The Board of Directors and management of the Company are committed to maintaining a high standard of corporate governance. The Board has responsibility for the overall stewardship of the Company and discharges such responsibility by reviewing, discussing and approving the Company's strategic planning and organizational structure and supervising management with a view to preserving and enhancing the underlying value of the Company. Management of the business within this process and structure is the responsibility of the Chief Executive Officer and senior management.
The Board has adopted the following guidelines to assist it in its corporate governance responsibilities.
1. Board Mandate
The Board has responsibility for the stewardship of the Company and has adopted a formal mandate setting out the Board's stewardship responsibilities, including the Board's responsibilities for the appointment of management, management of the Board, strategic planning, monitoring of financial performance, financial reporting, environmental oversight, risk management, oversight of company policies and procedures, communications and reporting and compliance.
2. Corporate Strategy
The Board believes that management is responsible for the development of long-term corporate strategy, while the role of the Board is to review, question and validate, and ultimately to approve the strategies proposed by management. The Board shall review the Company's long-term strategy annually.
3. Succession Planning
The Board expects management succession planning to be an on-going activity to be reviewed by the Human Resources and Compensation Committee and approved by the Board. This planning process shall include, on a continuing basis, the Chief Executive Officer's recommendation of a successor in the event of an unexpected incapacitation of the Chief Executive Officer.
4. Board Communication with Stakeholders
The Board has reviewed and approved a Corporate Disclosure Policy for the Company. The Board, or an appropriate Committee of the Board, reviews the content of the Company's major communications to shareholders and the investing public, including quarterly and annual reports, management's discussion and analysis, proxy circulars, the annual information form and any prospectuses that may be issued.
The Board believes it is a function of management to speak for the Company in its communications with the investment community, the media, customers, suppliers, employees, governments and the general public. It is understood that the Chair or other individual directors may from time to time be requested by management to assist with such communications. If communications from stakeholders are made to the Chair or other individual directors, the other individual directors receiving the communication will inform and consult with the Chair, and the Chair will inform and consult with management to determine any appropriate response.
5. Corporate Governance
The Corporate Governance Committee is responsible for developing and recommending improvements to these corporate governance guidelines for implementation by the Board.
Board Organization And Membership
1. Selection of Chair of the Board
The Chair shall be appointed by the Board after consideration of the recommendation of the Corporate Governance Committee. The Board has approved and shall periodically review a position description for the Chair.
The Board has a preference for an independent, non-executive Chair of the Board, but is prepared to consider exceptions when that would be in the best interests of the Company.
2. Lead Director Concept
The role of the lead director is normally filled by the non-executive Chair of the Board. At any time when the Chair is an employee of the Company, the non-management directors shall select an independent director to carry out the functions of a lead director. This person would chair regular meetings of the non-management directors and assume other responsibilities which the non-management directors as a whole have designated.
3. Board Size
The Board has the ability to increase or decrease its size within the limits defined by the Company's Articles. The Board shall determine its size with regard to the best interests of the Company. It is the view of the Board that the size of the Board should be sufficient to provide a diversity of expertise and opinions and to allow effective committee organization, yet small enough to enable efficient meetings and decision-making and maximize full Board attendance. The Board shall review its size if a change is recommended by the Corporate Governance Committee.
4. Mix of Directors
At all times a majority of the directors shall be independent directors.
