How OPB is run

A strong governance structure stands at the heart of OPB’s success. Our steadfast commitment to industry-leading governance practices ensures full accountability, effective decision making, prudent investment management, fiscal responsibility, legal compliance, and smart risk-taking. In short, it ensures that we are – at all times – protecting and promoting the best interests of the Plan and its beneficiaries.

Underpinning our governance framework is a series of documents that define our organizational structure, responsibilities, and governance practices. Collectively referred to as the Governance Documents, these documents include a Statement of Governance Principles, a General By-law, Statements of Mandate and Authority, and a Code of Conduct.

Our Governance Documents clearly define roles and responsibilities, draw a clear link between responsibility and accountability, set expectations for ethical behaviour, and entrench conflict-of-interest guidelines. They also establish a well-defined system of checks and balances on all power and authority.

Role of the Board

OPB’s Board of Directors holds the ultimate responsibility for the Plan’s stewardship. That said, the Board has delegated responsibility for the day-to-day operations of the Plan – including administration and asset management – to OPB’s management team. It has also chosen to delegate specific responsibilities to five committees of the Board, including a Governance & Risk Committee, Investment Committee, Audit Committee, Pensions Committee, and Human Resources Committee.

The Board retains overall responsibility for supervision of OPB’s business affairs. For example, it:

• approves OPB’s strategic plan, business plan and budget;
• ensures that management has identified and is managing risks;
• conducts performance and compensation reviews for the President & CEO;
• approves the investment asset mix;
• supervises and approves all audit matters;
• ensures that management is maintaining a culture of integrity;
• conducts an annual review of OPB’s Statement of Investment Policies & Procedures;
• approves any recommendations made to the Plan Sponsor regarding Plan amendments; and
• monitors compliance with OPB’s governance documents.

In fulfilling their duties, members of the Board are directly accountable to:

• the Plan’s beneficiaries (i.e., active and retired members);
• the Financial Services Commission of Ontario (the organization that oversees registered pension plans in Ontario); and
• the Government of Ontario (the Plan Sponsor).

Continuous improvement

Recognizing that risk management is a key component of good governance, OPB has implemented an Enterprise Risk Management (ERM) program. This program provides an integrated, organization-wide approach to risk management. Specifically, it prescribes a formal framework for identifying, reporting and monitoring any risk that could adversely affect the Plan. It also helps identify mitigation strategies.

OPB has also embraced the governance-risk-compliance model. In short, this model integrates governance, compliance and risk management functions under one mandate and improves organizational effectiveness.

Good governance is an ongoing process. To stay at the forefront of industry best practices for governance, we must remain committed to continuous improvement. That’s why in 2014, we:

• introduced a full-time Director of Enterprise Risk Management to bring more rigour to our risk management program;
• drafted a new ERM policy. This new policy – which covers strategic, operational and financial risk – documents roles and responsibilities for risk management, as well as interrelationships among responsible parties;
• drafted a series of “risk appetite statements” that specify the acceptable level of risk for specific business priorities (such as investment risk and data security); and
• drafted metrics that allow individuals across the organization to measure risk more objectively using a standard scale.

Governing well today is about building a strong future. And the future is what the PSPP is all about.