Corporate Governance
Independence of Members of Board
The Company’s board of directors currently consists of six directors. Four of the directors, Brian Stkins, Dave Nickerson, John MacPherson and Alan Savage, being a majority, are considered independent of management and of any significant shareholder and are considered competent to exercise independent judgment in carrying out their responsibilities as directors. None of these have any direct or indirect material relationship with the Company or have any relationship pursuant to which they may accept directly or indirectly any consulting, advisory or other compensatory fees, other than as remuneration for acting in his capacity as a member of the Board of Directors or any committee thereof. John MacPherson served as Chairman of the Company prior to July 2003 and prior to that time was also an employee of the Company. In the view of the Company’s Board of Directors, the above described relationship, which has terminated, does not reasonably interfere with the exercise of independent judgment by Mr. MacPherson.
The Chairman of the Board, John F. Kearney, is not independent in that he is also President and Chief Executive Officer of the Company. Alan B. Taylor is not independent as he is the Vice-President Exploration and Chief Operating Officer of the Company.
In June 2007, the Board appointed Alan Savage as lead director. The Chairman of each of the Audit Committee and the Compensation Committee is an independent director, who provides leadership to those committees, and the Chairman of the Board does not sit on either committee.
Supervision by the Board
The Chief Executive Officer and Chief Operating Officer report upon the operations of the Company directly to the Board on a regular basis. The independent directors are able to meet at any time they consider necessary without any members of management, including non-independent directors, being present. The Audit Committee is composed of independent directors who meet with the Company’s auditors without management in attendance. The independent directors have regular and full access to management and are able to meet at any time without the non-independent directors being present if considered necessary or desirable.
Participation of Directors in Other Reporting Issuers
The participation of the Directors in other reporting issuers is described in the following table:
| Name of Director | Name of Other Reporting Issuer |
John F. Kearney |
Anglesey Mining PLC Avnel Gold Mining Limited Conquest Resources Limited Labrador Iron Mines Holdings Limited Minco PLC Scandinavian Minerals Limited Sulliden |
John MacPherson |
Tower Energy Inc. (to April 2008) |
Dave Nickerson |
Tyhee Development Corp. |
Alan C. Savage |
Selkirk Metals Corp Copper Ridge Exploration Ltd. Hi Ho Silver Resources Inc. Inflazyme Pharmaceuticals Ltd. |
Alan Taylor |
Cronus Resources Ltd . |
Participation of Directors in Board Meetings
In the year ended December 31, 2007, nine board meetings were held. The attendance record of each director for the board meetins held is as follows:
Name of Director |
Number of Board Meetings |
|---|---|
Brian Atkins |
N/A |
John F. Kearney |
9 |
John A. MacPherson |
9 |
Dave Nickerson |
9 |
Alan C. Savage |
9 |
Alan B. Taylor |
9 |
Board Mandate
The Board does not have a written mandate. The mandate of the Board is to supervise the management of the business and affairs of the Company. As part of its overall stewardship the Board of Directors assumes responsibility for strategic planning, identification of the principal risks associated with the Company’s business and ensuring appropriate management of these risks and making all senior officer appointments, including responsibility for evaluating performance, management development and succession planning.
Position Descriptions
The Board has not developed written position descriptions for the Chair of the Board or the Chairs of each of the Committees. The Board is of the view that the role and responsibilities of the Chair and of the Chairs of the respective Committees are sufficiently specific that no separate written position descriptions would be helpful.
The Company does not have an employment contract, or a written position description, in place with its President and Chief Executive Officer. The Chief Executive Officer is responsible for the day to day operations of the Company and reports directly to the Board of Directors on a regular basis. The Board responds to, and if it considers appropriate, approves with such revisions as it may require, recommendations which have been brought forward by the Chief Executive Officer. In addition to those matters which by law must be approved by the Board, all significant activities and actions proposed to be taken by the Company including in particular: capital budgets; financing; property acquisitions or dispositions; senior appointments and compensation are subject to approval by the Board of Directors.
