I am pleased to report on behalf of Royal Bank of Canada’s Board of Directors. This past year has been a tumultuous one in virtually every sector of the economy, marked with serious concerns about oversight and governance. In this environment, your board remains committed to sound corporate governance and transparent disclosure. We congratulate management and all RBC employees for their accomplishments and extraordinary efforts in meeting the challenges of 2002.

The public scrutiny and debate this past year provided the board with the opportunity to refine our governance standards and the satisfaction of seeing some of our own long-standing practices recognized by regulators and other observers as leading edge. Your board and management know we must remain vigilant in fostering and reinforcing a culture of governance and integrity throughout RBC – starting at the very top.

The foundation of RBC’s corporate governance process includes a majority independent board with an independent chairman and knowledgeable, well-informed directors who give priority to strategic planning. They ensure that standards exist to promote ethical behaviour throughout the organization while constantly striving to improve corporate governance practices.

We place considerable importance on the process of nominating directors. In seeking candidates with the qualities essential to the leadership of a highly competitive and complex global business, the Corporate Governance and Public Policy Committee focuses on the specific needs of RBC and its strategic direction, while recognizing the benefits of diversity and perspective. For example, several directors who have joined us most recently are from the U.S. – reflecting the expansion of our business there.

As well, RBC has long emphasized the importance of the independence of directors and will continue to do so in the future. For example, non-management directors meet as a group after each board meeting and during the board’s strategic planning sessions. This facilitates a candid discussion of corporate strategy in the absence of management. In addition, all board committees are composed exclusively of non-management directors.

Access to information is also critical to your board’s strength and independence. RBC has an orientation program for new directors and undertakes ongoing education programs. RBC also ensures that the board has timely access to information it needs to make decisions, and free and open access to any and all members of management.

These and other strengths are rooted in a commitment to continuous improvement in corporate governance. RBC keeps close watch on changes in the business and regulatory environment and monitors governance initiatives in Canada and elsewhere, assessing its practices against them and adapting as appropriate. This enables the board to anticipate and implement beneficial changes as a matter of best practice, rather than merely as a response to regulatory or other external requirements.

As Chairman and a shareholder, I am pleased with the leadership RBC has shown in all aspects of its operations, financial performance and corporate governance. Along with my fellow directors, I am committed to working closely with management to maintain the highest standards of integrity, discipline and governance, while providing shareholders with superior returns.

Guy Saint-Pierre, O.C.
Chairman of the Board
December 10, 2002

Corporate governance discussion

View the Chief Executive Officer’s message