Rotman School Launches New Ranking of Corporate Boards; BCE's Leadership Demonstrates Good Governance

TORONTO, October 3, 2002 -- A new transparent system that rates the effectiveness of Boards of Directors has been created by the Clarkson Centre for Business Ethics and Board Effectiveness, CC(BE)² at the University of Toronto's Rotman School of Management. The Rotman P² Rating System ranks boards by their potential to act in an effective way and by their performance as indicated by their past practices. It results in a transparent and adaptable rating system that assigns companies listed on the TSX 300 a grade from investment grade (AAA+ to BB) to questionable (BB to B) to non-investment grade (C and D). The Rotman P² Rating System is not publicly available yet since leading institutional investors are currently testing it.

"It's evident to investors that they must inquire about Board Effectiveness when assessing the investment potential of any publicly listed corporation," says Prof. David R. Beatty, O.B.E, Conway Director of the Clarkson Centre. "Investment decision making must now include enquires about Board of Directors and our new Rating System puts a powerful tool in the hands of investors."

Today the CC(BE)² announced that it re-affirmed a strong "AA" Governance Rating for BCE Inc. as a result of the corporation's decision to split the Chairman's role from the CEO's role. In addition, Prof. Beatty said he was delighted by the leadership shown by BCE Chairman Richard J. Currie in taking such a significant ownership of the company's shares. These developments push BCE into the top ten percent of firms for good governance in the Rotman P² Rating System.

"Having such a distinguished business leader take the lead in corporate governance in this way is a wonderful example to other corporations," said Prof. Beatty, who has extensive experience as a Director and Chairman. "An independent board will be a strong and motivated board and, via share ownership, will be an effective board."

In the Rotman P² Rating System, publicly traded companies are rated in six scoring categories including:

1. Board Members' Independence - directors must be independent of management to properly represent shareholders
2. Board Members' Capabilities and Skills - Directors must have the skills and experience to contribute to the company as a board member
3. Board Members' Motivation - Directors must be motivated to properly represent the shareholders. For example, directors should own shares in the company.
4. Board Meeting Structure - Boards must ensure that they are correctly structured to carry out their work in the interest of the shareholders such as the separation of the Chair from the CEO.
5. Board Processes - Boards must ensure that they are properly run to carry out their work in the interest of the shareholders.
6. Board Outputs - Board outputs over the previous three years are measured. Scores are deducted for negative past practices and rewarded for exemplary past practices.