TELESTA THERAPEUTICS INC. BOARD MANDATE AND GOVERNANCE GUIDELINES

Transcription

1 TELESTA THERAPEUTICS INC. Effective September 23, 2014 Revised Date: January 23, 2015 Please take that the masculine gender is used in this document without any discrimination and only to lighten the text

2 1. Board Mandate The mandate of the Board of Directors (the Board ) is to enhance long-term value for Shareholders. Its role shall be of a supervisory nature and, in the discharge of its mandate, it shall assume responsibility for broad corporate policies and for the overall effective and ethical performance of the Company through the oversight of the Executive team. The Executive team shall be responsible for the day-to-day operations of the Company, for properly informing the Board of the status of operations, for taking the lead in developing operating and strategic plans, and for identifying and managing the risks inherent therein. Any responsibility not delegated to the Executive team or a Committee of the Board remains with the Board. The Board will review, and may periodically modify, this document as appropriate to reflect the evolution of its governance practices. The Board will, directly or through its Committees, assume specific responsibility for the following functions: (a) Strategic Planning The Board will annually review, question and qualify strategies proposed by Executives. The Executive team s responsibility is to develop corporate strategic plans which will take into account the opportunities and risks of the business, and to implement such plans once Board review is complete. The Board will monitor corporate performance against strategic and business plans, including assessing operating results on behalf of Shareholders to evaluate whether the business is being properly managed. (b) Risk Assessment The Board will have overall responsibility for assessing the principal risks facing the Company's business, reviewing options for their mitigation and overseeing the implementation of appropriate systems to manage such risks. (c) Succession Planning The Board will select and oversee a well-qualified Chief Executive Officer and approve and maintain a succession plan for the Chief Executive Officer and Senior Executives, based upon recommendations from the Compensation Committee. 1

3 (d) Communications Policy The Board will approve the Company's policies and practices with respect to disclosure of financial and other information consistent with disclosure requirements under applicable securities law. (e) Accounting and Financial Reporting Systems, Internal Controls and Disclosure Controls and Procedures The Board will oversee the quality and integrity of the Company's accounting and financial reporting systems, internal controls, and disclosure controls and procedures to assure the results that the controls are designed to achieve. (f) Environment, Health and Safety The Board will approve policies proposed by the Executive team in respect of environmental, health and safety issues and review regular Executive team reports on the operation of the Company's environmental and occupational health and safety management systems. GOVERNANCE GUIDELINES 2. The Chairman ( Chair ) of the Board The Chair will be an Independent Director. Independence and Qualification of Directors The Company s goal is to ensure that a majority of the Board is composed of Directors who have no material relationship with the Company and who, in the reasonable opinion of the Board, must be unrelated and independent under the laws, regulations and listing requirements to which the Company is subject. If the Executive team or other Directors become aware of a relationship that may compromise the independency of a Director, the concern will be raised with the Corporate Governance and Nominating Committee. The Committee will evaluate the situation and make its recommendation to the Board. The Corporate Governance and Nominating Committee will be asked to evaluate each Director s independence annually. The Board will monitor the mix of skills and experience of its Directors in order to assure that it has the necessary tools to perform its oversight function effectively. When a Director's principal business association changes significantly, the Director will advise the Corporate Governance and Nominating Committee, which shall consider the continued appropriateness of that Director for Board service and make its recommendation to the Board. 2

