ILA Leadership Profile: Yves Wagner

ILA is 15 this year, but how did it all begin? We spoke to Yves Wagner who—along with the late Patrick Zurstrassen—did much to get the ball rolling in 2005.

At the dawning of the new millennium it was a source of considerable satisfaction that Luxembourg’s early work to build a cross-border investment fund hub had paid off. Yet with this success came realisation that the sector needed to become even more professional if global investors and regulators were to continue supporting this venture.




Taking the first step

“This was also the period of UCITS III, when discussions about fund substance began in earnest,” Yves recalls. “The industry realised more had to be done otherwise the activity we had built in Luxembourg might start to drift away to the larger financial centres,” he added. Moreover, this was the post dotcom era, and shareholders, regulators and commentators were increasingly advocating that all businesses embrace strong corporate governance values.

“The first requirement in Luxembourg was to share best practice and to organise training courses, so founding an association was the obvious step,” Yves noted. He and Patrick called up some of the biggest names in the local business scene, and these influential dozen became the founding members of ILA. They decided that Patrick should be the first chair.


Mixed early reception

Some players were enthusiastic, most notably the Big Four accountancy firms, and leading figures in the CSSF offered their approval behind the scenes. Yet more broadly it was sometimes difficult to attract attention. Understanding of the need for high standards of corporate governance and the value of independent directorships had not fully permeated local business culture. “We would hold meetings, and good work was done, but there was little of the dynamism we see today with ILA,” Yves noted.

Indeed he remembers that some international banking groups were resistant to the notion of their subsidiaries having greater autonomy. There was less understanding of the need for Luxembourg-based “substance”, and most often boards were filled by group employees. Yves and Patrick also had to push back given suspicions that ILA was little more than a vehicle to promote the Directors’ Office, the independent directors practice the pair had founded in 2003.


The game changer

The game changed with the global financial crisis and the subsequent regulatory wave. Closed group-think was seen to have facilitated the malpractice which so nearly crashed the global economy. Voters, investors, governments and regulators demanded action, and businesses having strong, experienced, well trained, diverse boards became a key part of the response. Global, European and local regulators demanded that Luxembourg’s boards be built up quickly. From an era where Luxembourg boards often had a somewhat formulaic role, now they needed to be highly professional with the capacity to take day-to-day decisions. 


Independence and diversity

Directors’ independence of mind was in vogue. “These changes played to ILA’s strengths,” Yves noted. “Interest in training blossomed, and the association worked with local and international organisations to make this happen. As well, directors wanted to network to find mandates and ensure they had the right tools for the job,” he added. The earliest members had been corporates but increasingly individuals joined. 

It was a sign of the times and the state of Luxembourg business life that these early moves were lead almost exclusively by men. Yet as the understanding of the value of cognitive diversity spread, so did realisation that boards and ILA itself needed to become more diverse. There was an obvious candidate to lead this change: Marie-Jeanne Chèvremont, who had been PwC Luxembourg’s managing partner for twenty years. She became ILA chair in 2011. Her contribution to the growth of the association will be highlighted in the next ILA Leadership Profile interview.