Canadian Karen Badgerow, chief executive of the Financial Services Authority, has vowed to do all she can to protect Isle of Man residents who invest their money with companies in the island.
The 56-year old, who has been at the helm of the newly formed unified financial services regulator for one month, says she is ready for the challenges ahead helping do her bit to maintain the island’s reputation in the global business world.
She speaks of her commitment to ‘critical stakeholders.
‘When you talk about stakeholders you are talking about the depositors, the policy holders, the pension plan members, the people who entrust their funds to licence holders. They are critical stakeholders and they are very important .’
In her first interview with Business News she told how:
l She has never forgotten her working class roots having been the daughter of a nickel miner.
l Despite coming from one of the world’s largest countries she says there are some similarities in the way business is conducted in Douglas and Ottowa.
l She wants to play a full part in island life and is renting a home in Peel with her partner Brian and her pet mountain dog, flown in from Canada in the last few days.
l Revealed she encountered Mark Carney, the Canadian who now heads the Bank of England, when he was governor of the Bank of Canada.
She has more than 30 years’ experience in financial services regulation.
She spent the last two years as senior vice president (insurance and risk assessment) at the Canada Deposit Insurance Corporation (CDIC), a Federal Crown Corporation created by the Canadian Parliament with responsibility for insuring eligible deposits made at banks and other financial institutions.
She has years of experience in the regulation of deposit-taking, insurance and pensions business and prior to her role at the CDIC she held senior leadership positions at the Office of the Superintendent of Financial Institutions, Canada’s unified financial services regulator.
She stresses she has already found there is a ‘sound system of regulation’ in the island.
‘It’s really important for me as a regulator that we have a good level of stakeholder engagement so that we fully understand the issues and I think that is something the industry is looking for more of in terms of how we consult with them, how we provide our views back to them. So I think those are things we will be focused on as well.
‘And I think as well as being a regulatory system transparency is really important. How you supervise, how you make your decisions and how you intervene.
‘And those are important elements in a regulatory programme that I think all our stakeholders would be interested in.
‘Any regulator and anyone coming into organisations always says: ‘‘What can we do a bit different?’’, that’s a natural inclination. But there are a lot of very good things going on here which the island should be very proud of’.
Karen told of an incident in Canada that she often thinks of which she says puts things into perspective and helped her to understand the feelings of others.
‘Pensions were governed by the federal regulator and I headed up that pensions supervision area for the federal government. We had a particularly difficult case where we had a major stakeholder who was having financial challenges and owed a lot of money to the pension plan of members.
‘In fact it was a very public case and in the papers at the time. The [Canadian] government called a parliamentary hearing because they were very concerned about the potential loss. I remember going up to the House of Commons, the parliament in Canada, and I remember this elderly gentleman came over to me and he was dressed in what we call worker greens and he said to me: ‘‘please whatever you do don’t lose my pension.’’
‘That stuck with me because this guy, that was his ‘livelihood. And I realised that was my job at the end of the day. He was a stakeholder and we had a duty to protect him.
‘So through all the stuff you have to remember who your stakeholders are.
‘It’s a simple story but it has stuck with me. This gentleman had cut to the chase. Our job was to broker the best deal we could in the light of the circumstances.
‘That case really brought it home to me’.
Karen says she is happy to be quoted by her first name and not her official title of Ms Badgerow for this article.
She took up the post on November 1, the day the new Financial Services Authority replaced two bodies, the Financial Supervision Commission and the Insurance and Pensions Authority.
She has been getting to know her staff with one-to-ones.
‘I do love the challenge and the opportunity to work with a team to take them through a significant change. Bringing two cultures together, what an opportunity for us and for myself and for the new organisation.
‘My partner Brian Parkin’s father is from Liverpool and he had an aunt, who was a Shimmin, in the Isle of Man. So Brian had been here before in his youth’. Karen and Brian, 58, are enjoying the island and are happy with their home in Peel. They also love the outdoors.
Karen is also delighted to have been reunited with her dog, a mountain dog, Great Pyrenees, called Lamont.
She said that although she has come from one of the largest nations on earth there are similarities with the Isle of Man. ‘The land mass in Canada is massive but there are things that are similar. People are very accessible here [in Douglas] in terms of the people you want to talk to, people from government, the [financial] industry and in Ottowa it was very similar. All the heads of the major agencies involved in financial services regulation, work within three blocks of each other. Similar to here.’
She said the scale may be different but many of the issues faced by regulators were the same [as in Canada].
She said one of the challenges and issues is trying to find the right balance of regulation after the global financial crisis.
Then another challenge is looking at the jurisdiction and deciding what is right for the environment. International standards were ‘extremely important’ along with a sound regulatory system.
‘I love the breadth of things that will cross our organisation and things we will have to consider on a regular basis, it’s quite fascinating. Financial services regulation has a huge impact on economies and we recognise the importance of that for the island.
Karen knows another notable Canadian in the financial world, Mark Carney who is governor of the Bank of England. She said she met him numerous times when he was Governor of the Bank of Canada. ‘As I say Ottowa is small so we all worked together’.
‘He [Carney] is extremely bright and very engaged with the issues. It was a pleasure to watch him in the process of decision making.’
Asked what sort of regulator she is she said: ‘I like to think of myself as being fair and open.
‘It is making sure that we fully understand the issues. Making sure that we give the opportunity to be heard and give full consideration to the issues. And it is important we make decisions.’
Karen said she enjoyed meeting the chief minister Allan Bell. ‘It was really helpful to hear first hand his views and vision for the economy.
Asked about her style of doing business Karen revealed: ‘Someone once told me early in my career: ‘‘You are not a suit.’’
‘I suppose it’s true, I’m not the classic ‘‘suit’’ I guess in terms of personal style.
Karen told Business News she is proud of her working class roots. She said she grew up in a mining town. Her dad’s now 87 and he was a mechanic for the nickel mines.
She said her first taste of work was as a tour guide in the mines taking visitors as far as a mile underground in a cage.
This was in a place called Sudbury, Ontario, the ‘nickel capital of the world’.
She said that experience helped finance her studies at university.
She earned a Master of Arts degree in Public Administration and a Bachelor of Arts in Political Science from Carleton University in Ottawa.
Karen said Brian’s daughter Denia, 19, is in Toronto at university.
‘My youngest son Carson is 22 and he’s in the construction industry and my eldest son Dylan, is 26 and he is a budding entrepreneur [in Canada] I would say’.
She is looking forward to them coming over to the island soon. And what’s for certain is that Karen Badgerow certainly means business.