CHAPTER 03 Corporate Governance
Position Descriptions. The board should develop clear position descriptions for the chair of the board and the chair of each board committee. The board, together with the CEO, should develop a clear position description for the CEO. Role of the Board in the Issuer’s Integrity. The board should play an oversight role with respect to the ethical framework of the organization. The board should satisfy itself as to the integrity of the CEO and other senior officers as well as the culture of integrity they create throughout the organization. The board should approve a code of business conduct and ethics (and any amendments to the code). Any material departure from the code by a director or senior officer may need to be publicly disclosed. Board Effectiveness. There should be a comprehensive orientation program for new directors and ongoing education for all directors, as well as regular board, committee and director assessments. The board should play an oversight role with respect to the ethical framework of the organization. The board should satisfy itself as to the integrity of the CEO and other senior officers and the culture of integrity they create throughout the organization, and should approve a code of business conduct and ethics.
Currently, NP58-201 recommends best practices in the following areas: Board Independence. A majority of the board should be “independent.” Generally, independence means the absence of any direct or indirect material relationship between the director and the issuer – that is, a relationship that could, in the view of the issuer’s board, reasonably interfere with a member’s independent judgment. Certain relationships are deemed to be material for this purpose. NP58-201 recommends regular in camera meetings for the independent directors and the separation of the positions of chair (which should be held by an independent director) and CEO. If these positions are not separated, an independent lead director should be appointed with appropriate responsibilities. Role of the Board. The board should have a written mandate that includes specified responsibilities. These responsibilities relate to organizational integrity, strategic planning, risk identification and management, succession planning, communications, internal controls, management information systems and corporate governance.
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