Bank of Montreal 2002 Annual Report Download - page 12

8BMO FINANCIAL GROUP ANNUAL REPORT 2002
BOARD OF DIRECTORS CONTINUED
Stewardship
The Board of Directors, either directly or through Board
committees, is responsible for supervising the manage-
ment of the business and affairs of BMO Financial Group.
Among its many specific duties, the Board approves
strategic plans and objectives, provides advice and counsel
to the CEO, oversees the ethical, legal and social conduct of
the organization, and reviews BMO’s financial performance
and condition. It also selects, evaluates, sets the compen-
sation for and, if necessary, replaces the CEO.
The Board fulfills its stewardship responsibilities
through various initiatives. For instance, it sponsors an
annual all-day strategy session, which enables directors
to gain a fuller appreciation of planning priorities and
provides them with the opportunity to give constructive
feedback to management. The Board also ensures we have
a prudent and professional risk management framework,
and confirms the integrity of the organization’s internal
control and management information system. Additionally,
the Board oversees succession planning for senior man-
agement, including the CEO. Ensuring fair treatment of
shareholders, irrespective of the size of their individual
holdings,isalsoaprincipalconcernfortheBoard.
Independence
The Board of Directors is responsible for making sure that
appropriate structures and procedures are in place so that
it can function independently of management.
All members of the Board are “unaffiliated”, with
the exception of the Chairman and CEO, pursuant to the
relationship rules set forth in the Bank Act. The current
15-person Board is a very workable size for effective
decision-making and committee work.
At the same time, the Board ensures that all of its
committees are composed of outside directors, except the
Executive Committee, which includes the Chairman and
CEO as a member. (Full details of the committee mandates
are set out in the Proxy Circular.)
Additionally, the Board mandates the Chair of the
Governance Committee to serve as the lead director and
chair in camera sessions held during every Board meeting
at which only non-management directors are present. It is
also the responsibility of the Board to assess the appropriate-
ness of any shareholder proposals for inclusion in our Proxy
Circular and to formulate responses to those proposals.
Independent governance is further ensured by our
Board Approval/Oversight Guidelines, which clearly dis-
tinguish matters requiring Board approval from those within
the purview of management, which are reported to the
Board after the fact.
Effectiveness
The Board is responsible for ensuring its effectiveness.
To that end, it monitors membership in order to maintain
the necessary breadth and diversity of experience as well
as the appropriate size. In addition, the Board oversees
orientation and education programs for directors. As part
of the orientation program, new directors meet one-on-one
with the heads of each of the principal business groups to
discuss the business functions and activities of the organi-
zation. On a regular basis, presentations are provided to
directors on the various aspects of BMO’s operations.
EVA LEE KWOK
Vancouver, British Columbia
Chair and Chief Executive Officer
Amara International Investment Corp.
J. BLAIR MACAULAY
Oakville, Ontario
Counsel, Fraser Milner Casgrain LLP
Toronto
THE HONOURABLE
FRANK MCKENNA,P.C.,Q.C.
Cap Pelé, New Brunswick
Counsel, McInnes Cooper
Moncton
BRUCE H. MITCHELL
Toronto, Ontario
Chairman and Chief Executive Officer
Permian Industries Limited
PHILIP S. ORSINO,F.C.A.
Caledon, Ontario
President and Chief Executive Officer
Masonite International Corporation
Mississauga
CORPORATE GOVERNANCE AND BOARD OF DIRECTORS