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A person walks by the Royal Bank of Canada building on Bay Street during the COVID-19 Pandemic in Toronto on Wednesday, May 27, 2020. THE CANADIAN PRESS/Nathan DenetteNathan Denette/The Canadian Press

BCE Inc. chief executive officer Mirko Bibic is joining the board of directors at Royal Bank of Canada, expanding the powerful web of bankers and executives who straddle two of Canada’s largest industries.

Mr. Bibic, a former corporate lawyer and regulatory expert, will join RBC’s board on Aug. 1, and will be a member of the bank’s risk and governance committees, RBC announced on Wednesday. Mr. Bibic has been CEO of BCE, the parent company of Bell Canada, since January, 2020.

He is also a director of Maple Leaf Sports & Entertainment Ltd. and of the Business Council of Canada.

The appointment draws two of Canada’s largest companies, which are already intertwined, even closer. Former RBC CEO Gord Nixon chairs BCE’s board, and former RBC executive Jennifer Tory is also a BCE director. She joined BCE’s board in April, 2021.

The country’s three telecom giants are major customers of the big banks for loans and other financing arrangements, and the banks’ asset management arms are significant investors in the telecom companies. Company filings show RBC subsidiaries are some of BCE’s largest shareholders.

At the same time, banks rely on cable and wireless networks to underpin transactions and digital banking functions, as was evident when Rogers Communications Inc. suffered a day-long outage last week.

Sarah Kaplan, distinguished professor of gender and the economy at the University of Toronto’s Rotman School of Management, said in an interview that the largest companies have “a tricky balance” to strike between having directors who are truly independent – “which means that you really do have people who bring that outside perspective – and making sure that you have people who have deep knowledge of what is going on in the company.”

Given their relationship, there is a business case for tapping each others’ ranks for board expertise. Banks and telecoms are both part of the core infrastructure of the country, and each is heavily regulated.

“There’s a whole bunch of reasons where the sharing of knowledge might make business sense,” she said. “However, I think the risk is, one, the conflict of interest that comes also from the degree of enmeshment between all of these businesses. Being on each other’s boards, it just raises tons of conflict-of-interest concerns.”

The frequent overlap among executives and directors carries the danger of “locking in one way of thinking about things, and that creates risks of its own,” she said.

In a news release, the chair of RBC’s board, Kathleen Taylor, said Mr. Bibic “brings deep strategic, operational, governance, and risk experience across a wide range of commercial and consumer portfolios in the communications sector.”

Over the years, board governance experts and investors have put more emphasis on appointing truly independent directors, which has forced major changes, such as separating the roles of board chairperson and CEO.

But it is still common for current and former top executives to serve as directors at companies where they have close business ties and relationships.

Mr. Bibic’s predecessor at BCE, George Cope, is now board chair of Bank of Montreal. Another major telco, Telus Corp., has two prominent bankers among its directors: Canadian Imperial Bank of Commerce CEO Victor Dodig and former BMO chief financial officer Tom Flynn.

John Manley, who used to be CIBC’s chair, is also on Telus’ board, and Martine Turcotte, formerly a long-serving BCE executive, sits on CIBC’s board.

Nadir Mohamed, the former CEO of Rogers Communications Inc., has been a director at Toronto-Dominion Bank since 2008.

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