The C$172.6 billion (US$170.2 billion) Canada Pension Plan Investment Board, Toronto, could appoint non-Canadian residents to the board if a proposal included in the Canadian Department of Finance’s 2013 Economic Action Plan ultimately is approved.
Currently, only Canadian residents can serve on the 12-member board.
“At this stage of its evolution, the CPPIB’s board of directors might benefit from having access to the international talent pool,” according to the action plan, submitted last month to the Canadian Parliament in Ottawa. “The government will therefore consult provinces on permitting a limited number of qualified persons who are not resident in Canada to serve on the board of directors of the CPPIB, and if there is sufficient support, introduce the necessary changes to the Canada Pension Plan Investment Board Act.” Such changes would require parliamentary action.
“CPPIB welcomes the government’s initiative to permit the appointment of non-residents of Canada to the board of directors,” the board said in a statement. “CPPIB’s governance structure plays a central role in enabling its success as a global investment organization. The policy will enhance CPPIB’s global competitiveness, and the additional international insight will only strengthen the board’s ability to provide oversight to CPPIB’s investment strategy and programs.”
Spokesmen for James M. Flaherty, Canadian finance minister, could not be immediately reached for comment or further details.
“It is unusual,” Roger Urwin, global head of investment content at Towers Watson, said in a telephone interview. “I can’t really think of any national pension fund with that configuration.”
Mr. Urwin said such a “progressive” pension fund like the CPPIB recognized it’s worth looking outside the country for trustees. “It adds diversity and experience,” he said.
Kevin Moriarty, principal at Mercer (Canada), said in an e-mail, “This is a matter of prudently using the best available knowledge and skill. Since the CPPIB has extensive foreign holdings, the addition of a qualified non-Canadian board member would seem reasonable and prudent — particularly since the purpose of the CPPIB is to invest the plan assets, not manage the design and funding of the plan.”
