Providing high-quality financial disclosure is not a new practice for our organization. Indeed, BMO Financial Group possesses a strong and well-established reputation for  consistent leadership in disclosure practices – and in  corporate governance generally. Our achievements were recognized again this year when  The Globe and Mail ’s survey of corporate governance practices ranked BMO Financial Group first among the country’s banks. We became one of the first companies on the continent  to announce our intention to expense stock options. As well, Chairman and CEO Tony Comper and Chief Finan- cial Officer Karen Maidment signed a statement as part of BMO’s third-quarter results affirming their accountability for BMO’s financial information. In addition, Tony Comper and Karen Maidment signed a certification of BMO Finan- cial Group’s annual results under the new United States Sarbanes-Oxley Act. Our Board of Directors bears the main responsibility for maintaining our continued high standards and encour- aging the evolution of our corporate governance program. In practice, this means that the Board must operate in an effective and independent manner and ensure that BMO  isaccountabletoallthestakeholdersofthecompany. The Board of Directors is also responsible for con- tinuously reviewing trends and evolving best practices, as well as pending legislative or regulatory changes such as As well as stipulating the roles of individual directors, the Charter of Expectations for Directors  sets out the responsibilities to be discharged by BMO’s governing members. These responsibilities include: The Charter of Expectations for Directors , along with the Approval/Oversight Guidelines , represents the backbone  of our governance program. These provide both directors and management with a clear road map of each other’s expectations and commitments to good governance. Equally important, the Board of Directors serves as an example to our entire organization. By establishing the tone – affirming that corporate governance means not just abiding by the rules but also embracing the spirit of those rules – the Board helps to make the tenets of sound cor- porate governance, transparency, disclosure and honesty,  a reality throughout our organization. Sarbanes-Oxley, and for adjusting our governance practices to ensure they remain at the forefront. BMO’s standards of corporate governance are consistent with the objectives of the governance guidelines of the Toronto Stock Exchange and the proposed amendments published in April 2002. In certain instances, such as in the recommended number of “unrelated”directors on the Board and “financial experts” on theAuditCommittee,ourstandardsexceedtheseguidelines.  Charter of Expectations for Directors BOARD OF DIRECTORS CORPORATE GOVERNANCE AND BOARD OF DIRECTORS In a year marred by unprecedented corpor ate scandal and malfeasance, corporate  governance has become an area of heighte ned concern for investors. BMO Financial Grouphasalwaystakentheleadincorpora tegovernanceandcontinuestodoso. STEPHEN E. BACHAND Ponte Vedra Beach, Florida Corporate Director and former  President and Chief Executive Officer  Canadian Tire Corporation, Limited DAVID R. BEATTY, O . B . E . Toronto, Ontario Chairman and Chief Executive Officer Beatinvest Limited ROBERT CHEVRIER, F . C . A . Montreal, Quebec President, Roche Management Co. Inc. F. ANTHONY COMPER Toronto, Ontario Chairman and Chief Executive Officer BMO Financial Group DAVID A. GALLOWAY Toronto, Ontario Corporate Director and former  President and Chief Executive Officer Torstar Corporation BMO FINANCIAL GROUP ANNUAL REPORT 2002 7