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The Board endorses the principle that our
corporate governance practices (the Corporate Governance Practices) are
a fundamental part of our proper functioning as a corporation. The Board
believes that these Corporate Governance Practices enhance the interests of our
security holders, employees, customers
and of others dealing with us. These Corporate Governance Practices conform in
all substantial aspects with applicable corporate governance guidelines and
standards and take into account the following:
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Reason for Conforming |
| Sarbanes-Oxley Act of 2002 (U.S.) |
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| We are a foreign private issuer in the U.S.A. |
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| New York Stock Exchange (the NYSE) |
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| We have shares listed on the NYSE |
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| The Toronto Stock Exchange (the TSX) |
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| We have shares listed on the TSX |
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| Canadian Securities Administrators |
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| We are a reporting issuer in various jurisdictions in Canada |
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The Board closely monitors these and other
corporate governance developments and is committed to enhancing our Corporate
Governance Practices on a continuing basis. Our Corporate Governance Practices,
summarized below, respond to the disclosure required by National Instrument
58-101 — Disclosure of Corporate Governance Practices (NI 58-101)
and the guidelines set forth in National Policy 58-201 — Corporate
Governance Guidelines. This Statement of Corporate Governance Practices was
prepared by the Nominating and Corporate Governance Committee and approved by
the Board.
Composition of the Board
The Board currently has 16 members. The Board
has determined that 9 of the 16 directors are “independent” within the meaning
of NI 58-101.
The directors who are not independent are:
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Edward S. Rogers, O.C. (executive officer)
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Melinda M. Rogers (daughter of Edward S. Rogers and an executive
officer)
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Philip B. Lind (executive officer)
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Nadir Mohamed (executive officer)
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Alan D. Horn (former executive officer)
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Edward Rogers (son of Edward S. Rogers and an executive officer
of our subsidiary Rogers Cable Inc.)
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Loretta A. Rogers (spouse of Edward S. Rogers)
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The 9 independent directors are:
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Ronald D. Besse
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C. William D. Birchall
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Peter C. Godsoe, O.C.
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Thomas I. Hull
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The Hon. David R. Peterson, P.C., Q.C.
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William T. Schleyer
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John A. Tory, Q.C.
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J. Christopher C. Wansbrough
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Colin D. Watson
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A majority of the Board is independent.
During 2005, the independent directors met at in
camera sessions during several Board meetings without any of management or
non-independent directors. In camera sessions for the independent directors are
included as part of the agenda for director meetings in 2006. Since January 1, 2005, the independent directors have had
7 such sessions.
Alan D. Horn is the Chairman of the Board and is
not an independent director. Pursuant to the Board Charter, the Board has
appointed Peter C. Godsoe, O.C. as lead director. The
lead director facilitates the functioning of the Board independently of
management of the Corporation and provides independent leadership to the Board.
For further information regarding the role and responsibilities of the lead
director, see “Role and Responsibilities of the Chair” in the Board Charter
(attached to this Information Circular as Appendix A).
For further information regarding the directors,
including directorships of other reporting issuers and attendance at Board and
committee meetings, see Business of the Meeting — Election of Directors
and Executive Compensation — Compensation of Directors above.
Mandate of the Board
The Board has adopted a Board of Directors
Charter (the Board Charter) as its written mandate of directors’ duties and
responsibilities (the Board Charter is attached to this Information Circular as
Appendix A).
Position Descriptions
The Board Charter mandates the Chair’s main
responsibility as overseeing and managing and assisting the Board in fulfilling
its duties and responsibilities in an effective manner independently of
management. For that purpose, the duties of the Chair of the Board include:
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chairing Board and shareholders’ meetings;
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organizing an appropriate annual work plan and scheduled Board
meetings;
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participating in preparation of each Board meeting agenda and an
appropriate information package timely sent to each director in advance of
the meeting;
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monitoring Board committees’ work and attending committee
meetings as a non-voting participant (if not a committee member);
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assisting in the Board’s evaluation and self-assessment of its
effectiveness and implementing improvements;
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providing guidance to individual directors in discharging their
duties;
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ensuring new directors receive an orientation and education
program; and
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arranging for directors to communicate with the
Chair formally and informally concerning matters of interest to directors.
