The Board of Directors must ensure that the Bank is managed competently.
The Board is responsible for reviewing the Bank's general policies on matters other than monetary policy and for approving the Bank's corporate objectives, plans and annual budget.
The Board of Directors includes the Governor, the Senior Deputy Governor, twelve outside directors and the Deputy Minister of Finance (who has no vote).
Monetary policy is neither formulated nor implemented by the outside directors. In this area, the directors' job is to keep the Bank informed about prevailing economic conditions in their respective regions.
The directors are also responsible for appointing the Governor and Senior Deputy Governor.
The Minister of Finance appoints directors to fill vacant seats on the Board for a three-year term, subject to the approval of the Governor in Council (the Cabinet).
Each director is paid:
Each director who is also member of the Executive Committee is in addition paid an annual retainer of $2,600-$3,500.
In addition, each director is paid a per diem of $565-$665 for each day he or she is, at the request of the Bank, engaged in special work for the Bank outside services ordinarily required of a director.
The Governor of the Bank of Canada performs the same role as the president of a corporation. He or she is the Bank's chief executive officer, and, as such, has control and full authority over the business of the Bank. The Governor also presides over the Board of Directors.
The Governor, like the Senior Deputy Governor, is appointed by the outside directors with the approval of the Governor in Council (the Cabinet) for a term of seven years.
The Governor of a country's central bank must have a thorough understanding of financial markets and the economy and possess wide experience in international finance.
There are eligibility requirements laid down in the Bank of Canada Act, which stipulate that the Governor must:
The Governor is appointed for a term of seven years, and cannot be relieved of his or her duties at the whim of the government.
If a profound disagreement were to occur, the Minister of Finance, with the Cabinet's authorization, could issue a written directive to the Governor specifying a change in policy. This would most likely result in the resignation of the Governor. In the absence of a directive, the Governor has the entire responsibility for monetary policy.
Giving the Governor a seven-year mandate allows him or her to adopt the medium and long-term perspective essential to conducting effective monetary policy. This decision was made in 1934 when the Bank of Canada Act was passed.
The salary range for the Governor is $336,600 to $396,000; for the Senior Deputy Governor, it is $235,600 to $277,200. The directors set the salaries of the Governor and the Senior Deputy Governor within preset ranges, subject to the approval of the Governor in Council (the Cabinet).
The salary ranges are set by a Public Service advisory group, including members of the private sector, that recommends the pay range for senior officials and officers of Crown corporations. They take into account the qualifications required for that position and compare it with similar positions in the private sector, among other things.