THE VIEW OF THE BOARDROOM

Half (51%) Say Their Canadian Directors are Paid Too Little With 56% Indicating That Canadian Directors Should Receive More Equity Options and Deferred Shares

Toronto, ON- Findings from the Seventh Annual Ipsos-Reid Survey of Canada's Most Respected Corporations indicates that half (50%) of CEOs believe their board has too few women, particularly in the financial services (68%), manufacturing (59%) and telecom/information/technology (55%) sectors - however, 44 percent do not believe this to be the case - particularly in the pharmaceutical sector (38%).

On another matter of board composition, only 30 percent believe that their board has "too few members with diverse cultural backgrounds" - with two-thirds of CEOs (66%) believing that their board does not have an issue in this regard. Similarly, two-thirds (66%) do not believe that their board has too few directors who are "physically challenged", however, one-in-five (21%) believe otherwise.

Turning to compensation matters, half (51%) of CEOs believe that their Canadian directors are paid too little (particularly in financial services 55%), with 42 percent believing otherwise. As another form of compensation, 56 percent believe that their Canadian directors should receive more equity, options and deferred shares (particularly in the resources (62%) and the services (59%) sectors), compared to 38 percent who oppose such a move.

In almost the same split, 55 percent of CEOs do not believe that equity compensation for directors has the potential to create conflicts of interest. However, 41% believe it has the potential, especially within the services (54%), manufacturing (46%) and pharmaceutical/medical (44%) sectors.

CEOs are also split as to whether or not their board should require directors to own a significant number of shares in the firm - with 51 percent agreeing that this should be the case and 47 percent who disagree. The three sectors most likely to believe that directors should own a significant number of shares in the firm are financial services (73%) followed by telecom/information/technology (65%) and resources (55%).

But where they are not as split is on the issue of whether foreign directors on Canadian boards should receive compensation equivalent to what is paid to directors in the country where they reside. In this regard, two-thirds (65%) of CEOs disagree with this view while only 27 percent agree with this proposition.

If there is anything that CEOs agree about to a significant majority, it is the fact that their boards' directors act with absolute independence. Almost three-quarters (72%) believe that their directors act with absolute independence compared with 24 percent who do not believe this to be the case. In fact, only 8 percent of the entire CEO sample strongly believe that their board of directors do not act with absolute independence. Those sectors most likely to believe their CEOs act independently are in resources (83%), financial services (79%) and telecom/information/technology (76%). Those sectors which are most likely to disagree with this view come from pharmaceutical/medical (31%), manufacturing (30%) and services (30%).

Even though they believe that their boards act with absolute independence, they are slightly less enthusiastic that the roles of the CEOs and board chairs on their boards should be separate. While two-thirds (65%) advocate a separation from board and management in the chair, almost a third (29%) disagree that the chair should be separate. The two sectors which are most likely to agree on the split chair are financial services (84%) and pharmaceutical/medical (80%) whereas the two sectors least likely to support this view are from the resources (34%) and services (34%) sectors.

At the end of the day, do CEOs believe that their board has too many meetings? In a word, No -- 83 percent disagree that their board has too many meetings with only 14 percent believe otherwise.

These are the findings from the Seventh Annual Ipsos-Reid Survey of Canada's Most Respected Corporations sponsored this year by Executive Search firm Ray & Berndtson. The survey was conducted between April 24th and July 27th, 2001. The survey involved a randomly selected sample of 300 of the leading CEOs in Canada. With a sample of this size, the results are considered accurate to within 177 4.7 percentage points, 19 times out of 20. The margin of error will vary within regions and for other sub-groupings of the survey population. This survey was to be originally released during the second half of September 2001 but was delayed due to world events.

Ray & Berndtson is Canada's largest national executive search firm with five offices coast-to-coast, each a leader in its marketplace and the only global firm operating in our nation's capital. Ray & Berndtson specializes in recruiting executives throughout the world for its Canadian clients. The firm has over 30 partners, each with extensive experience in conducting senior level search assignments in a broad range of industry sectors. Globally, Ray & Berndtson is one of the largest recruiting firms in the world, with 47 offices in major centres of business and government. Canadian offices are located in Vancouver, Toronto, Ottawa, Montreal and Halifax. Please visit www.rayberndtson.com

To view the complete media release and tables please download the PDF file.

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For more information on this news release, please contact:
John Wright
Senior Vice-President
Public Affairs
Ipsos-Reid
(416) 324-2900