Carol Hansell Completes CAAT Pension Plan's Governance Review
The CAAT Pension Plan is making changes to improve its governance over executive compensation, workplace relationships and succession planning after failures in the plan’s oversight spurred an abrupt overhaul of its senior leadership earlier this year.
In a letter to members and employers published on Friday, the board of trustees for the $25.4-billion pension plan said it made “enhancements” to its governance procedures after a third-party review, which began last December and concluded earlier this year.
CAAT did not release the full results of that review, which was led by Carol Hansell, the founder and senior partner of Hansell LLP. And the letter to members provides only a broad outline of the governance changes that have been implemented.
CAAT hired Ms. Hansell after some of the plan’s most senior executives, in a letter sent to trustees in November, 2025, urged the board to investigate instances where they felt governance controls had broken down.
Their concerns focused on the conduct of then-chief executive officer Derek Dobson. He had received a $1.6-million vacation payout as compensation for unused time off that was at odds with internal policies. He was also having a personal relationship with a staff member for more than a year, with the board’s approval.
After CAAT’s board initially stood by Mr. Dobson, three of the plan’s top executives left in January, with little explanation. After The Globe and Mail reported on internal tensions at CAAT, its board chair was ousted, its vice-chair resigned and Mr. Dobson left the plan as part of a settlement that required him to repay the $1.6-million payout.
CAAT is a multiemployer pension plan serving Ontario’s colleges and more than 800 public- and private-sector employers with about 125,000 members. The Globe has been a participating employer since 2022.
Friday’s letter to CAAT members and employers says the board took steps to “strengthen its oversight” of executive compensation, with improved transparency. CAAT’s 2025 annual report includes a table that discloses total pay to the plan’s senior executive team. But it does not reveal individual compensation levels as most other major Canadian pension plans have for years.
The letter refers to “planned compensation disclosure” for future years, without elaborating. In 2025, CAAT’s top leaders were paid a combined $9.73-million, including the $1.6-million vacation payment that was later repaid in 2026. That compared with $7.65-million in 2024.
CAAT’s board also said it has “updated its workplace relationship policy” to prohibit internal relationships involving the CEO or senior executives, regardless of whether there is a direct reporting line between the employees.
Earlier this year, CAAT initially said that Mr. Dobson’s relationship with an employee was in “full compliance” with policies that had been reviewed by external legal counsel. The board had planned to allow Mr. Dobson and the employee to stay in their roles, with measures in place that were intended to prevent conflicts of interest or the perception of favouritism.
On Friday, the board said it has “affirmed” that CAAT’s human-resources policies apply to all employees, regardless of their title or role, including those that relate to carrying over vacation days or claiming pay for unused days.
Mr. Dobson received reimbursements for accumulated vacation days despite internal company guidelines that stated vacation time must be used within one year after the year when it was earned, and capped payouts at five vacation days. Earlier this year, CAAT said the CEO had an employment contract that governed his pay and benefits.
“We believe clear, consistently applied policies will enhance accountability and fairness across the organization,” trustees wrote in Friday’s letter to members.
CAAT’s board is also “strengthening succession planning” for board and committee leaders, the CEO and senior executives, the letter said. In June, CAAT started a search for a permanent CEO, led by executive consulting firm Egon Zehnder.
The plan is currently led by interim CEO and chief investment officer Kevin Fahey, who oversees a revamped leadership team. A new board chair and vice-chair were chosen from the existing group of trustees earlier this year.
Finally, CAAT’s board said it will “continue to regularly review the skills and experiences of trustees to ensure the board maintains the expertise needed to meet its responsibilities and the regulatory expectations of the administrator of a pension plan of CAAT’s size and complexity.”
The board is divided between trustees appointed by the union that represents many college employees in Ontario, the Ontario Public Service Employees Union (OPSEU), and the College Employer Council, which advocates on behalf of educational institutions.
“Of course, good governance only gets stronger through ongoing improvement,” the board’s letter said.
On Friday, CAAT Pension Plan's Board released this letter to members and employers:
To Members and Employers,
We want to highlight several enhancements the Board has made to build on how the Plan is governed in its members’ best interests. These actions follow the conclusion of an independent governance review of the Plan, led by Carol Hansell (Senior Partner, Hansell LPP). Importantly, the matters examined did not relate to the Plan’s financial health and funded status. Your pension is secure.
Recently, we initiated the search for a permanent CEO. Our focus will be on a new leader who can combine strategic vision with operational discipline, inspire confidence across stakeholders and build on CAAT’s strong culture and performance. The Board is strengthening succession planning for Board and committee leaders, the CEO, and senior executives to maintain strong leadership over time.
