Board Profile - Business Development Bank of Canada

Business Development Bank of Canada

BDC’s Mandate

BDC is “Canada’s development bank” and a financial Crown corporation wholly-owned by the Government of Canada. For more than 60 years, BDC has been the only financial institution solely dedicated to the development of Canadian small and medium-sized enterprises (SMEs). As set out in BDC’s legislation, the purpose of the Bank is to support Canadian entrepreneurship by providing financial and consulting services. It operates profitably and since 1995, has declared and paid $157 million in dividends to the Government of Canada. BDC currently serves approximately 28,000 entrepreneurs. BDC provides its services through four operational units: BDC Financing; BDC Subordinate Financing; BDC Venture Capital and BDC Consulting. BDC’s mandate requires it to play a complementary role in the market.

BDC Financing supports SMEs during all stages of development (from start-up to expansion) and economic cycles. BDC Consulting provides quality, yet affordable consulting services for SMEs that would typically only be accessible to larger firms. BDC Venture Capital brings nascent Canadian technologies out of the laboratory and helps build them into mature, globally-focused, growth-oriented companies. In doing all of the above, BDC works with like-minded partners to enhance the support available to Canadian SMEs. BDC’s complementary role evolves with the needs of Canadian SMEs, market conditions, and other financial institutions’ strategies, thereby requiring constant evolution of its services and of its position in the market.

As Canada’s development bank, BDC focuses on the creation, growth and success of Canadian SMEs. It does so by understanding the SME market, listening to its clients, and being proactive in delivering holistic solutions of money, knowledge and advice to SMEs.

BDC’s Challenges, Issues and Initiatives

BDC is dedicated to serving the needs of SMEs. As part of its public policy mandate, BDC must be a complementary lender in the market. BDC also has a commercial mandate and must operate as a commercial entity. To ensure that BDC operates on a commercial basis, it is required to earn a return at least equal to the Government’s average long-term cost of capital. Consequently, BDC must play a balancing act between its commercial and public policy mandates and arguably this is and will continue to be one of its greatest challenges going forward.

BDC provides Canadian entrepreneurs with timely and customized financial and consulting services in segments of the market that are underserved, encompassing:
  • All regions;
  • Developing markets such as aboriginal and women entrepreneurs, young entrepreneurs and entrepreneurs over age 55;
  • Start-ups and smaller loans;
  • Higher risk enterprises with intangible assets;
  • Exporters and their specialized needs;
  • Companies wishing to get involved in the global value chains;
  • Venture capital to bring research and technological innovations to the marketplace.

BDC’s Board of Directors - Roles and Responsibilities

The Board of Directors is responsible for providing direction and guidance to senior management respecting the business, the activities and other affairs of BDC. As steward of the corporation, the Board:

  • Approves BDC’s strategic direction and corporate plan;
  • Ensures the integrity of the financial statements, projections, and audit results;
  • Monitors progress and ensures BDC is identifying and managing its major risks;
  • Establishes compensation policies;
  • Approves the senior executives’ compensation;
  • Reviews and approves management’s succession plan;
  • Reviews BDC’s internal controls and management information systems;
  • Oversees communications and public disclosure;
  • Sets performance targets and monitors progress;
  • Oversees BDC’s pension plans and establishes its fund policies and practices;
  • Ensures the highest standards of corporate governance.

The Board of Directors is responsible for overseeing BDC by holding management accountable for performance, long-term viability and achievement of its objectives.

BDC’s Board of Directors has established a committee structure to help the Board perform its duties.

Board of Directors - Core Attributes and Competencies

To operate effectively the Board of Directors requires members who, individually and collectively, possess core attributes and competencies. These include:

Financial Literacy

The ability to read and assess financial statements.

Informed Judgement

The ability to provide wise, thoughtful counsel, to analyze, ask relevant questions at the strategic level, consider the different stakeholders’ perspectives, understand situations and problems by addressing underlying issues.

Integrity and Accountability

Demonstrating high ethical standards and integrity, being willing to act on and remain accountable for Board decisions, meeting the accountabilities outlined in the law, by-laws and rules of the Board, seeing oneself as serving the interests of Canadians.

Impact and Influence

The awareness of the impact of organizational issues, policies and decisions on public interest and concern. The capacity to be sensitive to the differing needs and agendas of multiple stakeholders and to act to convince or influence others in order to have a specific impact or effect.

Trust and commitment

Respect and openness for the views of others, encouraging open discussions, and commitment to excellence and in BDC’s role in building Canadian prosperity.

Specific Skills, Knowledge and Experience

In addition to the core attributes and competencies discussed above, BDC as a large and sophisticated financial institution requires Board members who individually and collectively, bring specific skills , knowledge and experience. These include:

Senior position in credit in a large financial institution

Extensive experience in one of the major Canadian financial institutions at a senior level in management of the Credit Risk for commercial loans including term loans, (identifying and analyzing credit risks, authorizing transactions, setting broad principles, policies, guidelines and standards for lending).

