Sir John A MacDonald’s Mixed Legacy Serves as an Example of Governance within ESG

Governance is the third tenet of ESG and generally refers to the internal workings of a corporation and its impact on that company’s overall performance and public reputation.

This is where scandal is most likely to crop up, often suddenly and without warning, mainly because not enough attention is spent examining its roots.

And political and historical examples of the impact of scandals like this are not hard to find. One of the most prominent in Canadian history almost destroyed MacDonald while he was in office. Other events during his second tenure as Prime Minister have served to seriously damage his legacy.

Sir John A MacDonald – Father of Confederation

Though revered for his role as Father of Confederation in recent years Sir John A MacDonald has been criticized for his role in the creation of the Canadian residential school system. The recent discovery of mass unmarked graves at these schools has brought the horror of the residential school system. This has served to refocus our understanding of the efforts to destroy first nations’ social structure inherent in the system.

The Pacific Scandal leads to MacDonald’s defeat as Prime Minister

In his own time, MacDonald suffered his greatest electoral defeat in a political crisis that became known as the Pacific Scandal. Revelations in 1873 about money that was funnelled to MacDonald’s Conservative party by a financial conglomerate seeking the opportunity to build a Canadian transcontinental railroad led to his government’s defeat and the arrival of Canada’s second Prime Minister, Alexander Mackenzie.

Money was channelled to his Conservative Party by financiers behind the development of the Canadian Pacific Railroad.
Essential to the creation of Canada as a transcontinental nation, the Canadian Pacific Railway was a challenge to finance and build. MacDonald also claimed that the donations he and other Conservative politicians received were consistent with political donations of the time.

MacDonald returns and completes the Canadian Pacific Railway

Although at the time MacDonald assumed his political career was over his time as Leader of the Opposition did not last very long.

Mackenzie’s Liberal government only lasted until 1878. MacDonald remained as Prime Minister until his death in 1891. And during that second tenure, MacDonald was able to oversee the completion of the transcontinental railroad and drive in the final spike of the Esquimalt and Nanaimo Railroad on Vancouver Island in 1886.

Our review of the Residential School System has brought MacDonald’s legacy in stark relief

After returning as Prime Minister MacDonald commissioned a review of American efforts to use the school system to assimilate its aboriginal population. The Report on Industrial Schools for Indians and Half Breeds led to the creation of the Canadian residential school system.

At the time the Canadian approach was considered more cooperative and friendlier than the American efforts at “Aggressive assimilation”. However, in 2015 the Truth and Reconciliation Commission concluded that the Canadian residential school system amounted to cultural genocide.

Even now, we are coming to terms with its effect on our First Nations citizens and the inherent role that both the Canadian government and churches played in it.

The More Things Change the More They Stay the Same

Although it is fairly easy to find historical examples of politicians rocked by scandal, it is easy enough to find ongoing present-day examples as well. Resignations in 2021 by the Governor-General of Canada, Julie Payette and Governor Andrew Cuomo of New York are recent examples of that.

But a more relevant example for investors interested in political and corporate involvement in the environment was uncovered by the recent release of audio tapes detailing the efforts of Exxon connected lobbyists to influence American politicians and subvert American environmental change.(

When the story broke on British television, it prompted an immediate statement by the EXXON CEO denying that it was a reflection of Exxon’s position.

Teapot Scandal – An Historical Example of Oil Field Political Corruption

In a version of this story for an American audience, I would have written about the Teapot Scandal. It was considered the worst scandal in American history before Watergate. It involved the payment of bribes in exchange for unfettered and untendered access to government oil reserves in the aftermath of the First World War in the early 1920s. The parallels between these scandals are uncanny.