Circling Back to the Caisse’s 2009 Annual Report

A senior officer at the Caisse inadvertently brought something to my attention yesterday. When the Caisse released its 2009 results back in February, the annual report wasn’t made available then, and I didn’t provide a full discussion on it.

The Caisse did publish its 2009 Annual Report in mid-April, stating that accountability has greatly improved:

The Caisse de dépôt et placement du Québec released its annual report for fiscal year-end 2009 this morning, after it was tabled in the National Assembly by the Finance Minister.

In addition to the detailed analysis of the financial results published on February 25, the 2009 annual report contains a new section that, among other things, includes all the accountability reports requested by the Quebec government following the May 2009 Parliamentary Commission. Here are the highlights from these reports.

Report on the Caisse’s Contribution to Québec Economic Development

• The Caisse uses three levers to support its action in Québec: investment, partnerships and knowledge sharing.

• The Caisse’s total assets in the private sector in Québec were $18.7 billion at the end of 2009, up $1.4 billion from 2008.

• In 2009, the Caisse launched various initiatives to support Québec businesses, totalling $1.6 billion.

The Caisse Roadmap

• Two-pronged plan to generate the returns expected by our depositors.

• The first part established in collaboration with our clients–is based on five priorities that will build solid foundations for the Caisse.

• The second part first based on our medium-term strategic thinking about the use of our existing comparative advantages and the need to develop new capabilities to meet our clients’ expectations.

Report on Risk Management

• Accelerated implementation of plan to strengthen risk management.

• Integration of risk-return concept in day-to-day operations.

• Strengthening of risk management methodologies, tools and team.

• Reduction in active risk of 13 specialized portfolios.

• Reduction in financing liquidity risk.

Report on Compensation Policy

• Implementation of a more demanding and rigorous compensation program based on long-term portfolio performance (4 years).

• Introduction of a qualitative risk management factor in the performance evaluation of portfolio managers.

Report on Strengthened Governance

• Review of Board composition and committee chairmanships.

• Integration of new directors.

• Review of director roles and responsibilities and mandates of the Board and its committees.

• Establishment of an effective relationship between the Board and management