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2003 Public Accountability Statement Public Accountability Statement 2003 PresMess_p2_3FINAL.qxd 12/18/03 10:09 PM Page 1 Contents 2 President’s Message 4 Governance and Controls 6 Board of Directors 7 Board committees 7 Strengthening our governance 8 Affordable Accessible Banking 12 Branches 14 President’s Choice Financial™ 15 Automated banking machines (ABMs) 15 Special needs 17 Aboriginal banking 28 Support for Small Business 31 Small business in Canada 33 CIBC Small Business 35 Initiatives for 2003 38 Corporate contributions 46 Community and Social Development 48 Corporate contributions 59 Employee initiatives 65 Employer of choice 70 Employment in Canada 71 Taxes in Canada 80 The Environment 83 Corporate environmental policy and management program 86 Credit risk management and lending 88 Supplier relations 90 Facility management 93 Corporate contributions 96 CIBC Ombudsman You can also access our Public Accountability Statement 2003 by visiting our website at www.cibc.com/pas PresMess_p2_3FINAL.qxd 12/18/03 10:09 PM Page 2 CIBC President and Chief Executive Officer John Hunkin President’s Message Building a company that combines strong, consistent performance with accountability to its stakeholders to view the online version go to www.cibc.com/pas Public Accountability Statement 2003 | President’s Message | 3 Understanding what matters. People. Building something of value. Sustainability. These things matter. They matter to our customers, to our employees, to the communities where we do business. And they matter to me. At CIBC1, we are in business to help our customers achieve what matters to them. If we fail to keep this at the centre of our thinking, we will not consistently achieve our objectives. Success for CIBC means not only achieving our financial objectives, but also nurturing a dedicated and enthusiastic workforce. It means actively supporting our communities. And it means building a sustainable, high-performance enterprise that will continue to thrive for many years to come. Financial institutions have a responsibility to adhere to the highest standards of ethics and governance practices. During 2003, we took further initiatives to enhance our reputation as one of Canada’s leading corporations and we continued to strengthen our commitment to governance. CIBC is committed not only to protection of the environment, but also to the broader goals of sustainable development – creating value for today’s generation without compromising future generations. Beginning in 2002, CIBC’s Public Accountability Statement has documented our commitment to social and environmental issues. It was recognized for its public disclosure by the United Nations Environmental Program at its annual Finance Initiatives Conference in Tokyo, Japan. This year, we’re taking the next step of formally setting a strate- gic framework for the integration of financial, social and environmental reporting. Also, management is engaged in a dialogue to create and define a clear mission statement for CIBC, one that carefully communicates our values and what drives them, articulating what a successful CIBC would look like in the eyes of our stakeholders. Our goal is to be recognized as a leader in customer relationships. To support that, we strive to: • Create an environment where employees can excel • Help our customers achieve what matters to them • Make a real difference in our communities At CIBC, making a difference to Canadians defines who we are. We value the relationships we have with our customers, employees, shareholders and the communities where we do business. Looking ahead, there’s a new sense of confidence at CIBC – confidence that we are moving in a new direction to achieve steady, sustainable results for all of our stakeholders. We still have a lot of work to do, but I am extremely pleased with what we have accomplished this year. We are determined to build on these achievements in 2004. J.S. Hunkin John S. Hunkin President and Chief Executive Officer 1 This statement has been published for CIBC and the following affiliates of CIBC in Canada: Amicus Bank; CIBC World Markets Inc.; CIBC Mortgages Inc.; Services Hypothécaires CIBC Inc.; CIBC Life Insurance Company Limited; CIBC Trust Corporation; CIBC Securities Inc.; CIBC Investor Services Inc.; TAL Global Asset Management Inc.; TAL Private Management Ltd.; CIBC Financial Planning Inc.; CIBC Asset Management Inc. Govern_p4_7FINAL.qxd 12/18/03 10:15 PM Page 4 6 Board of Directors Leadership in governance and integrity, independence and effectiveness are defining features of CIBC’s Board of Directors. 7 Board committees Board committees play a vital role in helping the Board CIBC Chairman William Etherington fulfill its mandate and gover- nance responsibilities to Governance CIBC’s stakeholders. 