- Our core values guide the board’s oversight, relationship with management and accountability to shareholders
- Our governance responsibilities are integral to our performance and long-term sustainability
- We embrace high standards of corporate governance, which reflect not only applicable legal and regulatory requirements but also evolving best practices
- Sound corporate governance is the foundation for responsible business behaviour towards our shareholders, employees, customers, and the communities and environment in which we operate
“The Board of Directors of Bank of Montreal is committed to leadership in corporate governance.”
David A. Galloway
Chairman of the Board
Bank of Montreal’s Board of Directors is responsible for the supervision of management of the business and affairs of the bank with the objective of enhancing shareholder value. The recent financial crisis has highlighted the importance for the board to provide well-informed strategic direction and oversight that looks beyond short-term financial performance. The board’s focus on corporate governance is seen in its various practices and procedures.
The board has adopted position descriptions for the Chairman of the Board, the committee chairs and the directors, all of which are available on our website. The board’s mandate outlines the general responsibilities of the board, while the bank’s board approval and oversight guidelines define the roles and responsibilities of the board and management and explicitly delineate the lines of accountability within the bank.
The Chairman of the Board is an independent director who ensures that the board operates separately from management and that directors have an independent leadership contact. The chairman manages the affairs of the board, with a view to ensuring that the board functions effectively and meets its obligations and responsibilities, including its responsibilities to shareholders. In 2010, the board approved a written process for the appointment of the Chairman of the Board.
FirstPrinciples, our comprehensive code of business conduct and ethics, provides a framework for directors, officers and employees on their conduct and ethical decision-making. The board, through its Audit Committee, reviews the operation of FirstPrinciples. Each year, every director, officer and employee must sign an acknowledgement that they have read, understood and complied with FirstPrinciples.
Our whistleblower procedures allow officers and employees to report violations of FirstPrinciples, and concerns regarding accounting, internal accounting controls or auditing matters on a confidential and anonymous basis. The board believes that providing a forum for employees and officers to raise concerns about ethical conduct and treating all complaints with the appropriate level of seriousness, including escalation to the board and Audit Committee where appropriate, fosters a culture of ethical conduct within the bank.
The bank’s director and executive compensation programs are strongly aligned with governance best practices. Minimum share ownership requirements for directors and executives ensure the alignment of interests with shareholders. Our executive compensation programs establish clear pay for performance linkages. The programs, which include the use of clawbacks, do not encourage excessive risk-taking.
The board and its committees play a central role in the enterprise’s risk management framework, including through the approval of our corporate policies and the guidance provided by the risk review committee of the board.
The board supports the bank’s efforts to communicate with its shareholders and other stakeholders through a variety of channels, including the annual report, proxy circular, quarterly reports, annual information form, news releases, website and industry conferences. In 2010, the board approved a shareholder engagement policy promoting open dialogue and the exchange of ideas with the bank’s shareholders.