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I am pleased to report to you for the first time as Chairman of the Board of Directors of Royal Bank of Canada. Since before I was elected as a director in 1996, your board has set an example of corporate governance best practices for global companies. I am committed to ensuring this leadership continues for the benefit of shareholders and other stakeholders.



As a group, your board is aware that effective governance is more than a matter of simple compliance with legal obligations, or even with best practices. It is also a matter of contributing to corporate performance by shaping values, refining judgments and advising management in its pursuit of long-term shareholder value.

Our task is not to manage the organization but to ensure effective management. By applying our collective experience in reviewing, counselling, coaching and challenging senior management on strategy and other major corporate decisions, the board can enhance management’s ability to generate returns for shareholders.

A strong governance culture fosters the structures and relationships by which the board’s influence can be effectively expressed. Your board is a team that possesses a balanced combination of skills and perspectives of members who make a significant investment of time to properly fulfill their responsibilities. The respective roles of the board and management are defined and respected, with the board’s involvement focused in key areas.

Each director of the company is actively engaged in providing sound guidance to maximize the overall performance of the company. While the board is not the principal creator of strategy, directors are management’s key advisors. Informed, active, ethical and independent directors contribute from a diversity of thought, background and culture. Individually, and as a group, we take seriously our mandate of advising and supervising management, in matters ranging from financial performance to risk management, from strategic development to management evaluation and succession planning.

Your Board of Directors is proud to actively participate in the achievements of Royal Bank of Canada. As your Chairman, I commit to providing independent leadership, cultivating a team approach and keeping the board focused on its objectives. We look forward to working with management in the coming year towards our shared goal of creating long-term shareholder value.

David O’Brien
Chairman of the Board
December 20, 2004





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