7 Strengthening and Controls our governance The Board of Directors works with management to further establish CIBC as a trusted organization valued by the public. to view the online version go to www.cibc.com/pas and Controls Public Accountability Statement 2003 | Governance and Controls | 5 Governance Good governance requires more than detailed rules and sound procedures. It is a matter of trust. Leadership in governance is a key objective of CIBC’s Board of Directors and management. We believe that strong governance is the cornerstone of public accountability, vital to establishing and maintaining the public’s faith in institutions. At CIBC, we are dedicated to promoting a culture of governance that is defined by the highest standards of integrity and social responsibility, enabling us to be recognized as a corporation worthy of public trust. 6 | Governance and Controls | Public Accountability Statement 2003 Governance and Controls In Canada, banks hold a unique position of trust and accountability. This responsibility translates into important challenges for running our businesses effectively and creating long-term, sustainable value for our stakeholders. CIBC is pleased to have been recognized as a leader in corporate governance and responsibility. In 2003, the bank was selected as a Triple Crown winner, having been listed on the Dow Jones Sustainability World Index (DJSI World), the FTSE4Good Index and the Corporate Knights Best 50 Corporate Citizens for 2002. CIBC also tied for fourth place in The Globe and Mail’s Report on Business corporate governance rankings, and was awarded an “AAA” Board Shareholder Confidence Index rating from the University of Toronto’s Rotman School of Management. CIBC embraces public accountability and continually strives to demonstrate our commitment to strengthened financial controls and governance, together with our dedication to customers, respect for employees, performance for shareholders, and partnership with the communities where we do business. At CIBC, our governance philosophy extends from the Board, across management, and into all aspects of our operations. As a Canadian global financial institution, the bank endeavours to go beyond the many regulatory and compliance requirements placed upon it. Our governance framework involves ongoing interaction between Board members and the management team to ensure that the interests of CIBC’s stakeholders are protected and well served. CIBC regularly reviews and enhances its governance practices; it also monitors and, where appropriate, responds to both Canadian and U.S. regulatory developments. CIBC’s standards of governance are consistent with the Toronto Stock Exchange’s corporate governance guidelines. The Sarbanes-Oxley Act, which was signed into law in 2002, was one of the most significant U.S. regulatory developments in decades. Many of its provisions apply to CIBC as a company listed on a U.S. stock exchange. In 2003, CIBC completed a critical assessment of its practices regarding these provisions, including implementation of many initiatives to ensure that we are well positioned to meet these new requirements. Board of Directors The quality, independence and effectiveness of the Board are important defining features that ensure that its oversight obligations are properly fulfilled. CIBC’s Board seeks only the highest quality individuals to serve. In Triple Crown Winner – CIBC is listed on the DJSI World, the FTSE4Good Index and the Corporate Knights Best 50 Corporate Citizens for 2002 Govern_p4_7FINAL.qxd 12/18/03 10:15 PM Page 7 Public Accountability Statement 2003 | Governance and Controls | 7 that regard, there is a formal nomination process in place led by the Board Chairman and the Corporate Governance Committee. Also, the Board, its committees and its members are assessed annually in an internal review, and each member is subject to a formal peer review through a process conducted by independent consultants. During 2003, CIBC further enhanced the independence of the Board by ensuring that the overwhelm- ing majority of its members are “unaffiliated” and by formally separating the roles of chairman and chief executive officer. Former Chairman and Chief Executive Officer John Hunkin was appointed President and Chief Executive Officer, while I became Chairman of the Board, having previously served as Lead Director. In addition, the Board maintains its current practice of holding meetings attended by only non-management directors as part of its regular meeting schedule. This year, the Board underwent an additional structural review with the assistance of an external firm. Based upon its findings, the Corporate Governance Committee reviewed the composition of the Board and defined suitable characteristics for directors. The