What’s required to create effective boards?
Ontario Teachers' identifies corporate governance focus areas for 2018.
Ontario Teachers' has long held the belief that good governance is good business. A system of good governance can be built or strengthened when attention is paid to our "4 Pillars of Board Effectiveness":
People: Effective boards are made up of diverse individuals having the relevant experience and skills necessary to challenge management and execute their oversight duties.
Structure: Effective boards have strong independent leadership and are of an appropriate size to manage their workloads with appropriate depth and breadth of oversight. Where board size permits, the delegation of work to committees is encouraged as an efficient use of resources.
Practices: Effective boards establish robust assessment and recruitment practices and provide honest and constructive oversight of management.
Culture: Effective boards have a strong culture rooted in fostering respectful relationships among the board and encouraging candour in discussions and independence of thought. Furthermore, a strong culture is also evidenced by the relationships a board cultivates with its stakeholders.
Effective boards also recognize that these four pillars are interdependent; that people, structure, practices and culture must work together for there to be effective corporate governance.
Each year Ontario Teachers' identifies focus areas where we will be directing our attention for the upcoming year. We believe they are important and necessary factors to creating good governance. For 2018, we have prioritized executive compensation, board composition and board/stakeholder communication as our areas of focus.
Where appropriate we will reach out to individual boards to discuss these issues – to learn what works well and to share our experiences and knowledge with those who may struggle. A more detailed list of expectations with respect to each of the three areas of focus is outlined in the diagram below.
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For more information, contact
Head of Corporate Governance