This Mandate of the Board of Directors (the “Board”) of Carmanah Technologies Corporation (“Carmanah” or the “Company”) outlines the responsibilities of the Company’s Board and identifies the personal and professional conduct expected of its directors.
GENERAL BOARD RESPONSIBILITIES
It is the responsibility of the Board to oversee the direction and management of the Company in accordance with the Company’s Articles, the Business Corporations Act (British Columbia) (the “BCBCA”), and the applicable requirements of such securities exchange or quotation system or regulatory agency as may from time to time apply to the Company, the rules and regulations of the Canadian provincial and federal securities regulatory authorities, in all cases as may be modified or supplemented (collectively referred to herein as the “Rules”), while adhering to the highest ethical standards. Specific tasks and actions of the Board in fulfilling these general responsibilities are as follows:
Strategic Planning & Budgets
- Meet at least annually to review the Company’s strategic business plan proposed by management, which takes into account, among other things, the opportunities and risks of the Company’s business, and includes a statement of the Company’s vision, mission and values, and to adopt such a plan with such changes as the Board deems appropriate.
- Review the Company’s corporate objectives, financial plans and budgets proposed by management and adopt the same with such changes as the Board deems appropriate.
- In connection with such reviews, the Board shall seek to provide a balance of long-term versus short-term orientation towards the Company’s vision, mission and values.
Review of Corporate Performance
- Review the Company’s performance against strategic plans, corporate objectives, financial plans and budgets.
Executive Officer(s) is defined as named executive officer(s) (“NEO”)” and individually or collectively includes the following individuals:
(a) the Company’s Chief Executive Officer (“CEO”);
(b) the Company’s Chief Financial Officer (“CFO”);
(c) each individual who directly reports to the CEO
(d) each individual who is disclosed as a NEO in the Company’s management information circular.
- Approve the hiring of NEOs.
- Evaluate the integrity of the Chief Executive Officer and other NEOs, and direct the CEO and other NEOs to promote a culture of integrity throughout the Company.
- Evaluate NEOs performance and replace NEOs where necessary.
- Consider succession planning and the appointment, training and monitoring of NEOs.
- Confirm with management that all NEOs have current employment, non-competition and confidentiality agreements.
- Review major Company organizational and staffing issues.
- Review annually the Company’s Corporate Disclosure Policy and evaluate Company compliance with the policy, including general communications with analysts, investors and other key stakeholders.
- Confirm with the Audit Committee that it has reviewed and discussed the adequacy of the Company’s internal financial reporting controls and management information systems.
- Review, adopt and confirm distribution to appropriate personnel of the Company’s Code of Business Conduct and other governing policies, as applicable. Review and evaluate, as deemed necessary, whether the Company and its NEOs conduct themselves in an ethical manner and in compliance with the applicable Rules, audit and accounting principles and the Company’s own governing policies.
- Provide for free and full access by the Board to all management regarding all matters of compliance and performance.
- Review and approve any material transactions outside of the Company budget.
BOARD STRUCTURE AND FUNCTION
Composition of the Board of Directors and Independence
- Ensure that the majority of Board is independent pursuant to the Rules.
Annual Disclosure of Director Independence
- Publicly disclose in the Company’s annual management information circular or other regulatory filing conclusions as to the independence of the Board as required by the Rules.
Meetings of Independent Directors
- Ensure that independent Board members (as determined under the Rules) have regularly scheduled meetings at which only independent directors are present.
- Undertake an annual assessment of the performance of the Board, including Board committees.
Outside Advisors for Directors
- Ensure that the Board and each committee of the Board are permitted to engage outside advisors at the Company’s expense as they deem appropriate.
- Ensure, as deemed appropriate, that there is a succession plan for Board members.
Compensation of Directors
- Annually review and approve the compensation to be paid to directors as recommended by the Compensation Committee.
Review of Board Materials, Attendance at Meetings, etc.
- Advise Board members to review available Board meeting materials in advance, attend an appropriate number of Board meetings and committee meetings, as applicable, and devote the necessary time and attention to effectively carry out the Board’s responsibilities.
Perform other Functions Prescribed by the Articles, the BCBCA, and the Rules
- Perform such other functions as prescribed by the Company’s Articles, the BCBCA, and the Rules.
