Bank of Montreal 1998 Annual Report Download - page 102

Board
■A Charter of Expectations for Directors is in place for the Board.
■Board policies include:
– attendance at less than 75% of meetings automatically triggers resignation
– mandatory retirement at age 70, and
– the required tendering of a director’s resignation on change in principal occupation.
■An annual director peer performance review process is in place, using an outside consultant
to compile results.
■An annual assessment of Board performance is conducted, using an outside consultant to
compile results. The results are reviewed with the Governance Committee followed by a
presentation to the full Board.
■There is a comprehensive orientation and education program for new directors.
■Annual all-day strategy sessions are conducted to ensure directors are fully versed in the Bank’s
strategic plan.
■An electronic directors’ network provides continuous and timely communication with directors.
Board Governance
and Administration
Committee
(“Governance Committee”)
■Responsible for the Board’s governance program, including staffing and functioning of the Board,
and evaluation of all aspects of governance.
■Established in 1991.
■Entirely comprised of outside, independent directors.
Board Independence
from Management
■Board policy ensures that no more than two directors are from management.
■Chair of Governance Committee serves as lead director and chairs “in camera” (management
directors absent) sessions of the Board during every Board meeting.
■Approval and Oversight Guidelines set out those matters requiring Board approval versus those
within the purview of management, which are reported to the Board after the fact.
■Directors are annually designated as to their status – “related” or “unrelated”. For 1998, 15 of 16
outside directors were “unrelated”. One was “related” because his company is a customer of the
Bank. This proportion far exceeds the level required by the Bank Act.
■Human Resources and Management Compensation Committee is responsible for CEO succession
planning, monitoring succession planning at lower levels of management, and providing oversight
of all other key aspects of the human resources management policy.
Setting Agendas ■Committee chairs and other directors submit items for inclusion on Board agendas.
■Following every committee meeting, committee chairs report to the full Board on activities of
their committees.
■Committee chairs and committee members develop the agendas for their respective committees.
Board Composition
and Director Selection
■Governance Committee establishes Board committee structure, determines composition and
mandates, and recommends director nominees to the Board.
■Governance Committee determines size of the Board, its composition and membership mix,
as well as the process for selection of independent directors.
■Governance Committee is also responsible for director succession planning.
■All committees are composed of outside directors except Executive Committee, of which Chairman
and CEO and President and COO are members, and Risk Review Committee, of which President
and COO is a member.
■Committees engage independent consultants as they see fit to assist in discharging their
responsibilities.
Accountability
for Performance
and Competence
94
BANK OF MONTREAL GROUP OF COMPANIES
CORPORATE GOVERNANCE AT A GLANCE