Board Composition and Selection
The Board shall consist of a minimum of 5 and a maximum of 20 directors, as determined from time to time by the directors following a recommendation by the Corporate Governance and Nominating Committee. Directors are elected annually by the Company’s shareholders.
A majority of the directors shall be “independent” within the meaning of applicable rules of securities regulatory authorities and stock exchanges.
Selection of New Directors
A quorum of directors may fill vacancies in existing or new director positions to the extent permitted by applicable law. Directors so appointed by the Board will serve only until the next annual meeting unless re-elected by the shareholders at that time.
Nominees for membership on the Board will be recommended to the Board by the Corporate Governance and Nominating Committee. The Board will then recommend the nominees to the shareholders for election at the annual meeting. In selecting nominees as new directors, the Corporate Governance and Nominating Committee will assess the ability to contribute to the effective management of the Company, taking into account the needs of the Company and the individual’s background, experience, perspective, skills and knowledge that is appropriate and beneficial to the Company.
Election of Directors
Each director should be elected by the vote of a majority of the shares represented in person or by proxy at any meeting for the election of directors. Accordingly, if any nominee for director receives, from the shares voted at the meeting in person or by proxy, a greater number of shares withheld than shares voted in favour of his or her election, the director must promptly tender his or her resignation to the Chairman of the Board, to take effect on acceptance by the Board. The Corporate Governance and Nominating Committee will expeditiously consider the director's offer to resign and make a recommendation to the Board whether to accept it. Within 90 days of the shareholders' meeting, the Board will make a final decision and announce it by way of press release.
This policy does not apply to a contested election of directors, that is, where the number of nominees exceeds the number of directors to be elected. Any director who tenders his or her resignation will not participate in the deliberations of the Corporate Governance and Nominating Committee or the Board. In the event any director fails to tender his or her resignation in accordance with this policy, the Board will not renominate the director. The Board is not limited in any action it may take if a director's resignation is accepted, including appointing a new director to fill the vacancy.
Management of the Company, working with the Corporate Governance and Nominating Committee will provide an orientation process for new directors, including providing background materials on the Company and its business. As appropriate, management will prepare additional educational sessions for directors on matters relevant to the Company and its business. Directors are also encouraged to take advantage of other available educational opportunities that would further their understanding of the Company’s business and enhance their performance on the Board.
Functioning of the Board
Number and Schedule of Meetings
The Board will hold a minimum of six regularly scheduled meetings per year. Prior to the end of each year, the Secretary will propose a schedule of Board meetings for the following calendar year for consideration by the Board. Additional meetings may be held from time to time as necessary or appropriate.
The Chairman of the Board and the Chief Executive Officer will establish the agenda for each regularly scheduled Board meeting, giving consideration to any suggestions from other members of the Board. Any director may suggest agenda items and may raise at meetings other matters that they consider worthy of discussion.
Distribution of Materials
The agenda and the related information and data that is important to the Board’s understanding of the business to be discussed for each regularly scheduled meeting and, where feasible, each special meeting, will be distributed sufficiently in advance of the meeting to provide a reasonable opportunity for review, except when such material is too sensitive to be put in writing.
Directors should make reasonable efforts to attend all meetings of the Board of Directors and of all Board committees upon which they serve. To prepare for meetings, directors should review the materials that are distributed in advance of those meetings. Although the Board recognizes that, on occasion, circumstances may prevent directors from attending meetings, directors are expected to ensure that other commitments do not materially interfere with the performance of their duties. Subject to extenuating circumstances (such as illness, for example), directors are expected to attend a minimum of 66% of regularly scheduled Board and committee meetings. Directors should also make reasonable efforts to attend the annual meeting of shareholders of the Company.
Executive and Independent Sessions
The Board of Directors of the Company will schedule regular executive sessions at which the non-management directors (i.e. directors who are not Company officers) meet without management participation. In addition, the independent directors of the Company will hold regular sessions at which the independent directors meet in the absence of any non-independent directors. The Lead Director will preside at each executive session and at each session of the independent directors.
The independent directors will elect one of such independent directors to serve as the Lead Director. The Lead Director will preside at each executive session of the Board and each session of independent directors and will carry out such other duties as the Board may determine. The Board of Directors will establish methods by which interested parties may communicate directly with the Lead Director and cause such methods to be disclosed.
Access to Management and Advisors
The Company will provide directors with complete access to the management of the Company. The Board of Directors and Board committees, to the extent set forth in the applicable committee mandate, have the right to consult and retain independent legal and other advisors at the expense of the Company. Directors are entitled to reasonably rely on advice from outside advisors such as lawyers, accountants, engineers or other persons whose profession lends credibility to a statement by such person. Directors should assess the qualifications of any such advisors and the processes such advisors use to reach their decisions and recommendations.
The Board of Directors reserves the right to determine, from time to time, how to configure the leadership of the Board and the Company in the way that best serves the Company.
