Integrating Goals, Structure, and Decision-Making at Canada Pension Plan Investment Board

Abstract

In April 2006, the Canada Pension Plan Investment Board began implementing an explicit value-added investment strategy. It involved developing a new risk/return accountability framework that was designed to align investment decision-making with the overall strategy and support a rapid build-up of active investment capabilities. This article provides an overview of the key strategic choices made by the Board of Directors and senior management team and describes the supporting organizational design and accountability framework. The article concludes with a description of how the compensation system aligns incentives with the goals of the organization.

Keywords: Compensation System, Organization Design, Pension Fund, Pension Strategy, Reference Portfolio, Rotman