Michel Bergeron Ceo Panel 2
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Michel Bergeron Ceo Panel 2

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  • 1. Governance at BDC Michel Bergeron, Vice-President - Corporate Relations ADFIAP - October 2009
  • 2. Governance at BDC What is Corporate Governance? It refers to: What are the structures, systems and practices for overseeing the direction and management of an organization, so that it carries out its mandate and objectives effectively. Governance at BDC
  • 3. Governance changes in Canada in last 15 years Few Governance Committees Executive Committees were the norm CEO – had most of the power No performance evaluation of the Board Role of the Board was decorative No independence Focus of the Board now more on high level strategies Governance at BDC
  • 4. Governance at BDC (cont’d) Canada’s approach to governance in Crown corporations: Arm’s length = Autonomy Counterbalanced by Accountability and Transparency Need to have clearly defined roles and structures through a well defined legal framework Governance at BDC
  • 5. Governance at BDC (cont’d) A fine balance between: Autonomy: Non-partisan, non political provider of service In charge of its operations Able to resist inappropriate pressure Has a Board of Directors comprised of independent directors Clearly defined mandate – Sustainable financially Accountability: Parliament Board Minister Management Governance at BDC
  • 6. Governance at BDC (cont’d) Parliament of Canada BDC Act Financial Access to Administration Act Information Minister of Industry BDC Board of Directors BDC Management Governance at BDC
  • 7. Governance at BDC (cont’d) Parliament’s Oversight: Annual Report (every year): -Public (AG) Annual Audit – 2 Auditors -Private Corporate Plan (every year) Special Exam (every 5 years) Legislative Review (every 10 years) Access to Information Act (ongoing) Governance at BDC
  • 8. Governance at BDC (cont’d) What is the Board’s role Is a steward to BDC Ensures that BDC’s activities are aligned with its public policy mandate Is responsible for: Approving BDC’s strategic direction and corporate plan, and monitoring progress Ensuring BDC is identifying and managing its risks Establishing compensation policies, and reviewing and approving management’s succession plan Reviewing BDC’s internal controls and management information systems Governance at BDC
  • 9. Governance at BDC (cont’d) What is the Board’s role Is responsible for: Overseeing communication and public disclosure Setting performance targets and monitoring progress Overseeing BDC’s pension plan, and establishing its fund policies and practices Ensuring the highest standards of corporate governance Governance at BDC
  • 10. Governance at BDC (cont’d) How does good governance happen? The Chairperson plays a leading role in leading in Governance by fostering certain behaviours: Integrity Independence of Mind (for both directors and management) The right tone at the top (from the Chairperson and the CEO) Promoting transparency and discussion Governance at BDC
  • 11. Governance at BDC (cont’d) The Chairperson ensures that: The Board adopts a clear description of its role The right committees are created and they have clear responsibilities (Terms of Reference). BDC’s Board has five committees: Human Resources Audit Credit/Investment & Risk Governance/Nominating Pension Funds Investment Formal interface with Shareholder – Through the Minister Governance at BDC
  • 12. Governance at BDC (cont’d) The Chairperson ensures that: The Board, the Committees and the Directors evaluate their performance yearly The Directors receive proper orientation and continuing education Governance at BDC
  • 13. Governance at BDC (cont’d) Other areas where the Chairperson will impact Governance: Effective recruitment of Directors with the right skills and competencies for the Board Effective contribution stems from knowledgeable and well informed oversight Governance at BDC
  • 14. Composition of the board Senior people with expertise in: credit (at a large financial institution) risk management venture capital investments (general) chief executive officer of a large enterprise ownership or leadership of an SME financial literacy and expertise Governance at BDC
  • 15. Governance at BDC (cont’d) Also means, the Board focuses on Corporate Strategies: Participates actively in the development and approval of the Corporate Plan: Meets yearly in the fall, followed by many discussions and approval of the Corporate Plan in January Reviews and approves strategic programs and policies including HR compensation policies, succession planning, performance evaluation of the CEO Recommends candidates with the right set of skills and competencies for the Chairperson and CEO positions for appointment by Government Governance at BDC
  • 16. Governance at BDC (cont’d) Workplace environment Conductive to Good Governance Core Values Employee Code of Ethics Conduct, Ethics and Client connection Values Team spirit Board Code of Conduct Accountability Clear Policy on disclosure Work-life balance of wrongdoing: referred to Audit Committee Referral Policy Governance at BDC
  • 17. The board Average year: 6 to 10 meetings Fiscal 2009: 15 meetings. For a summary of our important decisions, please see the annual report Governance at BDC
  • 18. 1-888-INFO-BDC www.bdc.ca Business Development Bank of Canada Head Office 5 Place Ville Marie, Suite 300, Montréal, Quebec H3B 5E7