| Governance
Policy (NI-58-101) |
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Pursuant to National Instrument 58-101
Disclosure of Corporate Governance Practices
(“NI 58-101”) which came into
effect for financial years ending on or
after June 30, 2005 the Corporation is
required to disclose its corporate governance
practices, as summarized below.
1. Board of
Directors
The Board of Directors is currently comprised of seven (7) members. The Board of Directors is responsible for determining the status of independence for each serving member.
Mr. Albrecht W. A. Bellstedt was elected Chairman of the Board in August 2008 and has been a Director since May 2007. Mr. Bellstedt is an independent Director.
Mr. Ian M. Reid has been a Director since May 2007, and was appointed Vice-Chairman of the Board and Chairman of the Corporate Governance and Nominating Committee in August 2008. Mr. Reid is also an independent Director.
Mr. Brian Tod is a partner of the law firm of Miller Thomson LLP, which the Corporation retains on various matters from time to time and which provides in excess of 25% of the Corporation's external legal services. Due to the extent of these legal services Mr. Tod is not considered to be independent.
Dr. Peter F. Adams is the President and Chief Executive Officer of the Corporation. As a member of management, Mr. Adams is not considered an independent Director.
Mr. George M. Schneider, President of Schneider
Investments Inc. is the past President
of Laird Electric Inc. and is not considered
as independent due to the fact that he
was an executive officer of a subsidiary
of the Corporation within the last three
years.
The other three (3) directors of the Corporation, being Mr. Harry King, Mr. George Schneider and Mr. Henry R. Reid, are all considered to be independent and have no ongoing interest or relationship with the Corporation other than their shareholdings and serving as a director. Mr. King serves as Chair of the Audit Committee and Mr. Schneider serves as Chair of the Human Resources and Compensation Committee.
NI 58-101 suggests that the Board of Directors
of a public Corporation should be constituted
with a majority of individuals who qualify
as “independent” directors.
An “independent” director is
a director who has no direct or indirect
material relationship with the Corporation.
A material relationship is a relationship
which could, in the view of the Board of
Directors, reasonably interfere with the
exercise of a director’s independent
judgment. The Board of Directors is comprised
of a majority of independent directors.
The following Directors of the Corporation
are directors of other reporting issuers:
Director |
Other
Reporting
Issuers |
Albrecht W. A. Bellstedt |
Director, Canadian Western Bank
Lead Director, The Forzani Group Ltd.
|
Harry A. King |
Cogeco Cable Inc. |
Brian
W. L.
Tod |
Eveready
Income
Fund |
The independent Directors of the Corporation
do not hold regularly scheduled meetings
at which non-independent Directors are
not in attendance. However, the Directors
do hold regularly scheduled meetings at
which members of management are not in
attendance including the CEO who
is not an independent Director.
The Chairman of the Board, Albrecht W. A. Bellstedt is an independent Director.
Currently, the Board is satisfied that
it exercises its responsibilities for independent
oversight of management. The ability to
establish ad hoc committees comprised solely
of independent directors provides the Board
with the ability to meet independently
of management whenever deemed necessary
or appropriate and the chair of each such
ad hoc committee provides leadership for
Since the beginning of the Corporation’s
most recently completed financial year
ended December 31, 2006 until March 30,
2007, the Board of Directors held 16 meetings.
The following is a record of attendance
for each Director at such Board meetings:
Director |
Number
of
Board
Meetings
Attended
/
Total
Number of Board Meetings
Held |
Peter
F. Adams |
16
/ 16 |
Stanton
K. Hooper |
15
/ 16 |
Harry
A. King |
16
/ 16 |
Kim
D. McInnes |
10
/ 16 |
Henry
R. Reid |
14
/ 16 |
George
M. Schneider(1) |
11
/ 11 |
Winston
D. Stothert |
16
/ 16 |
Brian
W. L.
Tod |
16
/ 16 |
(1)
Mr. Schneider
was appointed
to the
Board on
May 18,
2006 and
subsequently
attended
11 meetings
as a Director.
2. Board Mandate
The Board of Directors has adopted a set
of Corporate Governance Guidelines and
Board Mandate, which is attached to this
Management Information Circular as Exhibit
C.
3. Position
Descriptions
The Board of Directors has developed written
position descriptions for the Chairman
and the chair of each Board Committee.
