Betsy Powell continues to cover this evolving story for the Star, with her latest in the wake of the release of the Report here:
Robyn Doolittle also continues her good work here, albeit this is behind a Paywall for me
And a subsequent piece by her as well that I can see, which is based on insider intel to a degree here
For some unknown reason, I can see the text of this most recent article, as below:
Inside the Law Society of Ontario’s decision to release report on ousted CEOs pay rise
Published Yesterday
Listen to this article
As the head of the Law Society of Ontario’s board, Peter Wardle was among the first to speak.
Diana Miles, their chief executive officer, had betrayed them, he told the room of lawyers and paralegals, according to six people in attendance. It was his view that the board should terminate Ms. Miles’s contract immediately.
Around the table, people nodded and murmured in agreement.
This was March 5 at Osgoode Hall, the storied courthouse in downtown Toronto that houses the law society, the institution responsible for regulating, licensing and disciplining the more than 57,000 lawyers and 10,000 licensed paralegals in Ontario.
Mr. Wardle was addressing the board’s “benchers,” who are the law society’s directors. Earlier in the day, benchers were shown a report prepared by former associate chief justice of Ontario Dennis O’Connor, who had been hired to investigate the circumstances around how Ms. Miles’s compensation was dramatically increased to nearly $1-million in June without the knowledge of the board.
It appeared that Mr. Wardle’s predecessor, Jacqueline Horvat, had pushed the raise through unilaterally before she left the law society to become a judge.
After reading Mr. O’Connor’s conclusions, the board voted to fire its CEO.
A press release was issued stating that Ms. Miles was no longer employed by the law society.
Ms. Miles’s sudden departure rattled the legal community. Immediately, prominent lawyers and organizations began calling for the regulator to provide more details about what had transpired. But Mr. Wardle and the board were firm that that was not going to happen. Quietly, within Convocation, the term the Law Society uses to describe its board, some benchers began advocating for the report to be released.
Mr. O’Connor’s findings had raised serious concerns about the conduct of Ms. Horvat, who is now a sitting judge. The report had exposed glaring governance failures, particularly considering that this was an organization filled with lawyers. And then as time went on, more questions arose about Mr. Wardle’s handling of the crisis.
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Now, a controversy around executive pay and process was evolving into something even bigger. It has sparked fundamental questions about the extent to which the legal regulator has an obligation to the profession and the public to be transparent.
Through whistleblowers, details began to surface in the media, including in The Globe and Mail. After each new revelation, some benchers told The Globe, Mr. Wardle became increasingly furious with the “leakers.” Benchers were threatened with Code of Conduct proceedings. The Globe is not identifying any benchers because they are not authorized to speak publicly on the issue.
Still, some benchers – Sean Aylward, Bob Aaron, Ryan Alford, Lisa Bildy, Edward Choi, Murray Klippenstein, Frank McCrea, Louis Gagnon, Cheryl Lean, Trevor Townsend – began publicly calling for the report’s release.
On Wednesday, after a week of reporting that pieced together many of the details in the O’Connor report, The Globe sent the law society and Mr. Wardle a detailed synopsis of the findings, as well as additional questions, which they have still not answered.
On Thursday evening, Convocation did an about face, and voted to release Mr. O’Connor’s 67-page report, with the names of current law society staff redacted.
Mr. O’Connor – now a senior counsel at Borden Ladner Gervais LLP – had interviewed 15 individuals and collected reams of documents, including a trove of e-mail exchanges between the relevant players. The report begins with a lengthy legal analysis, in which Mr. O’Connor concludes that Ms. Horvat “did not have the authority to amend the CEO’s contract without Convocation approval.”
He is careful to state that it was not within his mandate to assign blame to individuals, but he notes that there were “ample red flags” that should have alerted Ms. Miles to the fact that her raise needed to go to the board. He also highlights numerous instances in which Ms. Horvat received pushback about her decision to act unilaterally.
Ms. Miles and Ms. Horvat declined to comment.
Tensions around Ms. Miles’s compensation are not new.
When Ms. Miles became the permanent CEO in 2018, after serving as acting chief executive, she was offered a base salary of $500,000 plus a 20-per-cent bonus. By 2023, her salary had increased to $595,000. (The Globe’s reporting indicates that her starting salary was slightly higher than what the previous CEO, Robert Lapper, had been earning.) Ms. Miles accepted, but felt the compensation was too low. She hired employment lawyer Megan Shortreed to assist with the non-financial terms of the contract.
That contract was put to Convocation for a vote and it was approved. In fact, Ms. Horvat had moved the motion, with Mr. Wardle acting as the seconder.
This was a tense period at the law society. In 2017, the regulator made it mandatory for lawyers to adopt a “Statement of Principles” acknowledging their obligations to promote diversity and inclusion. This led to some backlash in the profession. Most of the law society’s more than 50 benchers are elected and in the 2019 vote, a group of candidates successfully ran as a slate promising to “Stop the SOP.” They did not hold a majority, but board meetings became more adversarial.
In the ensuing years, Ms. Miles was told by then-board chair Malcolm Mercer that it was not a good time to ask for a raise. Even the annual debate every February about her 20-per-cent bonus was fraught.
But then in 2022, Ms. Horvat became “treasurer,” which is the board chair. She reached out to the law society’s external counsel, Dolores Barbini, to see whether it was possible to move the review of Ms. Miles’s bonus to the summer, which would fall after the 2023 bencher election.
Ms. Barbini had concerns: “In thinking more about this issue however, there does appear to be a potential issue regarding authority,” she wrote in an e-mail on Jan. 23, 2023. “I would not want any bencher to be able to argue that you were lacking authority to effect this change on your own. Is that something you would like us to consider?”