4 3. Board Meetings TELESTA THERAPEUTICS INC. Directors are expected to attend all Board meetings and meetings of Committees on which they serve. Directors are also expected to spend the time needed to prepare and review materials and meet as frequently as necessary to properly discharge their responsibilities. Materials that are important to the Board's understanding of the business to be conducted at a meeting shall be distributed in ample time for review beforehand. The Chair, with the Chief Executive Officer and/or Corporate Secretary, will establish the agenda for each Board meeting. Directors shall be free to suggest items for inclusion on the agenda or to raise subjects that are not on the agenda for that meeting. At the suggestion of any independent Director, meetings of the Board shall include an in camera session. 4. Committees The Board will delegate certain of its functions to Committees. The Company s committee structure may be subject to change as the Board considers, from time to time, which of its responsibilities can best be fulfilled through a detailed review of matters in-committee. Committees will operate according to Board-approved written mandates outlining duties and responsibilities. Ad hoc committees may, however, be established to deal with specific subjects. Written formal mandates may not necessarily be required in these instances. All members of the Audit, Corporate Governance and Nominating and Compensation Committees shall meet the independence criteria set forth in applicable laws, rules or listing requirements, unless the Board determines otherwise. Committee members shall be appointed by the Board after consultation with the individual Directors. Committee Chairs may be rotated periodically. The Board will appoint a Deputy Chair of the Audit Committee to serve in the event the Chair of the Audit Committee is unable to chair a meeting. In the event that a Chair of a Committee, other than the Audit Committee, is unable to attend a Committee Meeting, the Committee at the time of the meeting will appoint a Deputy Chair of the Committee to serve as Chair of that specific meeting. The Chair of each Committee, in consultation with Committee members, shall determine the frequency and length of Committee meetings, consistent with any requirements set forth in the Committee s Charter. The Chair and Deputy Chair of the Audit Committee, in consultation with the Executive team, shall develop the Committee s agenda. Each Committee will report on the result of each Committee meeting at the next Board meeting. 5. CEO Performance The Chair of the Compensation Committee shall conduct an annual review of the CEO s performance. Such evaluation will be reported to, and discussed with, the Compensation Committee, excluding the CEO if he or she is a member of the Compensation Committee. The Chair of the Compensation Committee shall subsequently review the evaluation with the Board 3

5 in order to ensure that the CEO is providing the best leadership for the Company in the longand short-term. 6. Director Access to the Executive Team Directors shall have full and free access to the Executive team of the Company, providing the interaction is in keeping with the parameters of the Board Mandate (see item 1). 7. Evaluation of Board, Committee and Director Performance The Corporate Governance and Nominating Committee shall conduct an annual confidential process to assess the effectiveness of the Board, its Committees and the contribution of individual Directors, in accordance with guidelines recommended by the Committee and approved by the Board. This process will be mandated to an independent third party consultant who will receive the questionnaires, analyze and summarize the results, without attribution of comments or ratings to individual directors, and present these results to the Corporate Governance and Nominating Committee. The results of the Committee's review of Board and Committee performance shall be summarized and presented to the Board by the Committee. 8. Communications with Outside Parties If an outside party approaches a Director on a matter of interest to the Company, the Director should bring the matter to the attention of the Chair who shall determine an appropriate response. The spokesperson of the Company shall be the CEO and/or Corporate Secretary or his or her designate. 9. Director Compensation The form and amount of Director compensation will be determined by the Board based upon the recommendation of the Compensation Committee. The Compensation Committee shall conduct reviews of Director compensation at least every two years. Directors who are employees of the Company or any of its subsidiaries shall not receive any compensation for their service as Directors. Director compensation may be subject to applicable securities laws. 10. Orientation and Continuing Education As part of the orientation program, new Directors are briefed by Executive management, other appropriate personnel and outside advisors about the Company s strategic plans, significant financial, accounting and risk management issues, compliance programs, principal Officers and internal and external auditors. Upon joining the Board, each new Director is provided with such information as is necessary to ensure that he or she is familiar with the Company's business and the procedures of the Board. New members receive copies of Board materials and other materials regarding the Company's business and operations (including the Mandate of the Board, 4

6 Committee Charters, recent annual reports, proxy solicitation materials and other operating and budget reports) and are provided with opportunities to meet with the Executive team and other Directors. The Corporation s Board has established a Governance and Nominating Committee (the Governance Committee ). As part of its governance responsibilities, this Committee makes continuing education opportunities available to all Directors to enable them to maintain or enhance their skills and abilities and ensure that their knowledge and understanding of Company s business remains current. 11. Board Confidentiality Directors will maintain the absolute confidentiality of the deliberations and decisions of the Board and the information received at meetings. The use of any information the Board becomes privy to in relation to the Company or its activities should be governed under by the Code of Ethical Conduct and Business Practices. 12. Resources and Authority of the Board The Board shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to retain counsel or other experts as it deems appropriate, without seeking approval of the Executive team. Any costs associated with same shall be forwarded to the Corporate Secretary for review and payment approval. 13. Indemnification The Company will provide reasonable Directors' and Officers' liability insurance for the Directors and shall indemnify Directors to the fullest extent permitted by law. The Company and each Director individually will enter into an Indemnification Agreement. 14. Revision History Revision # Revision Date Reason for Revision Name change to Telesta Therapeutics Inc. 5