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 14 Directors, including 13 non-executive Directors. The number of women elected to the Board at the 2022 Annual Meeting of Shareholders has increased to four, representing 29 per cent of the Board. The Board is supported by four Board committees: Audit, Human Resources, Governance and Nominating, and Related Party and Conduct Review.
Responsibility for sustainability matters and ESG considerations at the Board level is assigned to the Governance and Nominating Committee, whose responsibilities include:
Recommending to the Board corporate governance practices consistent with the Corporation’s commitment to high standards of corporate governance;
Addressing potential risk related to governance matters;
Monitoring the implementation of the Corporation’s policy and strategy with respect to CSR, which includes ESG matters;
Overseeing the Corporation’s approach to corporate governance issues;
Assessing the structure, composition, effectiveness and contribution of the Board of Directors, of all 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 identifying new candidates for Board nomination and, after considering the objectives of the Corporation’s Diversity Policy, for recommending to the Board those candidates who possess the qualifications, competencies, skills, business and financial experience, leadership roles, level of commitment and available time required of a Director to fulfill Board responsibilities. 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 outlines a complement of diverse qualifications, attributes, skills and experience that are viewed as being relevant to the proper functioning of the Board.
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. While this evaluation is usually administered by the Corporation’s external legal counsel, in early 2022, the Board engaged an independent consultant to conduct an assessment of the effectiveness and performance of the Board and its standing committees. The independent consultant presented its findings to the Board and the Governance and Nominating Committee, who will monitor and periodically update the Board on these findings. The Board currently plans on engaging an independent consultant to conduct this assessment every few years, and otherwise having the Corporation’s external legal counsel conduct a confidential Board effectiveness survey annually. Please refer to our Governance section of our corporate website for more information.
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. With 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 2021, 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 Corporation level, the Board of Directors and executive officers of the Corporation have overall oversight and responsibility for risk management associated with the investment activities and operations of the holding company and maintain a comprehensive and appropriate set of policies and controls. 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, including ESG risks and opportunities, 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 Corporation 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.
We invite you to read more about our risk management approach by consulting the Risk Management section of our most recent Annual Report.