In making its recommendations, the Committee must consider the needs of the Corporation in terms of skills, experience and knowledge, considering the mission, strategies and objectives of the Board.
In carrying out its functions, the Committee maintains an effective working relationship with the Board, management and the other committees of the Board.
- Carry out the activities that are consistent with its mandate.
- Retain the services of consultants, namely independent consultants, if it deems it necessary to fulfill its functions, and approve their compensation.
- Ensure that executive officers attend the Committee’s meetings, if needed.
- Request and obtain access to the executive officers, employees and relevant information.
- Review the salary and compensation policies of the Corporation and make recommendations to the Board related to the adoption of these policies and any amendment thereof deemed necessary or mandatory pursuant to a new law or regulation.
- Review, evaluate, and, if necessary, revise the stock option plan of the Corporation and make recommendations to the Board regarding the amendments deemed necessary.
- The Board appoints the members of the Committee and the president of the Committee. In the absence of the president, a member of the Committee may replace him, provided that the quorum is maintained.
- The Committee is composed of 3 members. The members must be in majority independent directors. Members of the Committee may be removed or replaced at any time by the Board. From the moment they no longer occupy the position of director, they cease to be members of the Committee.
- Members of the Committee must attend all meetings of the Committee, unless they have a serious reason. During these meetings, a quorum is reached if a majority of the members are present by telephone or in person.
- Each member of the Committee must have the skills and experience commensurate with carrying out the functions and responsibilities associated with his or her position.
- Members of the Committee are appointed for a term of one year.
- The secretary of the Committee is the secretary of the meeting or any other person whom the Board appoints.
- The Committee invites the president and chief executive officer and, if necessary, any other person, except during private meetings to which only members of the Committee may attend. The president of the Committee has the right to decide who should and should not be present at any time during a meeting of the Committee.
- The notice of the dates, time and location of the meetings is given verbally, in writing, by fax or by any other electronic means to each member of the Committee at least 48 hours before the time set for the meeting. Any member can, in any manner whatsoever, waive receipt of a notice of meeting of the Committee. The presence of a member at a meeting of the Committee constitutes a waiver of notice.
- Meetings are held, as necessary, following notice by the president of the Committee.
- Special meetings may be called by the president of the Committee.
- The secretary of the Committee must communicate the agenda and the supporting documents to the members of the Committee early enough before the meeting. The secretary and the president of the meeting may be the same person.
- The secretary of the Committee must communicate the minutes of the meetings to the members of the Board after approval of such minutes by the president of the Committee. The minutes of a meeting of the Committee must be adopted by all members of the Committee.
- The president of the Committee (or another member of the Committee) must at least be present at the meeting of the Board during which a report of the Committee is presented.
- The Committee may convene a meeting with outside legal counsels if it deems it necessary.
- The Committee meets at least once during the year.
- Roles and responsibilities
The Committee must do the following:
- Review the compensation policies of the Corporation, including employment, compensation, training and development.
- Review and approve the goals and objectives of the Corporation relevant to the compensation of the president and chief executive officer, evaluate the performance of the president and chief executive officer in light of these goals and objectives, present the results of this evaluation to the Board and establish the compensation level of the president and chief executive officer based on this evaluation.
- Recommend the hiring and termination, as well as the promotion and compensation, of the executive officers reporting directly to the president and chief executive officer, and the appointment of all executive officers for which the Committee must present recommendations to the Board for approval.
- Review the human resources and the succession planning of the president and chief executive officer.
- Supervise the compliance by the Corporation of the laws and regulations related to compensation matters.
- Approve, if necessary, and if required by the applicable rules and regulations of any security regulatory body or stock exchange, a report with respect to the compensation of executive officers, for inclusion in the management proxy circular of the Corporation or in another public disclosure document.
- Review and recommend to the Board the granting of options under any option plan or long-term incentive plan.
- Proceed to a review of all aspects of the compensation received by the members of the Board.