Orientation and Continuing Education
The Company does not have a formal orientation or education program for directors. New Board members are provided with information respecting the functioning of the Board of Directors and its Committees. In addition, new directors receive copies of Board materials, corporate policies and procedures, and other information regarding the business and operations of the Company. Board members are expected to keep themselves current with industry trends and developments and are encouraged to communicate with management and, where applicable, auditors and technical consultants of the Company, and visit the Company’s offices on a regular basis. Board members have access to legal counsel to the Company in the event of any questions or matters relating to the Board members’ corporate and director responsibilities and to keep themselves current with changes in legislation. Board members have full access to the Company’s records and general industry information and material of interest is circulated to directors on a regular basis.
Ethical Business Conduct
The Board assumes responsibility for the Company’s approach to corporate governance matters. The Board views good corporate governance and ethical business conduct as an integral and essential component to the supervision and management of the Company and to meet responsibilities to shareholders, employees and other stakeholders. The Board has adopted a written code for directors, officers and employees (Code of Ethics). The Board conducts periodic reviews of the Company’s corporate governance practices and procedures in the light of applicable rules and guidelines and the current status and stage of development of the Company.
Directors are expected to adhere to all corporate law requirements in respect of any transaction or agreement in which they may have a material interest. It is a requirement of applicable corporate law that directors who have an interest in a transaction or agreement with the Company promptly disclose that interest at any meeting of the Board at which the transaction or agreement will be discussed and abstain from discussions and voting in respect to same if the interest is material. Where appropriate any director having a material conflict of interest will be expected to withdraw from the meeting and not participate in the meeting where such matter is being considered so that the remaining directors may properly exercise independent judgment.
Nomination of Directors
The Board has not appointed an independent Nominating Committee. Nominations, if and when they arise, are generally the result of formal or informal discussions with members of the Board or recommendations by members of the Board. Nominations to the Board are determined, after appropriate review and investigation, by the Board of Directors as a whole.
Compensation
The Board has appointed a Compensation Committee which has responsibility for determining compensation for the directors and senior management.
The Compensation Committee is comprised of John MacPherson and Alan Savage. All members of the Compensation Committee are considered independent. In June 2007, the Board appointed Mr. Alan Savage as lead Director. As lead director, Mr. Savage chairs the Compensation Committee. The Committee makes recommendations to the Board with regard to the compensation of the Company’s directors. The Committee makes recommendations to the Board with respect to the compensation of the President and Chief Executive Officer. The Compensation Committee meets as requested by the Board or the Chief Executive Officer, or as considered desirable by the Committee. The Compensation Committee has the authority to retain independent advisors as it may deem necessary or appropriate to allow it to discharge its responsibilities. The Compensation Committee has not retained a compensation consultant or advisor since the beginning of the 2006 financial year.
Health and Safety Committee
In June 2007, the Board appointed a Health and Safety Committee which is responsible to assist the Board in it oversight of health and safety matters, including the implementation and management of policies and procedures relating to health and safety matters at Prairie Creek. The Committee is comprised of Dave Nickerson, Alan Taylor and the Prairie Creek Site Manager.
Other Committees
The Board does not have any standing committees other than the Audit Committee, Compensation Committee and the Health and Safety Committee.
Assessment
The Board of Directors continuously reviews on an ongoing informal basis the effectiveness of the Board as a whole and the effectiveness, contribution and performance of the Board, its committees and individual directors. Each year, when it determines the number of directors to be elected at the annual meeting of shareholders, the Board considers its appropriate size and composition to properly administer the affairs of the Company and to effectively carry out the duties of the Board, given the Company’s current status and stage of development.
Audit Committee Disclosure
The Company's audit committee is governed by a written charter that sets out its mandate and responsibilities. A copy of this charter and the disclosure on the Audit Committee required by National Instrument 52-110 is contained under the heading "Audit Committee Information" in the Company's Annual Information Form.
Code of Ethics
Insider Trading Policy
Management Contracts
Except as otherwise disclosed herein, no management functions of the Company are performed to any substantial degree by a person other than the directors or executive officers of the Company.
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