The CSSB is an active leader in instituting good governance procedures. Investment practices adhere to a set of policies that conform to legislative requirements, universally accepted industry standards and internally developed guidelines.

We employ a group of accounting and investment professionals who monitor trading activity independent from the CSSB's Investment Division. These professionals examine the activity against CSSB approved governance policies on a daily, weekly and monthly basis. Policies include

• Professional Conduct Policy
• Statement of Investment Policies and Procedures
• Conflict of Interest Guidelines – Investment Committee
• Proxy Voting Guidelines
• Soft Dollar Standards
• Manager Mandate

If you have any questions or concerns regarding compliance related matters, please contact Investment Communications & Management Services.

Professional Conduct Policy

The CSSB has established personal trading and behavioral guidelines which conform to the CFA Institute’s Code of Ethics and Standards of Professional Conduct (revised 2006). In addition to the CFA Institute guidelines, the CSSB has placed additional trading restrictions on its investment staff.

Statement of Investment Policies and Procedures

Our Statement of Investment Policies and Procedures (SIP&P) guides the investment decision-making process. This document is created by independent consultants and matches the Fund’s assets with its liabilities, now and into the future. Upon its approval by the CSSB, this document is put into effect and monitored for compliance. The SIP&P includes such things as appropriate asset mix limits, investment grade quality, holding limits, investment objectives, valuation procedures and investment management structure.

Conflict of Interest Guidelines – Investment Committee

In order to determine whether or not Investment Committee Members are acting with integrity, in a professional and ethical manner, and in the best interests of Plan members, "Conflict of Interest and Standard of Conduct Guidelines" are necessary. With the assistance of the CSSB's legal counsel, the Guidelines were established in 1999 and are updated as necessary. Members are provided these Guidelines on an annual basis.

Proxy Voting Guidelines

One of our most important rights as investors is the right to vote. In order to ensure that votes are cast in a manner that is most consistent with the long-term objectives of the Fund, the CSSB has established “Proxy Voting Guidelines”. A proxy is the legal transfer to another party of a shareholder’s right to vote. This allows shareholders who cannot attend meetings in person to exercise their right to vote.

It is the objective of the CSSB to vote every share of each holding in the Fund at every meeting of a company’s shareholders. If the holding is managed internally it is exercised by internal management and conversely if the holding is managed by external managers it is exercised by the external manager. The CSSB reserves the right to direct or override the voting decisions if in its view such action is in the best interests of the Fund and Plan members.

Soft Dollar Standards

The CFA Institute is the leading global non-profit professional association in the investment industry, serving investment analysts, portfolio managers and other investment decision-makers. They have issued “Soft Dollar Standards” that emphasize the basic fiduciary responsibilities of investment managers with respect to their clients’ assets and clarify the line between permissible and impermissible uses of client brokerage. They ensure the investment manager places the interests of the client before their own through enhanced and meaningful disclosure of soft dollar practices. While adherence to the standards is voluntary, they complement the CFA Institute Standards of Professional Conduct, standards which are a requirement that CFA Charterholders adhere to.

Beginning in the fall of 2006, advanced reporting standards will be implemented to conform with greater transparency rules developed in the UK during the year.

Manager Mandate

The CSSB employs 11 investment professionals who actively manage approximately 80% of Fund assets. Internally managed asset classes include Bonds & Debentures, Canadian, U.S. and Non-North American Equities, Real Estate and Short-term instruments. By legislative requirement Fund assets are required to be managed in accordance with a Statement of Investment Policies and Procedures. This document is prepared by independent consultants with the intent of guiding investment decisions towards the long-term objectives of the Fund. While adhering to this Policy, the CSSB has placed additional restrictions on investment decision making that are established in these Mandates. More information.

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