs (EAPs), including grief counselling in the workplace. How, when and where to break the news, Wilson points out, depends on the situation. “There should be a protocol in place so that key people are notified immediately,” by phone in the middle of the night, if need be. “Executives may decide to meet right away to ensure the safety of the company and consider any risks that need to be contained. They may discuss how to support the person’s family. They may want to grieve privately with each other.” As for the wrenching task of informing the remaining staff, “we recommend it be done at the worksite by the next in command. There needs to be an official recognition of the loss and an open discussion.” Grief counsellors were standing by the morning of March 6, 2005, when Eric Harris gathered his 60-person Vancouver law firm together. He was about to deliver the terrible blow that partner Adam Albright, 44, had died on vacation at the Kicking Horse resort near Golden, B.C. The respected labour lawyer had been skiing with his brother and friends. At the top of a lift, in a gesture that was typical of his team spirit approach to life, he apparently offered to scout the most rewarding route down the mountain for his group. There was fresh snow and conditions were ideal; Albright removed his skis, went to investigate and somehow lost his footing on a ledge. The fall – “a great distance,” Harris says – killed him instantly. [pagebreak] A tall, handsome, work-hard-play-hard bachelor, he was a company favourite; the nosy “Uncle Adam” who took a genuine interest in everyone’s personal life. Albright was a Toronto transplant who had been with the firm since 1992; he was also a popular adjunct professor in the UBC faculty of law, some of whose graduates he mentored. “He was a leg we stood on,” Harris simply states. Because Harris & Company lacked a space large enough to accommodate the entire staff, the employees were divided into two groups to hear the announcement; by the time they filed into the meeting room, the tears were already flowing. “In a business setting, you’re rewarded for being disciplined and composed,” Harris observes. “Business settings don’t invite intimacy.” But on this day composure was in short supply. “We gave each other permission to share our feelings, and we didn’t distinguish between employees. Everyone’s grief was valid.” The office closed for the day and the staff left, some alone and some in groups. Harris and his wife, also a partner in the firm, took a long walk along Spanish Banks. “We talked about Adam and about the unfairness of it all, and about what we could do for his family,” Harris remembers. He had faith “that we had built an organization that was resilient enough to deal with this tragedy.” The next day, in an atmosphere of unspeakable sadness, Harris and his partners got to work. Members of the firm were selected to attend the funeral in Toronto and flight arrangements were made. Others were deputized to review and reassign Albright’s cases and his fully booked calendar of court dates and other business. A memorial service at the Four Seasons Hotel was organized and paid for by the company, complete with a string quartet and an address by Temple Sholom’s Rabbi Philip Bregman. A tribute was posted on the company website. A deluge of sympathy cards, faxes, emails and letters arrived; they were carefully filed and copies sent to the family. On his return from the funeral, Harris himself wrote and circulated a detailed internal memo describing the event. “The lesson was to keep everybody informed and keep people busy with things.” Members of Albright’s family, in turn, attended the Vancouver service, met all the staff and were given private time in Adam’s office. The personal items they chose to keep were set aside and later couriered to them. The company’s basketball team retired his shirt, complete with “Meatball” nickname (as a teenager, Albright had a brief role in director Ivan Reitman’s summer camp comedy, Meatballs), enshrining it on the office wall. And Harris & Co. made a significant contribution to a UBC scholarship fund established in the lawyer’s memory. “Don’t minimize the death,” Robert Wilson advises. Respect the bonds between co-workers. “We often spend more time at work than we do with our families. This is the most important social exchange in our lives. Let your employees properly grieve.” Typically, he says, office routines return to normal within a week of the death, usually after the funeral or memorial service has been held. “Things tend to have settled down by then, especially if managers have taken steps to reassure everyone that the company is on course.” Ongoing confusion, anxiety or an interruption in work flow are signs that reassurance from above is either weak or missing altogether. “There could be a wealth of misinformation and faulty assumptions floating around,” Wilson suggests, particularly when an owner, CEO or high-profile executive dies suddenly. Rumours may circulate that the business is being sold, that suppliers or customers have lost confidence in the company’s ability to move forward without its creative spark, or that deals and projects already in the works will be compromised. Open communication will help shut down the rumour mill. But advance planning might stop the wheels from grinding in the first place. What kind of paperwork needs to be done? Think succession plans, shareholder agreements and key-person life insurance. Retired General Electric CEO Jack Welch says his board “would have moved ahead in an hour” to name his successor in the event of a calamity. “At least twice a year at board meetings, we’d spend a great deal of time on the ‘hit by a bus’ scenario,” he told the Wall Street Journal. “We had a handful of people ready to take over.” A succession plan is integral to a company’s future, along with who is in control of its shares. The sudden death of a key player who also happens to be a major shareholder in the company could trigger a crisis if the shares automatically revert to the next-of-kin – a family member whose vision for the company is at serious odds with its board of directors. “Companies should have buy-sell agreements to dictate what happens to the shares when someone dies,” says Nick Smith of Vancouver’s Legacy Tax & Trust Lawyers. If the beneficiaries (perhaps the current spouse and a child from an earlier marriage) dispute the ownership of assets, the shares, a judge could freeze them. “That poses a problem for a company, say, that needs the approval of three-quarters of its shareholders to get things done. If more than one-quarter are tied up and an outsider has control over the voting rights, it could cause a nuisance.” Smith recently witnessed the paralysis of a Vancouver manufacturing business after the well-intentioned owner died and left it to his daughters in a 50/50 split. “They can’t get along, and since neither has a majority interest in the business, no decisions are being made. The goodwill of the company is suffering.”

