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Corporate Governance

Corporate Governance Practices

  Guidelines Compliance Comments
1.
The Board should explicitly assume responsibility for the stewardship of the Corporation, and specifically for:
Yes
The Board of Directors, in consultation with management, is responsible for the stewardship of the Corporation, and generally directs the business and affairs of the Corporation. The Board of Directors has plenary authority, therefore, any responsibility that is not delegated to senior management or to Board committees remains with the Board of Directors.
(a)
Adoption of a strategic planning process;
Yes
The strategic planning process of the Corporation is principally the responsibility of management. The Board of Directors undertakes an annual and periodic reviews of the Corporation's strategic direction and fundamental objectives.
(b)
Identification of the principal risks of the Corporation's business and ensuring the implementation of appropriate systems to manage these risks;
Yes
Environmental and operational risks are presented to the Board of Directors as identified by management from time to time and as required.
(c)
Succession planning, including appointing, training and monitoring senior management;
Partial
The Board of Directors receives recommendations from the Chief Executive Officer with respect to the appointment of senior management. Professional development training for senior management is encouraged by the Board of Directors, but not required. Performance of senior management is monitored on an ongoing basis by the Board as well as the Compensation Committee of the Board. The nomination of new directors is addressed by the Board of Directors as a whole, on an as needed basis.
(d)
Communications policy for the Corporation; and
Partial
The Chief Executive Officer and the Chief Financial Officer generally handle shareholder communications. Members of management and/or directors may communicate with shareholders directly, with the consent of the Board or the Executive Committee.
(e)
Integrity of the Corporation's internal control and management systems.
Yes
Management develops internal control and management information systems for the Corporation. The Audit Committee reviews, with the assistance of external auditors, the Corporation's internal control and information systems.
2.
A majority of the directors should be "unrelated".
Yes
Four of the five directors of the Corporation are independent and unrelated. An "unrelated" director is a director who is independent from management and is free from any interest or any business 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 Corporation, other than interests and relationships arising from shareholdings. A ''related'' director is a director who is not an unrelated director.
3.
Disclose for each director whether he or she is related and how that conclusion was reached.
Yes
Richard McHardy, the Chief Executive Officer of the Corporation, is a related director. Michael Stark, Reginald Greenslade, Grant Greenslade and Donald Archibald are unrelated directors.
4.
Appoint a committee responsible for the appointment/assessment of directors and that is comprised exclusively of outside (i.e., non-management) directors, a majority of whom are unrelated directors.
Yes
The Corporate Governance Committee has the responsibility of assessing the effectiveness of the Board of Directors. Any director may propose new nominees to the Board of Directors. None of the three members of the Corporate Governance Committee is a related director.
5.
Implement a process for assessing the effectiveness of the Board of Directors as a whole, and its committees and individual Directors
Partial
The Corporation does not at this time have a formal process for assessing the effectiveness of the Board. The Board may determine, however, to independently assess its effectiveness from time to time based on the industry standards for corporate governance.
6.
Provide an orientation and education program for new directors.
Partial
Having regard to the size of the Corporation and the Corporation's resources, the Board of Directors was of the view that a formal orientation and education program for existing directors was impractical at this time.
7.
Consider the size of the Board of Directors, and the impact of the number on the Board's effectiveness.
Yes
The Board of Directors consists of five members. The Board of Directors has concluded that taking into account the respective skills of the directors, the proposed composition and number of directors is appropriate for the size and complexity of the Corporation.
8.
The Board of Directors should review the adequacy and form of compensation of the directors to ensure compensation realistically reflects responsibilities and risks involved.
Yes
The Compensation Committee, from time to time, reviews the adequacy and form of compensation of directors of the Corporation with a view to ensuring that compensation realistically reflects the responsibilities and risks involved. Compensation is in the form of wages, stock options and bonuses.
9.
Committees of the Board of Directors should generally be composed of outside directors, a majority of whom are unrelated, although some committees, such as the executive committee, may include one or more inside directors.
Partial
The Board of Directors has established four committees: the Audit Committee, the Compensation Committee, the Corporate Governance Committee, and the Reserves & Environment Committee. Both of the members of the Reserves committee are related directors.

Audit Committee
Michael Stark
Reginald Greenslade
Donald Archibald

Compensation Committee
Michael Stark
Reginald Greenslade
Donald Archibald

Corporate Governance
Committee
Reginald Greenslade
Grant Greenslade
Donald Archibald

Reserves & Environment Committee
Michael Stark
Reginald Greenslade
Grant Greenslade

10. The Board of Directors should expressly assume responsibility for, or assign to a committee of directors, the general responsibility for developing the Corporation's approach to governance issues.
Yes
The Corporate Governance Committee has the responsibility of developing the Corporation's approach to governance issues.
11. The Board of Directors should define limits to management's responsibilities by developing mandates for:
 
(a) The Board of Directors and the Chief Executive Officer of the Corporation; and
Yes
Formal mandates have been developed. There is a general understanding of the limits on management's responsibilities and authority.
(b) The corporate objectives for which the Chief Executive Officer is responsible.
Yes
The Board of Directors develops, with management, the corporate objectives which the Chief Executive Officer and senior management of the Corporation are responsible for achieving, and periodically reviews and assesses their performance on meeting those objectives.
12. Establish structures and procedures to enable the Board of Directors to function independently of management.
Yes
There is one management representative on the Board of Directors. The Board of Directors has established a Corporate Governance Committee for the purpose, in part, of administering the Board of Directors' relationship with management and ensuring that the Board of Directors functions independently of management.
13. Establish an audit committee with a specifically defined mandate and direct communication channels with internal and external auditors, with all members being independent directors. The audit committee's duties should include oversight responsibility for management reporting on internal control and should ensure that management has designed and implemented an effective system of internal control.
Yes
The Audit Committee has a mandate which it believes to be within the normal scope of the activities of audit committees, generally. The Audit Committee has direct access to the external auditors. The Corporation has no internal auditors. The Audit Committee reviews the scope and adequacy of management's system of internal control and assesses the adequacy and effectiveness of such internal control with the external auditors. The Audit Committee is comprised of three directors, all of whom are independent directors.
14. Implement a system to enable an independent director to engage outside advisors at the Corporation's expense. The engagement of the outside advisor is subject to the approval of the Management Committee.
Yes
The Board of Directors has established policies with respect to the ability of individual directors to engage advisors at the expense of the Corporation.


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