The Board took additional steps to strengthen its oversight of CEO and senior executive compensation. At the Board’s direction, CAAT has also made executive compensation more transparent through its 2025 Annual Report and planned compensation disclosure. Together, these initiatives reinforce Board oversight, enhance transparency, and support sound governance of executive compensation.
CAAT has updated its workplace relationship policy. It now prohibits internal relationships involving the CEO or senior executives, regardless of reporting relationships. The Board has also affirmed that CAAT’s Human Resources policies apply to all employees, regardless of level, title or role. This includes policies related to vacation carry-over and vacation pay. We believe clear, consistently applied policies will enhance accountability and fairness across the organization.
The Board remains committed to continuously enhancing its governance practices. As part of this commitment, it will continue to regularly review the skills and experiences of Trustees to ensure the Board maintains the expertise needed to meet its responsibilities and the regulatory expectations of the administrator of a pension plan of CAAT's size and complexity. Over the past year, seven new Trustees have joined the Board, further strengthening and complementing the existing mix of skills, experience, and perspectives required to provide effective oversight of the Plan.
In addition to the enhancements outlined above, in 2026, the Board appointed a new Chair and Vice-Chair as well as an Acting CEO, who has deep knowledge of the organization, sound judgment, and the steady leadership needed to maintain stability in our operations and continuity at CAAT. And the Plan announced a new leadership team to execute on the Plan’s strategy, maintain stakeholder trust and continue to deliver on CAAT’s pension promise to its members.
Taken together, these actions help provide CAAT with the leadership and governance practices needed to maintain the prudent and responsible management of the Plan. Of course, good governance only gets stronger through ongoing improvement. The Board will continue to act in the members’ best interests, so the Plan can help support the retirement they want and deserve.
CAAT Board of Trustees
Let me briefly go over this.
First, CAAT Pension Plan's Board chose the right person to conduct a thorough governance review.
Carol Hansell of Hansell McLaughling Advisory is one of the foremost experts in Canada on corporate governance.
She has written many articles and a comprehensive book on the subject and has received awards for her accomplishments.
She has served on the boards of the Bank of Canada, the Public Sector Pension Investment Board, Toronto East General Hospital and SickKids Foundation, among others.
I trust her knowledge and judgment and think highly of her, so her handling of the governance review at CAAT Pension Plan gives this report huge credibility.
The report has not been made public, nor does it need to be made public, but we see the Board is already moving fast to enhance oversight and implement much-needed changes.
The Board has made executive compensation more transparent, but has yet to commit to doing what all the other large and medium-sized pension plans I track closely do. It should publish the compensation of the top senior officers every year when it releases the annual report.
This is just basic good governance and is much better than releasing the aggregate compensation of senior officers (if most of that goes to the CEO, members have a right to know why).
Updating the workplace relationship policy to now prohibit internal relationships involving the CEO or senior executives, regardless of reporting relationships, is just basic common sense.
I don't know who former CEO Derek Dobson had a relationship with at CAAT (I suspect I now know who), but it wasn't one of his best decisions in terms of showing good judgment (the world is a big place; my advice to all employees, no matter their rank, is to avoid workplace relationships at all costs; they rarely end well).
The Board also said it will continue to regularly review the skills and experiences of Trustees to ensure the Board maintains the expertise needed to meet its responsibilities and the regulatory expectations of the administrator of a pension plan of CAAT's size and complexity."
This, too, is Governance 101. You need a competent board of directors that understands complex subject matters to properly oversee activities at large pension plans.
Anyway, I doubt CAAT Pension Plan will release Carol Hansell's full governance review, but the Board is doing the right thing by communicating key findings effectively.
I personally wouldn't release it, no need to, as they are taking the right course of action to act on key recommendations.
I'll end it there, not much to add here, nor was I going to cover this in detail but wanted my audience to be aware that the governance review is completed, and it was done by a real corporate governance expert who knows what she's talking about.
Below, strong Canadian corporate governance is the backbone of board accountability and long-term value creation. Yet boards today operate under intensifying regulatory scrutiny, with over 120 enforcement actions initiated by Canadian securities regulators in 2023 alone. Directors must navigate overlapping federal and provincial regimes, while facing growing personal liability risks. Nearly 1 in 4 companies in Canada have disclosed material governance deficiencies in recent filings, underscoring the increasing complexity boards must manage.
This certified program will provide you with a comprehensive understanding of Canada’s corporate governance framework, equipping you with practical tools to lead boards effectively, manage liability risks, and ensure regulatory compliance. You will gain applied knowledge of the Canada Business Corporations Act (CBCA), provincial corporate statutes, and securities regulations, while mastering key concepts such as fiduciary duties, duty of care, duty of loyalty, and the business judgment rule to support sound board decisions.
All I can share with you is that governance is a work in progress, courses provide basics, the real test is when it hits the fan. That's when governance is critically important.
Comments
Post a Comment