Corporate Governance

Nomination and Assessment of Directors

The Board has established a Governance and Nominating Committee which has a number of responsibilities relating to governance and the nomination of candidates for election as Directors. The Committee is responsible for identifying new candidates for Board nomination and for recommending to the Board those candidates who possess the qualifications, skills, business and financial experience, leadership roles and level of commitment required of a Director to fulfill Board responsibilities.

The Committee is also responsible for overseeing the Corporation’s approach to governance issues. In doing so, it reviews, on a regular basis, a number of matters relating to the effective functioning of the Board of Directors.  As a part of this process, the Committee has recently considered the size and composition of the current Board, and has concluded that it would be appropriate to invite a number of the longer-serving Directors to not stand for re-election at the Meeting. These directors are: Mr. J. Brian Aune, The Right Honourable Donald F. Mazankowski and Mr. Jerry E.A. Nickerson.

In order to ensure that the Board has a significant representation of Directors who are independent, in the Board’s view and within the meaning of the Instruments, Messrs. Raymond L. McFeetors, Michel Plessis-Bélair, Henri‑Paul Rousseau and Amaury de Seze will not stand for re-election as a Director. These seven Directors have made a very substantial contribution to the business and affairs of the Corporation during their service as a Director.  The Committee’s recommendation was discussed individually with each of these Directors, and each agreed that it was appropriate that he not stand for re-election at the Meeting.

The result of this recommendation is that the candidates proposed for election to the Board at the Meeting will consist of 13 Directors, of whom eight, constituting a majority, will be independent in the Board’s view and within the meaning of the Instruments as disclosed above under “Assessment of Independence.”  Each of these candidates has the qualifications and experience necessary and appropriate to fulfill Board responsibilities. The Committee recognizes that each Director will contribute differently to the Board and will each bring particular strengths in different areas of qualification. After considering the qualifications that the continuing existing Directors possess, the Committee has recommended that the 13 individuals set out under “Nominees for Election to the Board” in the 2012 Management Proxy Circular be nominated for election as Directors of the Corporation at the Meeting.

The Committee and the Board are mindful of the importance of having a Board with a balance of competencies, skills and experience, as well as geographic diversity. The Committee and the Board believe that these factors and continuity of membership are critical to the Board’s efficient operation.

The Corporation has adopted a form of proxy which gives shareholders the ability to vote for or withhold from voting for each individual Director proposed for election to the Board of Directors of the Corporation.

The Committee is also responsible for assessing the effectiveness and contribution of the Board, of Board Committees, and of individual Directors from time to time. The Board assesses its effectiveness at least annually at a meeting without members of management present.

The Board believes that it is normal and appropriate, especially in the case of a holding company with a controlling shareholder, like the Corporation, to have Directors who are related to the controlling shareholder (in this case, the Honourable Paul Desmarais, Paul Desmarais, Jr. and André Desmarais) as members of the Governance and Nominating Committee, as well as Directors who are independent and not related to the controlling shareholder.

(Source: March 2012 Management Proxy Circular)