(May 4 – 11:40 ET) – The CPP Investment Board is committed to best governance practices, publishing them, and publicly measuring its behavior against them, a pension fund industry conference was told today.
It has introduced a formal annual process evaluating the effectiveness of its board of directors and the performance of its management. And it will publish its codes of conduct, conflict of interest guidelines, and governance policies on its Web site later this year.
John A. MacNaughton, CPP Investment Board President and Chief Executive, told the spring conference of the Pension Investment Association of Canada that “this commitment goes beyond the requirements of the law and the expectations of governance authorities. We intend to be a forthright public advocate of good governance because we accept the premise and the evidence that good governance policies and practices are a component in superior portfolio performance.”
MacNaughton cited several distinctive features of the CPP Investment Board’s governance. Directors with accounting, actuarial, investment, business or legal expertise, for example, are subject to higher standards of care in areas that relate to their expertise. To ensure the highest standards, the directors test the governance practices against guidelines for public companies and pension funds.
Recently, the CPP Investment Board developed tough guidelines for officers on the disclosure of material inside information, insider trading, and personal trading. Officers must provide an annual statement of their securities holdings to the external auditor, and a monthly personal trading report.
“You can appreciate how important these rules are when you realize that over the next 10 years, the CPP Investment Board’s invested assets will grow from about $3 billion today to more than $100 billion based on a full arsenal of investment strategies,” Mr. MacNaughton said. “We intend to be more than just careful.”
-IE Staff