- Delegate general responsibility to the Audit Committee those matters outlined in the Charter of the Audit Committee, which may include, among other things:
- overseeing and evaluating the performance, and assessing the qualifications, of the Company’s independent auditors and recommending to the Board the nomination and if applicable, the replacement of, and compensation to be paid to, the independent auditors for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services;
- subject to the appointment of the independent auditors by the Company’s shareholders, determining and approving the engagement of, prior to the commencement of such engagement, and compensation to be paid to, the independent auditors to perform all proposed audit, review or attest services;
- determining and approving the engagement of, prior to the commencement of such engagement, and compensation to be paid to, the independent auditors to perform any proposed permissible non-audit services;
- reviewing the Company’s financial statements and management’s discussion and analysis of financial condition and results of operations and recommending to the Board whether or not such financial statements and management’s discussion and analysis of financial condition and results of operations should be approved by the Board;
- reviewing and discussing with management, the Board and the independent auditors, as appropriate, the Company’s guidelines and policies with respect to risk assessment and risk management and any certain and specific risks to the Company, and ensuring the implementation of appropriate systems to manage such risks, and the Audit Committee shall have the authority to delegate such responsibilities to another committee of the Board
- conferring with the independent auditors and with management regarding the scope, adequacy and effectiveness of internal financial reporting controls in effect;
- establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by the Company’s employees of concerns regarding questionable accounting or auditing matters, and reviewing such procedures annually;
- reviewing and discussing with the independent auditors and management any legal matters, tax assessments, and any other matters which raise material issues regarding the Company’s financial statements or accounting policies and the manner in which these matters have been disclosed in the Company’s public filings;
- all as more specifically set out in the Charter of the Audit Committee.
- Appoint Board members to fill any vacancy in the Audit Committee.
- Ensure that all members of the Audit Committee are:
- independent under the Rules;
- financially literate such that he or she has 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 reasonably be expected to be raised by the Company’s financial statements; and
- compliant with any other requirements under the Rules.
- Promote that, whenever possible, the Audit Committee have one member who is an audit committee financial expert as is currently defined under the Rules.
Review annually the Charter of the Audit Committee and suggest changes to its charter as the committee deems appropriate for consideration by the Board.
- Delegate general responsibility to the Compensation Committee those matters outlined in the Charter of the Compensation Committee, which may include, among other things:
- reviewing and recommending to the Board the salary, bonus, equity compensation and any other compensation and terms of employment of the Company’s CEO, with consideration given to the corporate goals and objectives of the Company relevant thereto;
- reviewing and recommending to the Board the salary levels, bonus plans and structures and payments thereunder and other forms of compensation policies, plans and programs for other NEOs of the Company;
- reviewing and recommending to the Board the Company’s overall compensation plans and structure, including without limitation incentive-compensation and equity-based plans;
- reviewing and recommending to the Board the compensation to the paid to independent Board members, including any retainer, Committee and Committee chair fees and/or equity compensation;
- overseeing an evaluation of management succession planning;
- all as more specifically set out in the Charter of the Compensation Committee.
- Appoint Board members to fill any vacancy in the Compensation Committee.
- Ensure that all members of the Compensation Committee are independent under the Rules.
- Review annually the Charter of the Compensation Committee and suggest changes to its charter as the committee deems appropriate for consideration by the Board.
- Perform such functions to ensure adherence of corporate governance, which may include, among other things:
- Annually review, discuss and assess the performance of the Board, including Board committees, seeking input from senior management, the full Board and others. The assessment shall include an evaluation: of the Board’s contribution as a whole and effectiveness in serving the best interests of the Company and its shareholders; specific areas in which the Board and/or management believe contributions could be improved; the appropriate size of the Board, with a view to facilitating effective decision making; and overall Board composition and makeup, including any applicable residency requirements.
- Ensure that all new Board members receive a comprehensive orientation and that all new Board members fully understand the nature and operation of the Company’s business, the role of the Board and its committees, and the contribution that each Board member is expected to make, including the commitment of time and resources.
- Provide continuing education opportunities for all Board members so that Board members may maintain or enhance their skills and abilities as directors, and may ensure their knowledge and understanding of the Company’s business remains current. The Committee shall have the authority to institute a plan or program for the continuing education of directors.
- Oversee and review the processes and procedures used by the Company to provide information to the Board and its committees. The Board should consider, among other factors, the reporting channels through which the Board and its committees receive information and the level of access to outside advisors where necessary or appropriate, as well as the procedures for providing accurate, relevant and appropriately detailed information to the Board and its committees on a timely basis.
Amendments to this Mandate of the Board of Directors
- Annually review this Mandate and propose amendments to be ratified by the Board.
Personal and Professional Characteristics of Board Members
The following characteristics and traits outline the framework for the recruitment and selection of Board nominees:
Leadership and Experience
- Nominees must demonstrate exceptional leadership traits and a high level of achievement in their personal and professional lives that reflects high standards of personal and professional conduct.
- Nominees must demonstrate their capacity to contribute the requisite skills, resources and time necessary to effectively fulfil their duties as a Board member.
Conduct and Accountability
- Nominees must demonstrate the highest ethical standards and conduct in their personal and professional lives, and make and be accountable for their decisions in their capacity as Board members.
Nominees must demonstrate a capacity to provide sound advice on a broad range of industry and community issues.
- Nominees must have or develop a broad knowledge base of the Company’s industry in order to understand the basis from which corporate strategies are developed and business plans produced.
- Nominees must be able to provide a mature and useful perspective as to the business plan, strategy, risks and objectives of the Company.
- Nominees must demonstrate that they will put Board and Company performance ahead of individual achievements.
- Nominees must demonstrate a willingness to listen as well as to communicate their opinions openly and in a respectful manner.
Effective March 2013