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The chairs of each board committee are
responsible to organize the affairs of such committee, chair its meetings,
provide guidance to the members of such committee, retain outside experts as
may be required and report to the Board on the work of such committee. The
mandate of the committee may also assign specific additional responsibilities
to the chair of the committee.
The Board has approved a detailed written job
description for the office of Chief Executive Officer. The Compensation
Committee will review and approve the Chief Executive Officer’s written
objectives for the current year.
Orientation and Continuing Education
It is the responsibility of the Chair of the
Board to oversee an orientation and continuing education program for the
directors. Newly appointed directors attend orientation sessions which are
intended to familiarize new directors with our business and operations,
including management structure, strategic plans, finances, opportunities and
risks. New directors have the opportunity to meet with management and other
members of the board. New directors are also provided with a package of
detailed information concerning our affairs, including public filings. From
time to time, presentations are made by management personnel or outside experts
to educate the directors on new issues.
Ethical Business Conduct
The Board has adopted a Directors and Officers
Code of Conduct and Ethics (the Code of Conduct and Ethics or the Code). The
Code requires our directors and officers to disclose any material transaction
or relationship that could reasonably be expected to give rise to a conflict of
interest, among other requirements.
Issues arising in connection with the Code,
including conflicts of interest are reported to the Audit Committee, which is
responsible for monitoring compliance with the Code and applying and
interpreting the Code in particular situations. The Audit Committee must inform
the Board of any Code violation. Any waiver of a Code provision may be made
only by the Board or by the Audit Committee and reported to the Board.
We have publicly filed the Code of Conduct and
Ethics on SEDAR and posted it on “Corporate Governance” at www.rogers.com.
Nomination of Directors
Potential candidates for director of the
Corporation are evaluated by the Nominating Committee, under the leadership of
the Chair, having regard to the candidate’s background and qualifications to
ensure that the candidate’s experience and skill are aligned with the Corporation’s
needs. In evaluating candidates, the Nominating Committee considers the
effectiveness of the Board, as a whole, and its individual members, including
their respective competencies and skills.
Summary of Responsibilities, Powers and
Operation of the Nominating Committee:
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reviews, considers and/or initiates proposals for nomination of
directors to the Board and the board of directors of wholly-owned
subsidiaries
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where appropriate, interviews proposed nominees
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assesses incumbent directors for re-nomination to the Board
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establishes criteria for and recommends prospective members for
our and our affiliates’ boards
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The Nominating Committee has five members, a
majority of whom are independent.
Compensation
An annual market survey is carried out to assist
management in preparing its recommendations to the Board with respect to
executive compensation. The Compensation Committee has retained Mercer Inc. to
assist it in evaluating management’s recommendations and to advise
on compensation related matters generally. The Compensation Committee may
direct management to evaluate alternative compensation arrangements.
For additional information, please see “Report
on Executive Compensation”.
Summary of Responsibilities, Powers and Operation
of the Compensation Committee:
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approves appointment and compensation of senior officers
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reviews and recommends to the Board our executive compensation
policies
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reviews our compensation and benefit programs (design and
competitiveness) and senior executives’ management development and succession
planning
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All members of the Compensation Committee are
independent.
Board Committees
The Board has 7 permanent (or standing)
committees (the Nominating Committee and the Compensation Committee are
described above and the other five are described below). The Board may appoint
special committees to deal with specific matters. A special committee might,
for example, consider proposed material transactions between us and the
significant shareholder (or corporations he controls) or between us and our
subsidiaries. In those cases the committee would consist entirely of
independent directors who have no relationship to us or to the significant
shareholder other than as a director.
For example, during 2005 a special committee of
the Board comprised of independent directors reviewed and approved, along with
the Board, an arrangement to sell to our controlling shareholder, for
$13 million in cash, tax losses aggregating approximately $100 million.
