We believe that sound corporate governance is essential to the well-being of our business and our ability to generate long-term sustainable returns. As such, we are committed to the highest standards of governance.
Our Board of Directors is composed of 12 Directors, including nine independent non-executive Directors. There are currently two women on the Board. The Board is supported by four Board committees: Audit, Compensation, Governance and Nominating, and Related Party and Conduct Review.
Responsibility for Corporate Social Responsibility (CSR) at the Board level is assigned to the Governance and Nominating Committee, whose responsibilities include:
Monitoring the implementation of the Corporation’s policies and strategy with respect to CSR;
Overseeing the Corporation’s approach to governance issues;
Recommending to the Board corporate governance practices consistent with the Corporation’s commitment to high standards of corporate governance;
Assessing the effectiveness of the Board of Directors, of Committees of the Board and of the Directors; and
Recommending to the Board candidates for election as Directors and for appointments to Board Committees.
Nomination and Assessment of the Board
The Governance and Nominating Committee of the Board is responsible for monitoring the composition of the Board and identifying potential board members taking into account a broad range of criteria. This includes skills and experience, independence, and diversity. In order to fulfill its responsibility, the Committee employs a skills matrix to assist with reviewing the skills and experience of director candidates and of the Board as a whole. The matrix includes industry-specific and business experience, as well as other areas of expertise, such as public sector and corporate social responsibility, in order to ensure that the Board includes members with a broad range of complementary qualifications, attributes, experience, knowledge and skills.
The Committee is also responsible for assessing the performance and effectiveness of the Board, Board Committees and individual Directors from time to time, with a view to ensuring that they are fulfilling their respective responsibilities and duties. An evaluation is conducted at least annually to assist in assessing the overall performance of the Board and the Board Committees. Although the scope and focus of such review may vary from year to year, the review includes a confidential Board effectiveness survey, which is administered by our external legal counsel. The survey solicits feedback from the Directors on matters including the operation of the Board and its Committees, the adherence by the Board and the Governance and Nominating Committee to the Diversity Policy in nominating individuals for election to the Board, the adequacy of information provided to the Directors, Board structure and agenda planning for Board and Board Committee meetings. The aggregated, anonymous survey results are reviewed by the Governance and Nominating Committee. The Chairman of the Committee reports the findings, including key recommendations, to the full Board for discussion.
CSR Strategy Execution
While the CEO plays an active role in reviewing and approving the CSR strategy, performance and reporting, formal responsibility for CSR has been delegated to the Vice-President and General Counsel, who is our CSR Lead.
The CSR Lead is responsible for executing our CSR strategy, engaging with stakeholders and providing performance reports to the Governance and Nominating Committee. Through the oversight of the CSR Lead, we also meet regularly with our group companies to align our commitments and share knowledge on CSR initiatives. A portion of the CSR Lead’s performance incentives are tied to the progress we are making in integrating CSR into all facets of our business, including environmental, social and governance factors.
Progress reports on our CSR initiatives are provided annually to the Governance and Nominating Committee, or more frequently if deemed material. In 2018, there were no CSR issues of concern to report to the Committee. For more information on the composition of the Board and its committees, please refer to the Governance section of our corporate website.
As an active owner of the companies in which we invest, we strive to ensure that our governance practices preserve and enhance shareholder value in a manner consistent with our responsible management philosophy.
By having our executives sit on the boards of our portfolio companies, we exercise active ownership through regular engagement with their senior management. This governance model, developed over a long period of time, allows us to ensure that our investments are being managed in a manner consistent with our responsible management philosophy and in line with our CSR Statement and our Code of Business Conduct and Ethics.
We view responsible management, and all that it entails, as an effective means to mitigate risk and as a catalyst for long-term value creation.
At the Power Financial level, the Board has the overall responsibility for monitoring the implementation and maintenance by management of appropriate policies and controls to manage risks. Each Committee of the Board also has general oversight responsibilities for risk management, focusing on the specific risks related to the Committee’s respective mandates. Responsibility for addressing risks related to CSR is assigned to the Governance and Nominating Committee of the Board. CSR risks and opportunities are reviewed annually by the Committee through the CSR updates provided by the Vice-President and General Counsel.
As a holding company, one of our main risks is associated with being a significant shareholder in our subsidiary operating companies. To mitigate these risks, officers of Power Financial sit on the boards and board committees of our subsidiaries, and therefore participate in the oversight function at these companies.
Our prudent risk culture is firmly embedded in the core competencies and responsibilities of our investment teams, which includes having in place processes to proactively identify, assess, and manage risks. These processes include the Corporation’s standard due diligence procedures, which enable us to take a precautionary approach to risk management.