Structure of the Board and committees and appointments
- Recommend the formation or dissolution of committees of the Board.
- Recommend the appointment of members of the Board, members of the committees and presidents of the committees.
- Recommend candidates to fill vacancies on the Board, committees and committees’ presidencies.
- Recommend candidates for appointment as chairman of the Board.
- Maintain a current succession plan for the members of the Board, taking into consideration the desired composition of the Board, the strengths, aptitudes and experience of the current directors, the expected dates of retirement, the strategic direction of the organization and the need for strong independent representation for the financial markets.
- Develop and keep current a process and criteria for identifying, recruiting and appointing new directors.
- Recommend to the Board any candidates for election to the Board at the annual meeting of shareholders.
- Advise the Board when a question of conflicts or potential conflicts is raised.
- Establish a process for reviewing and monitoring the effectiveness of the Board overall and of each member of the Board and present recommendations to the Board to improve the development of governance.
- Perform an annual review of the procedures of the Board and recommend changes to the Board if needed. In particular, this includes a review of the following:
- the procedures for the strategic orientation of the Board;
- the procedures for monitoring the performance of the Board
- the relevant number, and duration, of meetings of the Board; and
- the suitability of the information provided to directors before and during meetings of the Board.
- Ensure that all directors receive the orientation and continuous training necessary to effectively fulfill their responsibilities, particularly in order to inform them of new legal and financial matters as well as changes in the industry’s practice and commercial practices.
- Review and evaluate all matters that may have an effect on the Corporation with respect to governance.
- Recommend to the Board the measures to be taken with respect to governance.
- Monitor the implementation and the administration of these measures or of any policies or guidelines adopted by the regulatory authorities or by the Board with respect to governance.
- Review and recommend the disclosure of annual regulatory information regarding the governance practices of the Corporation, if needed.
- Insofar as significant deviations from the guidelines concerning the conflicts of interest for the directors are communicated to the Committee, report to the Board any significant deviation from those guidelines with respect to conflicts of interest for directors, executive officers, employees and consultants.
- At the request of the Board, review the mandate, functions and responsibilities of: (i) the Board and its members; (ii) the chairman of the Board; (iii) the committees of the Board and their members; (iv) the presidents of the committees of the Board; and (v) the president and chief executive officer, and recommend any desirable change.
- Review and evaluate all aspects of corporate social accountability and environmental matters that may affect the Corporation, including any policy of the Corporation, namely with respect to sustainable development.
- Recommend to the Board the measures to be taken with respect to environment.
- Monitor the implementation and administration of these measures or of any policies or guidelines adopted by the regulatory authorities or by the Board with respect to environment.
- Review and recommend the disclosure of annual regulatory information regarding the practices of the Corporation with respect to environment, if needed.
- Review and evaluate all aspects of health/safety related to the activities of the Corporation, including any policy of the Corporation.
- Recommend to the Board the measures to be taken with respect to health/safety.
- Monitor the implementation and administration of these measures or of any policies or guidelines adopted by the regulatory authorities or by the Board with respect to health/safety.
- Review and recommend the disclosure of annual regulatory information regarding the practices of the Corporation with respect to health/safety, if needed.
- Evaluate annually the performance of the Committee in light of its mandate, both with respect to the contribution of each of the members and of the Committee overall, and report to the Board on the conclusions of such evaluation.
- At each of the meetings, report to the Board on the activities of the Committee and make appropriate recommendations.
- Ensure that the Board is aware of matters that could have a significant impact on the business of the Corporation.
Review of the Mandate of the Committee
- Observe the quality of relationships between management and the Board and recommend improvements deemed necessary or desirable.
- In general, discuss recommendations with the president and chief executive officer before presenting them to the Board.
- After consulting the chairman of the Board, consider and approve, in advance and if considered appropriate, the reasonable requests of directors to use outside consultants.
- Carry out the annual review of the civil liability insurance of the directors and officers.