The position description for the Chairman
is described in Exhibit C.
The Board of Directors together with the
Chief Executive Officer (“CEO”)
have developed a written position description
for the CEO.
4. Orientation
and Continuing Education
The Board of Directors has developed a
written policy regarding the Orientation
and Continuing Education of Directors.
This policy describes an orientation program
for new Directors in regards to the role
of the Board and its committees, an overview
of the business and the corporate strategy
as well as their roles as Directors. The
policy outlines a framework for continuing
education of Directors in regards to corporate
governance, business issues and personal
development.
5. Ethical
Business Conduct
The Board of Directors has developed
a written Director Code of Ethics. A
copy of this code was filed on SEDAR
at www.sedar.com on October 5, 2006.
Compliance with the code is monitored
by the Governance, Nominating and Risk
Management Committee. The code addresses
conflict of interest, use of corporate
assets, confidentiality and compliance
with laws and regulations. The code also
describes a process to disclose any potential
conflict of interest and to ensure independent
judgment regarding Board discussions
and decision making.
The Board of Directors has developed
a written code of business conduct and
ethics for its employees. The Board has
established a corporate-wide Whistleblowing
Policy. This policy is comprehensive
and addresses issues such as unethical
behaviour and unprofessional conduct
in addition to financial and accounting
matters.
6. Nomination
of Directors
The Governance, Nominating and Risk Management
Committee of the Board is responsible for
the identification of new candidates for
Board nomination. The committee is not
composed entirely of independent Directors.
The Board of Directors is satisfied that
Dr. Peter F. Adams in his capacity as Chief Executive Officer is able to still
exercise the independent judgment expected
of a Director.
The committee has written terms of reference
which describe its duties and responsibilities
with respect to Board nomination and Board
effectiveness. It outlines a process to
consider what competencies and skills the
Board as a whole should possess; to evaluate
the characteristics of the existing Board
with a view to determining areas that could
be strengthened through new Board members;
and to approach potential candidates.
7. Compensation
The Human Resources and Compensation
Committee is responsible for reviewing
and recommending to the Board the compensation
philosophy, guidelines and general plans
for remuneration of the Corporation’s
employees, officers and Directors. The
committee reviews and recommends to the
Board the annual compensation of the
CEO, the CFO and the named executive
officers.
The members of the committee are disclosed
above under the heading “Matters
to be Acted Upon at the Meeting - Election
of Directors”. The committee is
not composed entirely of independent
Directors. The Board of Directors is
satisfied that the two non-independent
directors Dr. Peter F. Adams and Mr.
Brian W.L. Tod are valuable contributors
to the committee and that their non-independence
will not affect their roles on this committee.
In addition, with regards to the compensation
of the Chief Executive Officer,
these matters are debated by the full
Board of Directors, with Dr. Adams absent
from the discussion and voting.
The committee has written terms of reference
as described in Exhibit D which is attached
to this Management Information Circular.
In respect to compensation matters, these
include reviewing and recommending to
the Board of Directors the compensation
philosophy, guidelines and general plans
for base salaries, corporate benefits,
bonuses and other incentives, long term
compensation programs and other compensation
or benefit packages for employees. As
well, the terms of reference outline
responsibility for reviewing and approving
corporate goals and objectives relevant
to Chief Executive Officer compensation;
Director compensation; the review of
executive compensation disclosure; succession
plans for officers and key employees;
and material changes and trends in human
resources policy, procedure, compensation
and benefits.
8. Other Board
Committees
The Corporation has no other standing committees
at this time other than the Audit Committee,
the Human Resources and Compensation Committee
and the Governance, Nominating and Risk
Management Committee.
9. Assessments
The Governance, Nominating and Risk
Management Committee has been given the
mandate from the Board to monitor and
assess the overall effectiveness of the
Board, its committees and individual
Directors.
The written terms of reference for the
committee include a section on Board
effectiveness practices which describe
an evaluation and assessment process.
The process includes: self-evaluation
of each Board meeting by means of a questionnaire;
annual consultation with each Director;
regular evaluation of the Board and its
committees by the Governance, Nominating
and Risk Management Committee; and an
anonymous survey questionnaire related
to the performance of the Chairman of
the Board, which is sent to each Director.
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