In early 2008, Alberta Finance will move its investment management operations—approximately $70 billion in assets, including a number of public sector pension plans—to a newly formed provincial corporation. The former head of TD Bank discusses his role as the first chair of Alberta Investment Management Corp.(AIMCo).

Tell me more about the new corporation. What was the reasoning behind it?

CB: The people in the department of finance felt they only gave Alberta Investment Management attention when it had problems. They felt that if they put it in a separate corporation with a board of directors that was focused exclusively on AIMCo and its interests, that it would get more attention and support.

Where will the members of the board of directors be drawn from?

CB: The [Alberta] government had a strategic advisory committee to pick out potential directors. They want it to be an independent board, and they’ve looked right across the country at a board of directors that could best contribute to it. I’d like to see the preponderance of the board from Alberta. But we will draw on expertise from across the country.

What do the changes mean for the members of the pension plans whose assets AIMCo will manage?

CB: Alberta wouldn’t be making the move if it didn’t think that we could improve the returns over the benchmark. One of the things I told the people at Alberta Investment Management was that they had done so well that they were going to make it more difficult to help them exceed the benchmark by more than they already had.

How do you plan to facilitate the transition to the new corporation?

CB: The biggest challenge will be hiring the chief executive officer [CEO]. And if we the board do a good job on that, life’s going to be much better than if we don’t.

What will the board of directors be looking for in a CEO?

CB: What we want is a seasoned executive from the investment industry. It could be from the insurance industry, it could be from the banking industry, but most likely from money management.

When will the new CEO be appointed?

CB: As soon as we have all the board members, we’ll start the search for the CEO. And it’s difficult to know how long that will take. We might be fortunate and find the ideal person pretty quickly. But realistically, it’s a three- to six-month effort.

What lessons can AIMCo learn from other large public sector funds?

CB: The Ontario Teachers’ Pension Plan [Teachers’] has done a marvellous job relating compensation to success with a measurement of risk in it. [For example], say one manager got a 10% return and another manager achieved a 10% return. The one who took less risk would be rewarded more than the other one, even though the results were the same. Teachers’ has also become a big force in private equity. We’d like to see—to the extent that the returns are good—AIMCo be a bigger force in that.

What do you see as your key role as chair of the board?

CB: On an ongoing basis, I really feel that a chair’s role is to build a level of rapport and trust among the board members, so we’re in a position to have candid conversations and really debate things openly and with a lot of candour. If a board chair can do that and make people feel like they’re part of a collaborative process, then I think the chair is making a real contribution.

How do you feel as someone from Ontario stepping in as chair of a large Alberta institution?

CB: I said to Alberta Investment Management that I’d be interested in the role, but I was concerned that the people of Alberta might feel there should be an Albertan there. And they said they really wanted to get the best person available, so they weren’t looking at geography. But I said, “If that’s the case, I really think we should be looking for a firm majority of the members from Alberta.” And they appointed a vice-chair, George Gosbee, who is from Alberta.

Don Bisch is editor of Benefits Canada.

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© Copyright 2007 Rogers Publishing Ltd. This article first appeared in the October 2007 edition of BENEFITS CANADA magazine.