- Exercise the other powers and assume the other obligations and responsibilities that result from the powers, functions, and responsibilities of the Committee specified herein or that may be delegated by the Board.
No modification of the roles and responsibilities of the Committee may take effect without the approval of the Board.
Duties and responsibilities
4.1 Financial Statements and Disclosure Matters
- review the Corporation’s financial statements, MD&A and any press releases regarding annual and interim earnings, before the Corporation publicly discloses such information, and any reports or other financial information which are submitted to any governmental body or to the public;
- be satisfied that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation’s financial statements, other than the public disclosure referred to in paragraph 4.1 (a) and periodically assess the adequacy of those procedures.
4.2 External Auditor
- recommend to the Board the selection and, where applicable, the replacement of the external auditor to be nominated annually by the shareholders of the Corporation and recommend to the Board the compensation of such external auditor;
- oversee directly the work of the external auditor, which is the representative of the shareholders of the Corporation towards the Board and the Committee and review annually its performance and independence;
- settle any disagreement between management and the external auditor regarding financial reporting;
- on an annual basis, review and discuss with the external auditor all significant relationships it may have with the Corporation that may impact its objectivity and independence;
- consult with the external auditor about the quality of the Corporation’s accounting principles, internal controls and the completeness and accuracy of the Corporation’s financial statements;
- review and approve the Corporation’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditor of the Corporation;
- review the audit plan for the year-end financial statements and intended template for such statements;
- review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, as well as any non-audit services provided by the external auditor to the Corporation or its subsidiaries. The pre-approval requirement is satisfied by the Committee with respect to the provision of non-audit services if:
- the aggregate amount of all the non-audit services that have not been pre-approved does not constitute more than 5% of the total amount of fees paid by the Corporation and its subsidiaries to its external auditor during the fiscal year in which the services are provided;
- such services were not recognized by the Corporation or its subsidiaries as non-audit services at the time of the engagement; and
- such services are promptly brought to the attention of the Committee and approved, prior to the completion of the audit, by the Committee or by one or more of its members to whom authority to grant such approvals has been delegated by the Committee.
The Committee may delegate to one or more independent members of the Committee the aforementioned authority to pre approve non-audit services, provided the pre-approval of the non-audit services is presented to the Committee at its first scheduled meeting following such approval.
4.3 Financial Reporting Process
- in consultation with the external auditor, review with management the integrity of the Corporation’s financial reporting process, both internal and external;
- consider the external auditor’s judgment about the quality and appropriateness of the Corporation’s accounting principles as applied in its financial reporting;
- consider and approve, if appropriate, changes to the Corporation’s auditing and accounting principles and practices as suggested by the external auditor and management;
- review any significant disagreement among management and the external auditor in connection with the preparation of the financial statements;
- review with the external auditor and management the extent to which changes and improvements in financial or accounting practices have been implemented;
- establish procedures for the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters and the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters.
The members of the Committee shall be financially literate or have financial management expertise. A person who is not financially literate may however be appointed as a member of the Committee provided that it becomes financially literate within a reasonable period of time following its appointment.
For the purposes of this Charter, the definition of “financially literate” is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Corporation’s financial statements.
The members of the Committee shall be elected by the Board at its first meeting following each annual shareholder’s meeting. Unless a Chairman is elected by the Board, the members of the Committee may designate a Chairman by a majority vote of all the Committee members.
Mandate and objectives
The objectives of the Committee are to:
(i) serve as an independent and objective party to monitor the Corporation’s financial reporting and internal control system and review the Corporation’s financial statements;
(ii) ensure the independence of the Corporation’s external auditor; and
(iii) provide better communication among the Corporation’s auditor, the management and the Board.
Meetings and procedures
At all meetings of the Committee, every question shall be decided by a majority of the votes cast. In the case of an equality of votes, the Chairman shall not be entitled to a second vote.
A quorum for meetings of the Committee shall be a majority of its members and the rules for calling, holding, conducting and adjourning meetings of the Committee shall be the same as those governing meetings of the Board.