Collateral Impacts: when the owner of a Vancouver manufacturing business died and left the company 50/50 to his daughters, paralysis ensued. They couldn’t get along and since neither had a majority interest, no decisions could be made

The example reminds Smith of a sobering statistic: “Eighty per cent of family-owned companies do not survive operation by the next generation.” In a worst-case scenario, a controlling shareholder CEO’s failure to seek estate planning advice could lead to the dissolution of a company. It happened in the mid-’90s when Reginald Lewis, chairman of New York based-TLC Beatrice International Foods, died of brain cancer at age 50, six weeks after diagnosis. Forbes estimated his net worth at US$400 million; the Harvard law grad had been called “the wealthiest black man in history,” an “iron-willed negotiator” who executed some spectacular corporate buy-outs, including forking over almost US$1 billion for Beatrice and its 64 companies in 31 countries.

Heartbreak up close In the corporate world, succession plans, buy-sell shareholder agreements and key-person insurance policies are all part of the landscape. Still, in any business you have to be aware that something can happen. That something happened at the company I work for, Uniglobe Travel, on December 20, 2003. Since my husband’s aortic valve replacement at age 44, we’ve made a few trips to the emergency room at Lions Gate Hospital in North Vancouver to deal with a complication or seek reassurance about a temporarily erratic heartbeat. And on that Saturday afternoon in December we were there again. Hours dragged by as we shifted around on our metal chairs in the crowded hallway outside the minor treatment rooms. The single nurse on duty waged a losing battle with the rising tempers of her charges. Not one physician ventured beyond the swinging doors separating us from the main emergency room. In response to yet another agitated query from the hallway gang, the nurse snapped, “I don’t know when the doctor will see you. They’re trying to save a woman’s life in there!” I reluctantly went home, leaving John to the long wait ahead. Eight hours later he returned, valve ticking perfectly, feeling relieved but still ashen-faced. “It was pretty bad after they admitted me,” he reported, describing the intense scene in the trauma room. “I saw a girl in riding boots being led away crying and hysterical. I think her mother died.” The next day, checking emails from my office where I edit a magazine for Uniglobe Travel, I opened an internal memo from the company’s founder and CEO, U. Gary Charlwood: “It is with deep regret and sorrow that I advise that Laurie Radloff, Regional President, Uniglobe Travel (Western Canada) tragically passed away on Saturday after being kicked in the chest by a horse . . . Our hearts go out to her husband and daughter . . .” The coincidence was heartbreaking. Radloff had been an enthusiastic supporter of the magazine, an effervescent and results-driven entrepreneur whose contributions to the company were legion. She was the first franchisee to open doors under the brand name in 1981 when she launched a Uniglobe Travel agency at the tender age of 24 in Cranbrook, B.C. She had been both president and owner (with several partners) of the region since 1989 and was intimately involved with every aspect of the 56-agency system. “She built Western Canada,” acknowledges Kelowna-based partner Ron Russell. “What we have today is the result of her hard work and dedication.” The mood was sombre at head office on Monday morning. Staff members fielded phone calls from shocked franchise owners and suppliers. And with Christmas only three days away, a grief-stricken Charlwood sat down at his desk, collecting his thoughts for a eulogy he never imagined he would have to write. Russell and his partners, meanwhile, hurried to Vancouver to comfort the family, address stakeholders and start the search for an interim president. “You have to act quickly, but not in a rush,” he cautions. “Laurie’s people really rose to the occasion; they knew what a shock the news would be to the franchise owners, the suppliers, everyone. So we made sure everyone knew that it wasn’t going to be business as normal, but that the business would carry on.” As Russell points out, “When you have a loss like this, you have a bit of a stall. Some things were delayed six to 12 months.” [pagebreak] In a challenged industry like travel, Radloff’s experience and trusted relationships were worth platinum to her company. Saddened but determined to build on her successes, Uniglobe Travel’s Western Canada office bounced back.

