Board Profile - Canada Deposit Insurance Corporation
- CDIC Act and Financial Administration Act
CDIC was established in 1967 under the Canada Deposit Insurance Corporation Act ("CDIC Act"). The CDIC Act sets out CDIC’s objects, powers and duties, the general terms of deposit insurance, and other governing parameters. CDIC also functions within the legislative framework established by the Financial Administration Act ("FAA"). Further, the Corporation is an agent of Her Majesty in right of Canada and is a Crown corporation named in Part I of Schedule III of the FAA. As such CDIC is subject to a number of other statutory obligations imposed on federal Crowns.
The Corporation is accountable, through the Minister of Finance, to Parliament for the conduct of its affairs.
- CDIC's Mandate and Business
The Corporation’s mandate is to provide deposit insurance and to contribute to the stability of the financial system of Canada, all in a manner that minimizes the Corporation’s exposure to loss. CDIC’s mission is to attain these statutory objects in a professional and innovative manner, meeting the highest standards of excellence, integrity and achievement.
CDIC’s statutory mandate constitutes the Corporation’s business objectives. CDIC’s Board of Directors annually reviews and develops business strategies to achieve these objectives, which are set out in the Corporation’s five-year Corporate Plan, which is approved by the Governor in Council.
The Board’s major responsibilities and work, pursuant to its statutory mandate, include inter alia: decisions on strategic direction, including: (a) interventions; and, (b) balancing CDIC’s mandates of loss minimization and of undertaking the non-least cost interventions in systemic cases where failure to do so would seriously undermine the public’s confidence in the stability of the Canadian financial system, on the disposition of real estate and other assets, on the recovery of claims and on the payment of insurance claims. The Board also monitors the compliance of members with legal and supervisory requirements. In addition, it oversees the general management of the Corporation’s affairs and recommends CDIC’s premium rates, corporate plan and budget for approval by the government.
Roles and Responsibilities and Membership: Statutory Requirements
- Board of Directors Roles and Responsibilities
Pursuant to the provisions of the FAA, the Directors of the Board have the obligation to act in the best interests of the Corporation and to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
The Board of Directors has approved a Board Charter that reflects these legislative obligations and records the Board’s understanding of its governance responsibilities, including the various means it will undertake to ensure these responsibilities are fulfilled.
- Membership: Statutory Requirements
The Board consists of:
- the Chairperson, appointed by the Governor in Council during good behaviour for a five-year term;
- five ex officio directors: the Governor of the Bank of Canada, the Deputy Minister of Finance, the Superintendent of Financial Institutions, the Commissioner of the Financial Consumer Agency of Canada (each of whom may appoint an alternate to attend in his/her absence any meeting of the Board), and a Deputy Superintendent of Financial Institutions, or an officer of the Office of the Superintendent of Financial Institutions, appointed by the Minister; and
- five private sector directors who are also appointed by the Governor in Council during pleasure for a term not exceeding four years. The five private sector directors are recommended to the Governor in Council by the Minister of Finance.
No private sector director is eligible to be appointed if he/she:
- is employed in the public service;
- holds an office or position for which any salary or remuneration is payable out of public monies;
- is a member of the Senate or House of Commons or a provincial legislature; or
- is a director, officer or employee of a CDIC member institution.
Further, the private sector directors are subject to strict rules governing conflicts of interest and must report on their conflicts annually to the Chairperson. (See CDIC’s Code of Business Conduct and Ethical Behaviour for Directors, Conflicts of Interest Code and the Conflict of Interest Act and related government guidelines.)
Suggested Criteria and Skill Sets for Private Board Members
The private sector Directors hold office for a period of up to four years, at the pleasure of the Governor in Council. Their role includes bringing to the Board business judgment coupled with varied expertise and experience relevant to the mandate and activities of CDIC.
The suggested criteria and skills set for the private sector Board members are based upon the following considerations:
- CDIC’s statutory mandate and powers;
- the responsibilities of its Board of Directors;
- the nature and complexity of the matters that come before the Board for analysis, judgment and decision at any time during the country’s various economic cycles; and
- the Board’s ability to provide strategic direction and advice concerning the Corporation and the Corporation’s performance of its mandate.
The suggested criteria and skills set for private sector Board members are as follows:
- Relevant business experience including financial literacy and demonstrated business judgment, particularly in the financial sector.
- A range of skills that complement other skills available on the Board.
- A capacity to prepare for, attend and actively participate in Board and Committee meetings in Ottawa and elsewhere.
- Core Attributes, Competencies and Experience
- Independence – not currently on the board of directors or an advisory committee of, nor an officer or employee of, a bank, trust company, life insurance company, credit union or a business substantially similar to the business of any of the foregoing companies, or any of their respective affiliates or associations, and free from any interest and any business, professional or other relationship with any of the foregoing or with CDIC which could, or could reasonably be perceived to, materially interfere with the person's ability to act independently with a view to the best interests of CDIC.
- Personal qualities of integrity and high ethical standards. In this regard, Board members are expected to adhere to CDIC’s Code of Business Conduct and Ethical Behaviour for Directors, CDIC’s Conflicts of Interest Code, as well as applicable provisions of the Conflict of Interest Act and related government guidelines.
- Wise, thoughtful counsel
- The ability to provide wise, thoughtful counsel, to analyze, ask relevant questions at the strategic level, consider the different stakeholders’ perspectives, and understand situations and problems by addressing underlying issues, as demonstrated in their business or professional experience.
- Specific Skills, Knowledge and Experience
The Board's collective skills and experiences should include individuals knowledgeable in accounting or financial management, individuals with experience in those parts of the legal and accounting professions concerned with auditing, commercial law, corporate finance, receiverships, bankruptcies and insolvencies, company restructurings, mergers and acquisitions and individuals with experience in risk management, consumer issues related to financial institutions, corporate governance, and communication.
Private board members should reflect a linguistic diversity, representing the two official languages. Consideration should also be given to the perspectives and experience that candidates diverse in gender, ethnic background and regional residence can bring to the Board. The Board has tended to have private sector directors appointed from Atlantic Canada, Quebec, Ontario, and Western Canada.
- Working Conditions
The Board generally meets about four to six times per year. Each private sector director normally serves on two Committees of the Board, each of which usually meets at least twice a year, mostly in conjunction with Board meetings.
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