5. Independence of Non-Management Directors
The Board has determined that an “independent director” means a director who is not a member of management and is free from any interest and any business, family or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act with a view to the best interests of the Company (for the purposes of this section, “Company” shall mean Placer Dome Inc. and all of its consolidated subsidiaries), other than interests and relationships arising from shareholdings in the Company. No director qualifies as “independent” unless the Board affirmatively determines that the director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company) other than as a director, or through interests and relationships arising from shareholdings in the Company. In addition:
A director shall not be independent if:
a. the director is, or has been within the last three years, an employee of the Company, or an immediate family member of the director is, or has been within the last three years, an executive officer, of the Company;
b. the director has received or has an immediate family member who has received during any twelve-month period within the last three years, more than CAD $75,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). Compensation received by an immediate family member for service as an employee of the Company (other than an executive officer) need not be considered in determining independence under this test;
(i) the director or an immediate family member is a
current partner of a firm that is the Company’s internal or external auditor;
(ii) the director is a current employee of such a firm;
(iii) the director has an immediate family member who is a current employee of such a firm and who participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; or
(iv) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on the Company’s audit within that time;
d. the director was affiliated with, a partner of, or employed by, or an immediate family member of the director was affiliated with, a partner of, or employed in a professional capacity by, the Company’s present or former internal or external auditor after March 30, 2004;
e. the director or an immediate family member of the director is or has been within the last three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee;
f. the director is a current employee, or an immediate family member of the director is a current executive officer of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years exceeds the greater of US$1 million, or 2% of such other company’s consolidated gross revenues; and
g. the director serves as an executive officer of a tax exempt organization that received contributions from the Company within the preceding three years which, in any single fiscal year exceeded the greater of US$1 million, or 2% of such tax exempt organization’s consolidated gross revenues.
The following commercial or charitable relationships shall not be considered to be material relationships that would impair a director’s independence:
a. if a director is a director of an affiliate of the Company provided that the director, except for such relationship, would be considered to be independent with respect to both boards;
b. if a director is a director or an officer of another company which is indebted to the Company, or to which the Company is indebted, and the total amount of either company’s indebtedness to the other is less than two percent of the total consolidated assets of the company he or she serves as a director or as an officer; and
c. if a director serves as an officer, director or trustee of a charitable organization, and the Company’s discretionary charitable contributions to the organization are less than the greater of US$1 million dollars or 2% of that organization’s total annual charitable receipts.
The Board may adopt other categorical standards for determining whether a director is independent if recommended by the Corporate Governance Committee.
Independent directors and their firms shall not be retained for consulting without the approval of the Board.
For Audit Committee purposes only, a director shall not be independent if:
a. the director is not independent within the meaning set forth above;
other than in his or her capacity as a member of the
Audit Committee, the Board, or any other Board Committee:
(i) the member accepts directly or indirectly any consulting, advisory, or other compensatory fee from the Company or any subsidiary thereof, provided that compensatory fees do not include the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Company (provided that such compensation is not contingent in any way on continued service); or
(ii) the member is an “affiliated” (as such term is understood under applicable securities laws) person of the Company or any subsidiary thereof.
the director does not satisfy the Audit Committee “
The Board shall review the report of the Corporate Governance Committee on its review of the independence of each of the non-management directors.
6. Principal Occupation Changes by Directors
A non-management director who makes a major change in principal occupation shall submit his or her resignation to the Board for consideration. It is not intended that non-management directors who retire or whose professional positions change should necessarily leave the Board. Rather, the Board believes it is appropriate in such circumstances to conduct a review, with the assistance of the Corporate Governance Committee, of the continued appropriateness of Board membership.
When the CEO or any other officer ceases to be an officer, such officer, if a director, shall submit his or her resignation to the Board for consideration.
7. Term Limits for Directors
The Board has determined that fixed term limits for directors should not be established. The Board is of the view that such a policy would have the effect of forcing directors off the Board who have developed, over a period of service, increased insight into the Company and who, therefore, can be expected to provide an increasing contribution to the Board. At the same time, the Board recognizes the value of some turnover in Board membership to provide on-going input of fresh ideas and views and the Corporate Governance Committee is mandated to annually consider recommending changes to the composition of the Board.
8. Retirement Age for Directors
Unless otherwise determined by the Board, no person shall be appointed or elected as a director once that person has reached 70 years of age.
9. Criteria for Board Membership
The Corporate Governance Committee is mandated to review annually the competencies, skills and personal qualities applicable to candidates to be considered for nomination to the Board. The objective of this review shall be to maintain the composition of the Board in a way that provides, in the judgment of the Board, the best mix of skills and experience to provide for the overall stewardship of the Company. This review shall take into account the desirability of maintaining a reasonable diversity of personal characteristics such as age, gender, geographic residence and origin. However, all directors should possess the highest personal and professional ethics, integrity and values and be committed to representing the long-term interests of the shareholders. They must also have an inquisitive and objective perspective, practical wisdom and mature judgment, outstanding ability in their individual fields of expertise and a willingness to devote necessary time to Board matters.
