Jim Leech, president and CEO of the Ontario Teachers’ Pension Plan (Teachers’), talked to Benefits Canada about Teachers’ investment principles and why they make the grade.
What differentiates Teachers’ from other plans?
It really starts right at the top, with governance. The place is run like a business. It’s independent of its sponsors, it has professional board members, and it’s focused on only two things: investment returns and service to members. We could not do what we’re doing if we didn’t have the governance structure that we have now. I see, time and time again, organizations try to do it, and they run right into that.
We have Investments and Member Services under a single roof. If people ask me what the core differentiator here is, [it’s that] we have one customer and we know who they are. They’re very visible to us, and we’re very visible to them.
Most people who work here have a teacher in their family. There is a concept of service: ‘I’m proud to be working for the teachers of Ontario.’ That identification with the customer is so strong.
The Maple Group (in which Teachers’ is a partner) has announced a $3.7-billion bid for TMX Group Inc. What’s behind this move?
What’s behind it, from Teachers’ perspective, is, this looks like a very good investment. We’re not participating in Maple for any patriotic reasons.
What’s Teachers’ view on responsible investing?
To us, it is purely a risk tool. We are a leader in governance, and I think we were one of the first to recognize that was important when studying a company: to understand the risk of the governance. For example, that’s why we didn’t own shares in Magna [International Inc.]—because it wouldn’t pass a governance test. Notwithstanding the fact that Magna was, and is, a great company, we just thought the risk was too high.…And that’s what we emphasize to people: it isn’t done for the greater good of mankind; it’s to understand risk.
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