In early 1993, management of his snack food, beverage and grocery store conglomerate was first handed over to a three-person office, then briefly to his half-brother, attorney and former football player Jean Fuggett. Before the year was up, Lewis’s widow Loida was named to the CEO post. Two years later, under increasing pressure from investors, she began selling off the branches of the company, and by 1999 the entire enterprise had been liquidated. Arguably TLC Beatrice’s pivotal, most important human asset was Lewis himself. And assets like those deserve an insurance policy. Key-person life insurance is designed to offset the losses caused by the untimely death of the owner, CEO or other vital employee. Rank, however, is less important than the person’s bald financial worth to the company when deciding who should receive coverage. A pharmaceutical company might insure the life of a scientist on the verge of a breakthrough in cancer treatment or a software developer might spring for a policy on a top-performing sales manager with decades of experience and a lucrative, painstakingly nurtured customer base. Annual premium cost: on average, $1,000 per employee. The beneficiary, i.e., the company, pays for the policy and should the darkest hour arrive, uses the proceeds to buy the deceased’s shares, fulfill any contractual agreement to extend his/her salary to the family for a period of time, initiate the search for a replacement or simply pay the bills. For a small business entirely dependent on the skills of a single person – a dental practice, for example – a cash influx could mean the difference between laying off the entire staff and shutting the doors if the dentist suddenly passes away or hiring a locum to continue to treat patients and keep the business viable. In an April 2003 CFO Asia magazine feature on this topic, writer Ross Banham reported, “It has been rumoured for years that Robert Maxwell, the British media mogul and owner of the tabloid Daily Mirror, who either fell, jumped, or was pushed to his death from his yacht in 1991, had taken out a US$100 million key-person life insurance policy just weeks before the plunge.” No word on whether the claim was paid out. In a modest, family-owned operation there is understandably little appetite for planning how the principals would cope with the accidental or premature death of one of their own. It’s just too painful to contemplate. “I suppose I always had a plan in the back of my mind,” admits Doug Banner, owner of Pacific Spirit Tours. Could Glacier Air have weathered the dramatic downturn in tourism had Colin Banner lived? “I think about him every day – his picture is on my computer – but I don’t go there,” his brother replies quietly. “Once in a while I take out the little book of stories about him.” Containing photographs, poems and contributions from family, friends and co-workers, the book is an endearing tribute to the company’s late owner; Doug sent a copy to everyone who attended the funeral. The senior Banners also honoured their son’s memory by creating the Colin Banner Aviation Scholarship Fund to assist new pilots in advancing their careers. Psychologist Robert Wilson encourages companies “to do something to focus their grief such as setting up a memorial or scholarship fund to which group or individual contributions can be made.” Management should involve employees in the creation of a memory album or wall plaque for the office. A key person should be assigned to stay in touch with the deceased’s family. “People need an opportunity to talk and share,” Rabbi Philip Bregman explains. “The workplace becomes a very sterile place if there’s no genuine interaction.” The sudden death of a company’s key player in mid-life, particularly someone who leaves a young family behind, can trigger an extraordinary outpouring of support. After Rainmaker CEO Bob Scarabelli’s passing last September, mourners donated $12,000 in his name to BC Children’s Hospital and a further $25,000 was collected to endow an annual scholarship for a film/video student at the Emily Carr Institute. Celebrations of Scarabelli’s life included “a gathering of all the big studio heads from MGM, 20th Century Fox, Disney, etc. at the Mondrian Hotel in L.A. last December,” his wife Luci reports. To date, the mother of two has also accepted several posthumous awards for her husband and observed the laying of a stone in his memory on a Dunbar playing field (Scarabelli was an active baseball and soccer coach). But what she treasures most is how Rainmaker’s creative teams put their skills to work producing videos of the events, recording all the tributes and accolades. “I feel very fortunate to have these for my children,” she says. “They contain many wonderful stories of Bob’s incredible reputation in the film community and how he was a friend to so many.” Polygon Homes made considerable contributions to a UBC Building Science scholarship in the name of its late VP, Rick Genest, and to the renovation and enhancement of a Cypress Park Little League diamond dedicated to him in West Vancouver. And in memory of Laurie Radloff, an energetic supporter of the Foster Parents Plan, Uniglobe Travel raised $60,000 to construct, renovate and equip five vocational schools for girls in Guinea, Africa. Four more centres than her original wish. She’d be proud of us. “Extremely pleased,” according to Ron Russell. But on the business side, “she’d give us hell for a couple of the decisions we made,” he confesses. “She was an advocate of tough love, and we purposely erred on the side of leniency” in the months after her death. “You don’t replace a Laurie Radloff or try to duplicate her.”