Ms. Horvat replied: “Yes, that is something that I would like you to consider. Let me know if you want to discuss or whether you need anything from me. There is a ‘compensation committee’ so one route that I considered was calling that group together to approve the decision.”
In the next election, a slate called the Good Governance Coalition – which promised to restore civility to the regulator – took on the Stop the Sop group (now called FullStop) and won. Today, both groups are represented on the board and tensions continue. However, the internal debate about the compensation controversy and calls for greater transparency do not fall strictly along partisan lines.
Individuals with knowledge of events, who cannot be named as they are not authorized to speak publicly on the matter, told The Globe that some of the Good Governance benchers – people with experience working in legal clinics and not-for profits – were shocked to learn what Ms. Miles was being paid.
Indeed at the February, 2024 board meeting about Ms. Miles’s bonus, benchers expressed frustration. Why was the CEO’s bonus awarded automatically every year with little debate? Benchers asked the compensation committee to come up with terms that would tie her bonus to performance, some of them told The Globe.
In his report, Mr. O’Connor underscores the fact that it was well known that Ms. Miles’s pay was a contentious issue.
Still, at the end of 2023, Ms. Miles asked Ms. Horvat and the compensation committee to reconsider her pay, given the new crop of benchers was “more sane.”
Sitting on that committee was Ms. Miles’s former lawyer, Ms. Shortreed, who had been elected to the board in 2019. Ms. Shortreed had disclosed her previous work for Ms. Miles to each treasurer, but it still created some friction. The O’Connor report noted that one of the other committee members, Geneviève Painchaud, texted Ms. Horvat in December, 2023, expressing concern that Ms. Shortreed had acted for Ms. Miles during the 2018 negotiations. She thought Ms. Shortreed should be removed. (In a statement to The Globe, Ms. Shortreed said she was unaware of Ms. Painchaud’s concern.)
In the early days of 2023, as the compensation committee began looking at Ms. Miles’s remuneration, Mr. O’Connor writes it was understood that any contract amendment would go to Convocation.
But sometime after February, Ms. Horvat raised the question of whether she had the authority to change the contract on her own. The report explains that the treasurer met with staff about the issue and left the “meeting being comfortable that she had the authority to amend Ms. Miles’s contract unilaterally.” Staff told Ms. Horvat that there were “gaps in the records” but it appeared that a previous treasurer had executed Ms. Miles’s 2018 contract without board approval. (This was not the case.)
Staff also advised Ms. Horvat that because the compensation committee was an “ad hoc” committee – rather than a standing committee – they believed its mandate could be unilaterally amended by the treasurer. (This point confused many benchers.)
Of note, a staff member – whose name is redacted – told Mr. O’Connor that they can understand why the treasurer left the meeting feeling she had the authority to act alone. However, the advice was not “emphatic or definitive.” And in fact, as things moved along, a staff member recalled telling Ms. Miles: “Do you really want to do this?”
Mr. O’Connor asked Ms. Miles her view on whether the treasurer could unilaterally amend her contract. In response, the CEO said she did not consult the bylaws and that “It would be up to the treasurer and the committee to decide on authority, not her.”
Ms. Horvat also told Mr. O’Connor that she did not “independently review the act, bylaws, or any records or other documentation.” Ms. Horvat told Mr. O’Connor that she relied on the advice of staff and that “she was busy with other things at the time.”
But she received other pushback. Compensation-committee member Michelle Lomazzo told Ms. Horvat she understood that any amendment to the CEO’s contract would go to convocation. Ms. Horvat replied: “no, I’ve checked, and I can approve it on my own,” Mr. O’Connor wrote. Ms. Lomazzo apparently replied: “but she’s our [Convocation’s] employee, and we approve her bonus, why wouldn’t we approve her contract?”
The report also mentions that Mr. Wardle attended an April compensation-committee meeting in which Ms. Miles’s raise was debated. (The issue of when Mr. Wardle learned about Ms. Miles’s raise is a matter of contention for benchers. He has previously said he “became concerned” in November, 2024.)
On June 21, 2024, Ms. Horvat and Ms. Miles signed the amended contract, which boosted her base salary to $936,800 and eliminated her bonus. A week later, she sent a copy of the amended agreement to Mr. Wardle, who had been elected as the new treasurer. (Ms. Horvat was appointed as a judge of the Superior Court of Justice of Ontario in July.)
Over the summer, Mr. Wardle settled into his new role. In September, he turned his mind to the compensation committee’s next steps.On Sept. 9, Mr. Wardle wrote to Ms. Miles: “Is there any formal obligation under the by-laws or in a policy to report to Convocation on your compensation?”
She replied: “No, there are no by-laws or policies with respect to CEO performance management.” She later added that one of the committee’s jobs was to: “make recommendations to Convocation relating to the Chief Executive Officer’s compensation.”
The report says Mr. Wardle felt obligated to inform Convocation about the amended contract. Even into November, he did not realize the issue would be contentious. It was only in the lead up to the November board meeting, when Mr. Wardle began making documents available to benchers concerning agenda items, that colleagues noticed references to an amended contract and began asking questions. It was at this point in late November that benchers realized they had a problem.
On Dec. 5, 2024, the board retained Mr. O’Connor.
A few days later, the CEO wrote to Mr. Wardle stating that “in the best interests of the organization,” she proposed going back to the terms of her previous contract, provided she could keep the money that had received under the amended agreement – and that the law society drop its investigation.
Mr. Wardle replied that it would be “unproductive” to accept her proposal.
anitaszigeti 