The document discusses governance at BDC, a Canadian Crown corporation. It outlines that governance refers to the structures and systems for overseeing an organization's direction and management. It then summarizes how governance has changed in Canada over the last 15 years, with a greater focus now on board independence and oversight of strategies. The rest of the document details BDC's approach to balancing autonomy and accountability, and the roles and responsibilities of Parliament, the board of directors, and management in ensuring proper governance.

1. Governance at BDC
Michel Bergeron, Vice-President - Corporate Relations
ADFIAP - October 2009

2. Governance at BDC
What is Corporate Governance?
It refers to:
What are the structures, systems and practices for
overseeing the direction and management of an
organization, so that it carries out its mandate and
objectives effectively.
Governance at BDC

3. Governance changes in Canada in last
15 years
Few Governance Committees
Executive Committees were the norm
CEO – had most of the power
No performance evaluation of the Board
Role of the Board was decorative
No independence
Focus of the Board now more on high level strategies
Governance at BDC

4. Governance at BDC (cont’d)
Canada’s approach to governance in Crown
corporations:
Arm’s length = Autonomy
Counterbalanced by Accountability and Transparency
Need to have clearly defined roles and structures through
a well defined legal framework
Governance at BDC

5. Governance at BDC (cont’d)
A fine balance between:
Autonomy:
Non-partisan, non political provider of service
In charge of its operations
Able to resist inappropriate pressure
Has a Board of Directors comprised of independent directors
Clearly defined mandate – Sustainable financially
Accountability:
Parliament
Board
Minister
Management
Governance at BDC

6. Governance at BDC (cont’d)
Parliament
of Canada
BDC Act Financial Access to
Administration Act Information
Minister of
Industry
BDC Board of
Directors
BDC
Management
Governance at BDC

7. Governance at BDC (cont’d)
Parliament’s Oversight:
Annual Report (every year):
-Public (AG)
Annual Audit – 2 Auditors
-Private
Corporate Plan (every year)
Special Exam (every 5 years)
Legislative Review (every 10 years)
Access to Information Act (ongoing) Governance at BDC

8. Governance at BDC (cont’d)
What is the Board’s role
Is a steward to BDC
Ensures that BDC’s activities are aligned with its public
policy mandate
Is responsible for:
Approving BDC’s strategic direction and corporate plan, and
monitoring progress
Ensuring BDC is identifying and managing its risks
Establishing compensation policies, and reviewing and
approving management’s succession plan
Reviewing BDC’s internal controls and management information
systems
Governance at BDC

9. Governance at BDC (cont’d)
What is the Board’s role
Is responsible for:
Overseeing communication and public disclosure
Setting performance targets and monitoring progress
Overseeing BDC’s pension plan, and establishing its fund
policies and practices
Ensuring the highest standards of corporate governance
Governance at BDC

10. Governance at BDC (cont’d)
How does good governance happen?
The Chairperson plays a leading role in leading in
Governance by fostering certain behaviours:
Integrity
Independence of Mind (for both directors and
management)
The right tone at the top (from the Chairperson and the
CEO)
Promoting transparency and discussion
Governance at BDC

11. Governance at BDC (cont’d)
The Chairperson ensures that:
The Board adopts a clear description of its role
The right committees are created and they have clear
responsibilities (Terms of Reference). BDC’s Board has five
committees:
Human Resources
Audit
Credit/Investment & Risk
Governance/Nominating
Pension Funds Investment
Formal interface with Shareholder – Through the Minister
Governance at BDC

12. Governance at BDC (cont’d)
The Chairperson ensures that:
The Board, the Committees and the Directors evaluate their
performance yearly
The Directors receive proper orientation and continuing education
Governance at BDC

13. Governance at BDC (cont’d)
Other areas where the Chairperson will impact
Governance:
Effective recruitment of Directors with the right skills and
competencies for the Board
Effective contribution stems from knowledgeable and well
informed oversight
Governance at BDC

14. Composition of the board
Senior people with expertise in:
credit (at a large financial institution)
risk management
venture capital
investments (general)
chief executive officer of a large enterprise
ownership or leadership of an SME
financial literacy and expertise
Governance at BDC

15. Governance at BDC (cont’d)
Also means, the Board focuses on Corporate Strategies:
Participates actively in the development and approval of the
Corporate Plan:
Meets yearly in the fall, followed by many discussions and
approval of the Corporate Plan in January
Reviews and approves strategic programs and policies including
HR compensation policies, succession planning, performance
evaluation of the CEO
Recommends candidates with the right set of skills and
competencies for the Chairperson and CEO positions for
appointment by Government
Governance at BDC

16. Governance at BDC (cont’d)
Workplace environment Conductive to Good
Governance
Core Values Employee Code of
Ethics Conduct, Ethics and
Client connection Values
Team spirit Board Code of Conduct
Accountability Clear Policy on disclosure
Work-life balance of wrongdoing: referred
to Audit Committee
Referral Policy
Governance at BDC

17. The board
Average year: 6 to 10 meetings
Fiscal 2009: 15 meetings.
For a summary of our important decisions, please see the
annual report
Governance at BDC

18. 1-888-INFO-BDC www.bdc.ca
Business Development Bank of Canada Head Office 5 Place Ville Marie, Suite 300, Montréal, Quebec H3B 5E7