The Board is responsible for the stewardship of the Company and for the supervision of the management of the business and affairs of the Company. The Board has adopted a written mandate setting out specific areas of responsibility, including responsibilities relating to oversight of management, financial and risk matters, business strategy, communications and reporting, corporate governance and Board organization.
The Board believes that directors should be shareholders and have a financial stake in the Company. The Board has established minimum share ownership standards for directors and will review such standards from time to time. Such minimum share ownership requirements will be disclosed annually in the Company’s management information and proxy circular.
Contact with Analysts, Investors and the Media
The Company’s Disclosure Policy provides that directors, officers and employees who are not authorized spokespersons must not communicate information regarding the Company to the investment community, the media or others, unless specifically requested to do so by an authorized spokesperson. Directors receiving inquiries from analysts, investors, the media or others should refer them to the Chief Executive Officer or other authorized spokesperson identified in the Company’s Disclosure Policy.
Conduct and Ethics Standards for Directors
The Company has adopted a Code of Business Conduct and Ethics. Directors are required to comply with such Code.
Committees of the Board
The Board may establish such committees as it deems appropriate and delegate to them such authority permitted by applicable law and the Company’s bylaws as the Board sees fit.
The committees will operate in accordance with applicable law, their respective mandates as adopted and amended from time to time by the Board, and the applicable rules of securities regulatory authorities and stock exchanges.
All of the members of each of the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee shall be directors whom the Board has determined are “independent”, taking into account applicable rules and regulations of securities regulatory authorities and stock exchanges.
Each of the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee will hold periodic in camera sessions during which the members of the committee will meet in the absence of members of management of the Company.
The Compensation Committee will make recommendations to the full Board of Directors as to the form and amount of director compensation, including cash, equity-based awards and other director compensation. The Company recognizes that it is important to set director compensation at an appropriate level so that it does not compromise any director’s independence. Directors’ compensation will be determined based on this principle, taking into account market practices for comparable companies, and will reflect an appropriate balance between cash and equity.
The Board believes that there is value to having continuity of directors who have experience with the Company. Accordingly, there are no limits on the number of terms for which a director may hold office.
Individuals may serve as directors of the Company until the age of 72. Except as provided below, directors shall retire at the next annual meeting of shareholders of the Company after such director’s 72nd birthday. Upon the recommendation of the Corporate Governance and Nominating Committee, the Board may propose to the shareholders of the Company that a director be re-elected after reaching 72 years of age if it is in the best interests of the Company. In recognition of the value of continuity of directors having experience with the Company, directors holding office on January 1, 2003 shall be exempt from such retirement policy.
Directors will be required to tender a proposed letter of resignation from the Board upon the occurrence of any of the following events: the director’s principal occupation or business associations change materially; a change in the country of residence of the director; failure to attend at least 66% of regularly scheduled Board and committee meetings during the preceding calendar year; or any other change occurs in the personal or professional circumstances of the director that might reasonably be perceived as adversely affecting the director’s ability to effectively serve as a director of the Company. In such circumstances, the Corporate Governance and Nominating Committee will review the director’s continuation on the Board and make a recommendation to the Board as to whether the Board should accept the director’s resignation or request that the director continue to serve.
Other Board Services
The Board does not believe that its members should be prohibited from serving on boards and committees of other organizations and, accordingly, has not adopted any guidelines limiting such activities. The number of other boards and committees that a director sits on will be left to the discretion of the individual director. However, directors should recognize that board and committee service requires significant time and attention in order to properly discharge their responsibilities.
If a member of the Company’s Audit Committee simultaneously serves on the audit committees of more than three public companies, the Board, with the assistance of the Corporate Governance and Nominating Committee, will consider the matter and determine whether such simultaneous service may impair the ability of such member to serve on the Company’s Audit Committee.
Management Evaluation and Succession
The Compensation Committee is responsible for conducting an annual review of the performance and compensation of the Chief Executive Officer and reporting to the Board of Directors in connection with such performance and compensation.
The Compensation Committee is responsible for reviewing and making recommendations to the Board as appropriate in connection with the Company’s succession planning with respect to the Chief Executive Officer and other senior executive officers.
The Corporate Governance and Nominating Committee will conduct an annual evaluation to determine whether the Board, its committees and individual directors are functioning effectively and will report its findings and make any appropriate recommendations to the full Board. The Board will discuss the evaluation to determine what, if any, action could improve Board, Board committee or individual director performance.
Review of Guidelines
The Board of Directors, with the assistance of the Corporate Governance and Nominating Committee, as appropriate, shall review these Corporate Governance Guidelines on an annual basis to determine whether any changes are appropriate.
Amendment, Modification and Waiver
These Guidelines may be amended, modified or waived by the Board of Directors and waivers of these Guidelines may also be granted by the Corporate Governance and Nominating Committee.