TD Bank 2006 Annual Report Download - page 10

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TD BANK FINANCIAL GROUP ANNUAL REPORT 2006 To Our Shareholders
TO OUR SHAREHOLDERS
Chairman of the Board’s
Message
2006 was another outstanding year for TD Bank
Financial Group – one that saw the Bank build
value for our shareholders, deliver exceptional
service to our customers, and invest in our
businesses and the future.
The Bank’s strong financial performance led TD’s Board to
increase the total dividend per share to $1.78, an increase of
12.7% over last year. In 2006, TD’s total shareholder return
was 20.3%. Over the past three years, we have increased the
dividend 6 times for a total increase of 50%, and the Bank’s
total shareholder return has increased 62.3%, a testament to
TD’searnings strength.
FOCUS ON THE FUTURE
TD continued to invest for the futurein 2006, in part, through
aU.S. growth strategy in TD Banknorth and TD Ameritrade.
Reflecting the importance of these investments, our directors
worked closely with the management teams of TD Bank Financial
Group, TD Banknorth and TD Ameritrade, providing strategic
counsel and advice. The Board remains confident that TD’s
management is executing on a two-pronged U.S. growth
platform that will enhance shareholder value for the long term.
LEADING THE WAYIN GOVERNANCE
TD has made many governance enhancements in recent years
that have ensured that both the Boardand management goals
are aligned and focused on their responsibilities to shareholders.
I’m pleased to report that in 2006, TD was recognized for having
one of Canada’s top boards by The Globe and Mail’s Corporate
Governance Rankings. TD was also the recipient of the 2006
Best Governance Award from Investor Relations (IR) Magazine
in Canada. This external recognition is the result of the
commitment that our directors and senior executives have
made to leadership in corporate governance.
I’m also proud to recognize that the Bank attained Sarbanes
Oxley (SOX) 404 certification this year,which strengthens the
financial controls we have throughout TD. This certification
involved a tremendous amount of work by TD employees, our
auditors, and with the oversight of the Board’sAudit Committee.
In 2006, the Board also refined TD’s director evaluation
processes, further improving how directors receive feedback.
This work refines our framework for providing constructive
input, improving directors’ individual skills and how the Board
functions as a whole.
The Board believes TD success is based on a culture of
integrity which starts with the principle “tone at the top“.
Setting the tone is not about doing one specific thing; it involves
acombination of policies, procedures and behavioral leadership
that spreads throughout an organization. For example, an
important first step in building a culture is developing a Code
of Conduct and Ethics that resonates with employees. In
2006, the TD Board played a role in setting the right tone by
overseeing the update of these standards of integrity, honesty
and professionalism.
THE RIGHT BALANCE OF OVERSIGHT
AND STRATEGIC COUNSEL
As your Chairman, I’m more focused than ever on running the
Board in a way that delivers the most strategic value to TD
and our shareholders. In the past few years, all boards have
spent tremendous energy on the compliance and due diligence
functions, sometimes at the expense of time devoted to the
advisory assistance that boards can provide to management.
While the oversight functions are being fully carried out, the
TD Board placed additional emphasis on engaging our directors
in strategic discussions to ensurethat the Bank benefited from
their collective experience.
CHANGES TO THE BOARD
The Board was delighted to welcome Irene Miller as a director
this year. Irene brings a U.S. perspective to the table that I have
no doubt will benefit our organization and our shareholders in
the years ahead. Also on behalf of the Board, I’d like to thank
Mickey Cohen, who retired as a director in 2006, for his out-
standing service to TD. His contributions over the years as Lead
Director,Chair of our Corporate Governance Committee, and a
member of the Management Resources and Risk Committees
were invaluable.
OUR PEOPLE ARE THE DIFFERENCE
On behalf of the Board, I would like to sincerely thank Ed Clark,
his management team and all employees across TD for another
tremendous year. The results TD produced in 2006 don’t happen
without the dedication of an exceptional group of people who
work hardevery day to make us a better financial institution.
John M. Thompson
Chairman of the Board of Directors
6