A director's acceptance of additional positions as a corporate director with for-profit corporations at arm's length to the Company is subject to the Board's review.
10. Selection of New Director Candidates
The Corporate Governance Committee is mandated to recruit and consider candidates for director and to make recommendations to the Board. Directors are encouraged to identify potential candidates. The Chair and the Chief Executive Officer shall be consulted and have input into the process. An invitation to stand as a nominee for election to the Board will normally be made to a candidate by the Board through the Chair or the Chair's delegate.
11. Director Orientation and Education
The Corporate Governance Committee is mandated to oversee an orientation and education program for new directors and ongoing educational opportunities for all directors.
Board Committees And Terms Of Reference
1. Board Committees
The Board has determined that there should be four Board Committees: (i) the Audit Committee; (ii) the Corporate Governance Committee; (iii) the Human Resources and Compensation Committee; and (iv) the Safety and Sustainability Committee. This structure may change as the Board considers from time to time which of its responsibilities can best be fulfilled through detailed review of matters in committee. Each committee shall operate according to a Board-approved written charter outlining its duties and responsibilities.
The responsibilities of the Audit Committee include oversight of the external auditors, the internal auditors and the monitoring of audits, review of accounting principles and practices, monitoring of internal controls, communications with others respecting financial reporting matters, and monitoring of the Company's financial disclosures, and finance matters.
The responsibilities of the Corporate Governance Committee include oversight with respect to Board composition and director nominations, director compensation and protection, corporate governance, business and ethical conduct, director orientation and continuing education, Board evaluations, Board operations, committee composition, and Board independence.
The responsibilities of the Human Resources and Compensation Committee include the compensation of senior officers and compensation policies, and succession planning.
The responsibilities of the Safety and Sustainability Committee include oversight with respect to the management of health and safety, and sustainability issues.
2. Membership of Committees
The Board has determined that the Audit Committee, the Corporate Governance Committee and the Human Resources and Compensation Committee shall be composed entirely of independent directors. At a minimum, the Safety and Sustainability Committee shall be composed of a majority of independent directors. In addition, all members of the Audit Committee shall be financially literate and at least one member must be an audit committee financial expert. The Board shall periodically review and approve the meaning of "financially literate" and "audit committee financial expert".
After receipt of recommendations from the Corporate Governance Committee, the Board shall appoint the members of the committees annually, and as necessary to fill vacancies, and shall appoint the chair of each committee. Members of the committees shall hold office at the pleasure of the Board.
3. Oversight of Committee Functions
The purpose of Board committees is to assist the Board in discharging its responsibilities. Notwithstanding the delegation of responsibilities to a Board committee, the Board is ultimately responsible for matters assigned to the committee for its determinations. Except as may be explicitly provided in the charter of the committee or a resolution of the Board, the role of the Board committee is to review and make recommendations to the Board with respect to the approval of matters considered by the committee.
Board Meetings And Materials
1. Meeting Agendas
The Chair and the Chief Executive Officer, in consultation with the Corporate Secretary, shall develop the agenda for each Board meeting.
2. Meeting Materials
Meeting materials shall be provided to directors before each Board meeting in sufficient time to ensure adequate opportunity exists for review. It is recognized that under some circumstances, due to the confidential nature of matters to be discussed at a meeting, it would not be prudent or appropriate to distribute written materials in advance.
3. Non-Directors at Board Meetings
The Board believes there is value in having certain members of senior management attend each Board meeting to provide information and opinion to assist the directors in their deliberations. Attendance by senior management shall be determined by the Chief Executive Officer with the concurrence of the Chair. Management attendees shall be excluded for any agenda items that are reserved for discussion among directors only.
4. Executive Sessions of Directors and Non-Management Directors
The Board has determined that an in camera meeting of the directors and an in camera meeting of the non-management directors shall be held in conjunction with every regular meeting of the Board.
Director Compensation And Share Ownership
1. Director Compensation
The Board has determined that the directors should be compensated in a form and amount that is appropriate and which is customary for comparative companies, having regard to such matters as time commitment, responsibility and trends in director compensation.
The Corporate Governance Committee is mandated to review the compensation of the directors on this basis annually.
2. Share Ownership by Directors
The Board has determined that it is appropriate to align the interests of the non-management directors with those of shareholders by requiring such directors to own and hold a minimum of 7500 Company shares. Such holdings are to be acquired within two years of the date of the Board's approval of these Corporate Governance Guidelines for existing directors, and within two years of the date of appointment for any subsequently appointed director. Such holdings can take the form of actual shares or equivalent units acquired under the Director's Deferred Share Unit Plan.
Board's Relationship With Management
1. Board Relationship with Management
The Board shall support and encourage the members of management in the performance of their duties. Management shall make appropriate use of the Board's skills before decisions are made on key issues.
2. Limits to Management Authority
The Board has established general authority guidelines that place limits on management's approval authority depending on the nature and size of the proposed transaction. These limits anticipate that some flexibility exists within approved budgets but that transactions outside defined limits require approval by the Board or an appropriate committee.
3. Evaluation of the Chief Executive Officer
The Human Resources and Compensation Committee shall conduct an annual review of the performance of the Chief Executive Officer against goals and objectives which have been established by the committee and shall review, assess and recommend the compensation of the Chief Executive Officer to the Board for approval by its independent members. The results of the review shall be communicated to the Chief Executive Officer by the Chair of the Board and the chair of the Human Resources and Compensation Committee.
4. Director Access to Management
All directors shall have open access to the Company's senior management for relevant information. Written communications from directors to members of management shall be copied to the Chief Executive Officer or, in the case of accounting and financial matters, to the Chief Executive Officer and the Chief Financial Officer. Individual directors are encouraged to make themselves available for consultations with management outside Board meetings in order to provide specific advice and counsel on subjects where such directors have special knowledge and experience.
Director Responsibilities And Performance
1. Director Responsibilities
Directors are expected to use their skill and experience to provide oversight to the business of the Company. Directors have a duty to act honestly and in good faith with a view to the best interests of the Company and to exercise the care, diligence and skill that a reasonably prudent person would in comparable circumstances.
Directors are expected to attend all Board and committee meetings in person. It is acceptable, on an infrequent basis, for directors to participate in such meetings by conference call if attendance in person is not possible. A director shall notify the Chair of the Board or committee or the Corporate Secretary if the director will not be able to attend or participate in a meeting.
Directors are expected to review and be familiar with Board and committee materials which have been provided in sufficient time for review prior to a meeting. Directors are to advise the Board or committee Chair of matters which they believe should be added to a meeting agenda.
2. Outside Advisors for Individual Directors
The Board has determined that any director who wishes to engage a non-management advisor to assist on matters involving the responsibilities as a director at the expense of the Company should review the request with, and obtain the authorization of, the Corporate Governance Committee.
3. Assessment of Board and Committee Performance
The Corporate Governance Committee is responsible for making an annual assessment of the overall performance and effectiveness of the Board and each committee and reporting on such assessments to the Board. The objective of the assessments is to ensure the continued effectiveness of the Board in the execution of its responsibilities and to contribute to a process of continuing improvement.
Ethics And Conflicts Of Interest
The Board expects directors as well as officers and employees, to act
ethically at all times and to acknowledge their adherence to the policies
comprising the Company's Code of Business Conduct and expects the Chief
Financial Officer and Chief Executive Officer to adhere to the Code of Business
Conduct. The Board shall not permit any waiver of any ethics policy with
respect to any director or executive officer.
In addition to the statutory responsibilities of directors to disclose all actual or potential conflicts of interest and generally to refrain from voting on matters in which the director has a conflict of interest, the director shall recuse himself or herself from any discussion or decision on any matter in which the director is precluded from voting as a result of a conflict of interest or which otherwise affects his or her personal, business or professional interests.
Dated December 2004