The special committee was advised by independent counsel and engaged an
independent accounting firm as part of their review to ensure that the sale
price was within a range that would be fair to us from a financial point of
view.
Audit Committee
The functions of the Audit
Committee is a follows:
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• reviews financial
reporting procedures (internal and external) and adequacy of internal controls
(including steps to remedy)
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• reviews consolidated
financial statements (annual audited and interim unaudited)
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reviews with external auditors our critical accounting practices
and material alternative accounting treatments of financial information that
have been discussed with management and external auditors’ other material
written communication with management
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reviews annual and interim financial information and press
releases before release of earnings
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selects, sets compensation of and oversees external auditor for
audit, review and attest services and recommends external auditors to be
nominated for shareholders’ approval
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pre-approves audit, audit-related and non-audit services of
external auditors
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assesses and reports to the Board on independence and
performance of external auditors
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assesses management’s design, implementation of and reporting on
internal controls
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reviews activities, organization and qualifications of the
internal auditors
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reviews before release management’s discussion and analysis,
annual information form and other disclosure documents containing financial
information
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reviews with general counsel legal compliance, litigation and
other legal matters
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establishes procedures for complaints regarding accounting,
internal controls and auditing, including employees’ confidential anonymous
concerns
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prepares annual performance evaluation of the Audit Committee
and reviews with Board
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reviews annually Audit Committee Charter (see www.rogers.com)
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meets periodically and separately with chief financial officer,
internal auditors, external auditors and general counsel
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engages outside advisors as appropriate at our expense without
Board or management approval
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conducts appropriate investigations
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monitors compliance with the Code of Conduct and Ethics
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Please see the section entitled “Audit
Committee” of the Corporation’s Annual Information Form, available at
www.sedar.com, for additional information with respect to the Corporation’s
audit committee.
Corporate Governance Committee
The function of the Corporate Governance
Committee is as follows:
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develops, recommends to the Board and reviews our corporate
governance practices (including Board Charter and Code of Conduct and Ethics)
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recommends to the Board and committees the number and content of
meetings, annual work plan and schedules of issues
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reviews size and compensation of our and our affiliates’ boards
and committees
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reports to the Board as to adequacy and form of directors’
compensation
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provides orientation program for new directors
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evaluates annually Board and committee performance
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reviews Board committees’ mandates
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monitors policies for senior officers accepting outside
directorships, minimum share ownership for non-management directors and
confidential material information (disclosure, restricted use and insider
trading)
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oversees individual directors engaging outside advisors at our
expense
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Pension Committee
The function of the Pension Committee is as
follows:
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administers our pension plans
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reviews our pension plans’ provisions and investment performance
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Executive Committee
The function of the Executive Committee is as
follows:
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acts under powers delegated by the Board
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approves final terms of transactions previously approved by the
Board
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implements policy initiatives adopted by the Board
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Finance Committee
The function of the Finance Committee is as
follows:
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reviews and reports to the Board or a committee of the Board on
certain matters, including:
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financings (including share issuances)
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transactions not budgeted, outside the ordinary course of
business and involving more than $30 million
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alliance, branding, licence,
partnership and joint venture arrangements involving more than
$30 million
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granting, issuing or assuming rights of first negotiation, first
offer or first refusal or non-competition covenants or exclusivity involving
a Rogers property or asset exceeding
$300 million
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granting, assuming or issuing of any non-competition covenant or
exclusivity undertaking involving property, assets or revenues exceeding
$30 million
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candidates for our and our subsidiaries’ Chief Financial Officer
and Audit Committee Chair
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Board and Director Performance
The Corporate Governance Committee uses
discussions between the Chair of the Committee and Board members and written
questionnaires to solicit comment and evaluation from individual directors on
the performance and effectiveness of the Board and its committees and
recommendations for improvements. The Chair of the Committee discusses with the
individual directors the effectiveness and performance of the Board, and other
Board and individual directors’ areas of interest and participation. The Chair
also discusses with each committee chairman the mandate, effectiveness and
performance of such committee. The Chair reviews the recommendations and
comments of the directors with the Corporate Governance Committee.
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