Senior position in risk management

Extensive experience in a broad cross functional role in Risk Management in a major Canadian financial institution or a specialized management company at a senior level, determining, mitigating and managing risks, pertaining to the Corporations’/Clients activities, determining principles, standards and guidelines for managing risks.

Senior position in a venture capital firm

Extensive experience at a senior level in one of the major Venture Capital firms with sector focus such as Telecom, Life Sciences, Information Technology, and environment, as a professional involved in determining the strategy, policies, broad principles for the Venture Capital activities. Identifying investment opportunities, analyzing and making decisions on investment transactions.

Senior position in investments generally

Extensive experience at a senior level in a major Fund or Private Equity firms as a professional involved in determining the strategy, policies, broad principles for the Investment activities, as well as approving transactions.

Large enterprise CEO

CEO – having had the experience of being responsible for the management of a large sophisticated commercial corporation whether public or privately held in Canada and being versed in best practices in governance. Ideally, having had substantive Board experience.

SME ownership/leadership

Being the owner of, or holding the senior position in a SME. The SME should have at least 100 employees, shown a pattern of successful growth, nationally or ideally internationally. These individuals should be capable of thinking broadly on SME issues.

Financial Expertise

CA or CGA professional designation, considered financial expert as per the OSC definition, having had experience in the audit of large complex corporations, ideally of a financial institution.

Knowledge of international tradel

Having been involved in a large business that trades internationally, ideally with Europe, China and India. Having developed knowledge of the local requirements.

Knowledge of Human Resources

Having had extensive experience at a senior level in managing the Human Resources function of a large corporation. Determining H.R. strategies in order to reach corporate objectives, hiring, training and retaining appropriate resources, setting principles and policies for compensation.

Senior Practitioner in a large management consulting firm

Partner level in a large national or international consulting firm with experience at a strategic level with clients.

Knowledge of Corporate and Securities Law

Knowledge of public policy and government

Having extensive experience of the processes for formulating and implementing public policy objectives and of organizational structure of government (whether federal or provincial), its rules, guidelines and practices.

Board Experience

Previous Board experience preferably in a for-profit organization, and at the minimum in a not-for-profit organization.


In addition to representation in terms of commercial sector and experience (as outlined in the preceding sections), the membership of BDC’s Board should represent the geographical regions of Canada and maintain gender and cultural representation, as should efforts should be taken to ensure that the Board represents the diversity of Canada’s population and its business communities. As stipulated in the Business Development Bank of Canada Act, all directors must be Canadian citizens or permanent residents ordinarily resident in Canada.

Working Conditions

Appointment to BDC’s Board of Directors involves a significant commitment of time, as well as a sharing of expertise to further BDC’s objectives and work towards fulfillment of its mandate. The work of the Board is divided into five committees*: Audit, Credit Investment and Risk, Governance and Nominating, Human Resources and Pension Funds Investment Committee. All committees are independent of management, with the exception of the Credit/Investment and Risk Committee which authorizes large transactions within certain limits and where the President and CEO is a member. In fiscal 2008, new members of the Board, following the enhanced orientation and continuous training policy, attended detailed briefings on many of BDC's specialized activities.

There are 7 to 8 meetings of the Board held each year; three of these meetings are held in Montreal, three in other cities across Canada and two meetings by way of a conference call. One Board meeting is held for strategic planning purposes.

Most Board members serve on two committees. Committees generally meet the day before Board meetings; the Credit Risk and Investment Committee meetings are more frequent and are held most weeks by a conference call. Each set of regular Board and committee meetings requires a minimum commitment of 2-3 days including preparation and travel time. Directors are expected to attend all Board meetings and meetings of Committees of which they are members, although participation by telephone is sometimes possible.

Directors’ remuneration is set by Order in Council supplemented by government guidelines. The Chairperson of the Board is paid an annual fee of $12,400 and a per diem of $485, while other directors are paid an annual fee of $6,200 and a per diem of $485. Directors receive additional annual fees of $1,500 when they hold office as chairperson of a committee. BDC’s President and CEO does not receive additional remuneration for acting as a director.

Membership on BDC’s Board also involves commitment to legal and ethical conduct, including adherence to a Board Code of Conduct that incorporates the same basic principles as the Employee Code of Conduct, Ethics and Values. Every year, directors affirm that they have complied with the code. The segregated roles and responsibilities of the chairman and the president, already documented, reflect current best practices. Directors disclose possible conflicts of interest, if any, through a declaration of conflict of interest.

* For a detailed description of the Committees, please refer to BDC’s website at: