How We Govern

Corporate governance refers to the way in which a company is governed, its processes and policies, and how it deals with the various interests of its many stakeholders, including shareholders, customers, employees and the broader community.

The importance of an effective corporate governance structure and culture was reinforced over the past few years, as companies dealt with the fallout of global economic turbulence.

A solid foundation of openness, integrity and accountability has helped Scotiabank in this economic climate by building and maintaining strong, enduring relationships with customers and other stakeholders in the communities in which the Bank operates. The Bank has also benefited from a strong history of internal audit and compliance procedures and a comprehensive, well-articulated risk appetite framework.

As a global financial institution with operations in more than 50 countries, Scotiabank strives to ensure that its practices and policies meet or exceed all local, Canadian and international standards and requirements, and that the interests of the Bank's diverse stakeholders around the world are represented in a balanced way.

Who governs?

The Bank's corporate governance policies are designed to ensure the independence of the Board of Directors and its ability to supervise management's operation of the Bank. The Board of Directors is committed to adopting best practices for the Bank's corporate governance.

Accountability for the Bank's actions and results is shared by all employees, and ultimately rests with the Board of Directors, which is elected to represent shareholders' interests. All directors, officers and employees of Scotiabank must annually acknowledge their adherence to the Code of Conduct.

The Bank is always looking for ways to strengthen its corporate governance policies and procedures. The Corporate Governance Committee of the Board, which is composed entirely of independent directors, reviews Scotiabank's corporate governance policies at least once a year. Any changes it recommends are reviewed and approved by the full Board.

Scotiabank's Board of Directors is made up of local, regional, national and international business and community leaders, who have been carefully selected for their financial literacy, integrity and demonstrated sound and independent business judgment. Their broad individual and collective experience is an invaluable asset. Currently, 15 of the 17 directors of the Board are independent, including our non-executive chairman.

For more information on our Board of Directors, their committees and activities, as well as guidelines for submitting a shareholder proposal, please consult the Bank's Management Proxy Circular.

Board best practices

  • Scotiabank's Board of Directors is led by a non-executive chairman.
  • 15 of the Bank's current 17 directors are independent, including the chairman.
  • The Bank developed a formal Corporate Governance Policy in 2002, which has been enhanced and re-approved each year since. It is reviewed at least annually.
  • Shareholders vote for individual directors. Directors receiving more votes "withheld" than "for" in an uncontested election are required to tender their resignation.
  • All four of the Board's committees meet independence guidelines in terms of composition.
  • Board committees have the authority to retain independent advisors, as determined necessary by each committee.
  • The Board conducts an annual review of its performance and that of its committees.
  • At each meeting of the Board and Board committees, time is specifically reserved for independent discussion without management present.
  • Risk Committee and Human Resources Committee each meets separately with the Bank's Chief Risk Officer.
  • An orientation program is in place for all new directors. They also receive a Corporate Governance Information book, which explains the Bank's corporate governance structure. All directors participate in the Board's ongoing education sessions throughout the year.
  • All directors, officers and employees of Scotiabank must acknowledge their adherence annually to the Scotiabank Code of Conduct. The Bank has also adopted a Whistleblower Policy and Procedures (176 kb).
  • Directors are expected to hold Bank common shares and/or Director Deferred Share Units (DDSUs) with a value not less than $600,000. Directors will have five years from May 1, 2015 or the date of their appointment, as applicable, to reach this level.
  • Directors are required to take at least $120,000 of their annual board retainer in common shares or DDSUs, even after they meet the share ownership guideline.
  • Directors are also expected to hold at least 1,000 Bank common shares within six months of joining the Board (unless there are unique or exceptional circumstances).
  • We have held an advisory vote on our approach to executive compensation, commonly known as ‘Say on Pay’ every year since 2010 to give shareholders the opportunity to provide the Board with important feedback. In 2016, 94.1% voted for our approach to executive compensation, and shareholder support has been 92.6% or higher each year.