Bank of Montreal 2013 Annual Report Download - page 12

Corporate Governance
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.
20 BMO Financial Group 196th Annual Report 2013 BMO Financial Group 196th Annual Report 2013 21