Good corporate governance matters to our shareholders, our customers, our employees, our communities – and to us. We strive to meet rigorous standards of corporate governance, following the best practices in our industry and meeting or going beyond regulatory requirements.
Our board oversees our business
Our Board of Directors supervises how we manage our business and affairs, so we choose board members with sophisticated expertise and a range of perspectives. The board makes decisions based on BMO’s strategies, core values, and the best information available. Its decisions emphasize long-term performance over short-term gain, and the board is accountable to our shareholders.
The board operates independently of management
The Chairman of the Board and our directors, other than the Chief Executive Officer, operate independently of management. Board meetings include time for the independent directors to meet without management or non-independent directors present.
To reflect our customers and our values, our board is diverse
The diverse backgrounds of our directors connect us with our customers, our markets and our employees. We believe this diversity also means we make better decisions. Our Board Diversity Policy received a 2013 Diversity in Governance Award presented by the Canadian Board Diversity Council. We also received the Canadian General Counsel 2013 Social Responsibility Award for our work on sustainability and diversity within the bank and the community.
We compensate our directors and executives in ways that encourage good decisions
Our model for compensating directors and executives follows best practices for good governance. We use a pay-for-performance model that includes clawbacks and discourages unreasonable risk-taking. Directors and executives must own shares, to align their interests with those of other shareholders. We do not allow directors and employees to hedge their investments in our shares, securities or related financial instruments.
We are committed to doing business ethically
FirstPrinciples, our code of conduct and ethics, guides our decision-making at every level. The Audit and Conduct Review Committee monitors compliance with the code and approves any exceptions, as appropriate.
Every director and employee commits to FirstPrinciples each year by signing an acknowledgment that they have read, understood and complied with FirstPrinciples. All employees are also required to take an online course to test their understanding of FirstPrinciples.
Our policy is to:
- encourage employees to raise concerns about ethical conduct
- allow people to report concerns anonymously through the Office of the Ombudsman or online, so they can speak without fear of retaliation
- investigate complaints and act on them, escalating issues to the board and Audit and Conduct Review Committee if necessary.
Our board and management stay connected with our shareholders
We engage our shareholders through the annual shareholder meeting, annual report, management proxy circular, quarterly reports, annual information form, sustainability report, corporate responsibility report, news releases and industry conferences. Our website provides extensive information about the board, its mandate, the board committees and their charters, and our directors.