Canada Pension Plan Investment Board Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Canada Pension Plan Investment Board Case Solution

Description of the Canada Pension Plan Investment Board.

The Canada pension plan was established in 1966. For much of its history, the plan was dependent on the contribution to pay benefits. It was expected that the CPP plan was unsustainable. It led towards a gradual increase in its contribution awarded to its current ratio, which was 9.9% in the investment Board.

The company operated in various countries like Hong Kong, Luxemburg, Mumbai, New York, and Sao Paulo. Moreover, it was a professional investment management organization with a critical purpose to provide the foundation upon,through which Canadians built financial security in retirement.

Moreover, Canada pension plan investment board was a state-owned pension fund sponsor, and the company invested in public current ratio, variable and fixed outflow and other globally. In addition to this, it employed the quantitative and fundamental analysis to create its portfolio.

Furthermore, it was expected that CPP investment was created through the action of the parliament under the direction of Minister of Finance, Paul Martin. The purpose of CPP investment board was to monitor the funds held by Canada pension plan. Moreover, the CPP investment board started its investment program in 1999, establishing the CPP reserve funds to hold investment earnings whereas,CPP contributions were not required to pay the current pensions.

In addition to this, the role of CPP investment board was to report quarterly to the public regarding its performance, since it hada professional board of directors that oversaw the operations of the CPP reserve fund, as well as it had the responsibility to plan changes. It was expected that the CPP investment board was accountable to parliament and report annually through the ministry of finance. While accountable to parliament, the CPP investment board was not controlled by the government or subject to government appointments.

Furthermore, it was determined that the CPP reserve fund was derived from the Canadian pension plan of employed Canadian, whereas the output was the investment of the contributions. Moreover, the portion of CPP board was growing due to the contributions various from year to year.

It was identified that the company mainly focused on natural resources investment such as oil,gas, mining and agricultural land to increase the investment in Canada and in other countriesas well as to be more profitable. (Canada Pension Plan, 2016)

The management, due diligence and decision making structure.

It was identified that the management had made significant minority investments in public companies to provide strategic capital that generated significant long-term performance. Moreover, the company invested in public markets, global securities, relationship investments and private companies. In addition to this, the management had different policies for each sector and different departments for the required services.

From the analysis, it was observed that the due diligence policies of the company were becoming important globally, particularly for the businesses involved in international trade. Moreover, the large size and high scale of investors indicated that commercial risks were high, giving importance to the need to quickly identify the partners.

Moreover, it was identified that the objective of due diligence was the stability of verifiable means by which the truthfulness of the company could be addressed. Furthermore, the level of intelligence had some advantages:

It ensured that the business met the performance requirements
It revealed the legal standing of the company, included their legal history.
It provided an insight into the operational processes.

The company had identified its values and this enabled it to manage risk more effectively.

Furthermore, the company had high standards of transparency and accountability. The disclosure policy of the company stated that the Canadians had the right to know why, how and where to invest their investment plan money, which would them better returns and what assets were owned on their behalf as well as how the company utilizes their investment to enhance its performance.......................

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