Board of Directors
In keeping with contemporary practices of good corporate governance, immediately following the completion of the company’s Initial Public Offering in 2009, and continuing at the date of publication in 2011, Capital Power was governed by a board of 12 directors, ten of whom are independent for the purposes of National Instrument 58-101.
Board Roles and Responsibilities
The Board of Directors (the board) is responsible for the stewardship of Capital Power, providing independent, effective leadership to supervise the management of Capital Power’s business and affairs and to grow value responsibly, in a profitable and sustainable manner. The board is responsible for:
Management selection, retention, succession, and remuneration;
Overseeing the development of the company’s business strategy and monitoring its progress;
Approving significant company policies and procedures;
Overseeing timely and accurate reporting to shareholders and public filing of documents; and
Approving major company decisions, such as: budgets; acquisitions; major capital expenditures; and documents, including such things as audited financial wstatements, declarations of dividends, offering circulars, and initiation of bylaw amendments.
Board Terms of Reference
Capital Power also has terms of reference for individual directors that outline the personal and professional characteristics required for all directors, and is used as the basis for performance evaluation and recruitment.
Individual Director's Terms of Reference
Corporate Governance Practices
The board has approved a Corporate Governance Policy outlining the Corporation’s governance practices.
Corporate Governance Policy
Our corporate governance practices are intended to meet or exceed the rules and guidelines of Canadian securities regulators, which include the following:
Board Composition and Independence
The Board of Directors is required to have a minimum of three and a maximum of 12 directors. As of December 2011, the board consisted of 12 directors, four of whom were nominated by EPCOR pursuant to rights attached to the Special Voting Shares held by EPCOR, and eight of whom were elected by shareholders at Capital Power’s annual meeting in May 2011. The board comprises 11 men and one woman.
Mr. Lowry is the Chair of the Board and is independent. The Board has adopted terms of reference for the Chair that sets out the Chair’s responsibilities and principal duties. The Chair functions in a leadership capacity and has the statutory authority to preside over meetings of the Board. As part of performing this function, the Chair has the duty to support and assist the CEO and work with the CEO to develop and maintain productive relationships with all stakeholders and ensure the Board represents and protects the interest of shareholders.
Capital Power will have a Non-EPCOR Chair position for as long as the Chair of the Board is not independent of EPCOR. Mr. Lowry is not independent of EPCOR. The Non-EPCOR Elect Chair must be nominated by the CGC&N Committee and confirmed by the non-EPCOR elect Directors. The Non-EPCOR Elect Chair’s key responsibility is to ensure that appropriate structures are in place so the Board can function independently of the Directors nominated to the Board by EPCOR and provide leadership to the non-EPCOR elect Directors to ensure that the Board represents and protects the interests of all shareholders
The board has determined that all of the directors, except Messrs. Cruickshank and Vaasjo, are independent within the meaning of applicable Canadian securities laws, on the basis that they do not have any direct or indirect relationship with the company that could, in the view of the board, be reasonably expected to interfere with the exercise of their independent judgment.
Board Structure
The three standing committees of the board include the following:
- Audit committee
- Corporate Governance, Compensation and Nominating committee
- Health, Safety and Environment committee
All or a majority of the members of the committees are independent.
In accordance with its terms of reference, each committee is responsible for overseeing certain corporate governance matters and making appropriate recommendations to the board. Each committee is committed to meeting or exceeding governance standards set out by various regulatory authorities and governance policy-makers, including the Canadian Securities Administrators’ instruments relating to corporate governance.
Audit Committee Terms of Reference
Corporate Governance, Compensation and Nominating Committee Terms of Reference
Health, Safety and Environment Committee Terms of Reference
Link between Compensation and Corporate Performance
To ensure alignment with the interests of shareholders, board directors and named executive officers are subject to share ownership guidelines, disclosed in the most recent Management Proxy Circular.
The company’s practices regarding compensation for directors are designed to attract and retain the most qualified individuals to serve on the board, to reflect the size and complexity of the industry, and to reinforce the emphasis the company places on aligning directors’ compensation with the interests of shareholders.
The company provides its directors with a compensation package consisting of an annual retainer, committee and meeting fees, and equity-based compensation in the form of deferred stock units (DSUs).
Non-employee directors can elect to receive a portion of their annual equity retainer in the form of DSUs and are also subject to share ownership guidelines that require ownership of Common Shares and/or DSUs with an acquisition or market value equivalent to not less than three times the aggregate value of their annual cash and equity retainer.
Directors have five years from their respective dates of appointment to accumulate the required number of Common Shares and/or DSUs.
Major Policies
Capital Power’s major policies include, but are not limited to:
Last Reviewed: May 3, 2013