The various corporate governance initiatives of the Company are summarized below. For more information on our governance practices, please refer to the Company’s Management Proxy Circular.
Incentive Compensation Clawback Policy
Under the Company’s Incentive Compensation Clawback Policy, which applies to all executive officers and certain members of its senior management, the Board may, under certain circumstances, require the reimbursement of the overcompensation amounts awarded, granted or paid to such individuals if he/she was engaged in gross negligence, intentional misconduct or fraud contributing to an accounting restatement of the financial statements of the Company.
To consult the Company’s Incentive Compensation Clawback Policy, please click here.
Majority Voting Policy
The Board believes that each of its members should carry the confidence and support of the shareholders. Therefore, in addition to the individual voting process implemented several years ago, the Board also has a majority voting policy.
To consult the Company’s Majority Voting Policy, please click here.
Financial Integrity Surveillance Procedure
The Company has adopted a Financial Integrity Surveillance Procedure, which allows officers and employees who have any complaint or concern regarding accounting, internal accounting controls or auditing matters to be reported on a confidential and anonymous basis. Complaints can be made via e-mail, telephone or mail to the Chairman of the Audit Committee, who is responsible for overseeing the Financial Integrity Surveillance Procedure.
Director Orientation and Training Program
The Board considers that orienting and educating new directors, as well as maintaining and continuing the education of current directors, is an important element to ensure responsible corporate governance.
For more information on our Director Orientation and Training Program, please refer to the Company’s Management Proxy Circular.
Directors’ Employment and other Directorships – Procedure
Directors must inform senior Management before accepting an invitation to serve on another board, or any new employment relationship. Senior Management assesses whether the director would be involved in a real, apparent or potential conflict of interest and whether the director’s ability to discharge his or her responsibilities as a director of the Company is likely to be affected.
The Board believes that the fact that a director of the Company serves on the board of directors of another company does not necessarily interfere with his or her ability to exercise his or her independent judgement and to act in the best interest of the Company. However, directors are expected to have sufficient time to devote to their duties as Board members of the Company. In this regard, the Board has established guidelines on the maximum number of public directorships that directors may hold.
To consult the Company’s Directors’ Employment and other Directorships – Procedure, please click here.
Directors’ Selection and Appointment Process
The Corporate Governance and Human Resources Committee, which is composed entirely of independent directors, is responsible for (i) the implementation of a uniform and transparent process for selecting nominees for election to the Board and the recruitment of new candidates for Board membership, and making recommendations to the Board with respect thereto; and (ii) the implementation and application of a process to periodically assess the effectiveness of the Board, its committees and the individual performance of each Board member. The Company endorses a balanced representation in terms of director tenure and age, and fostering diversity in this regard in terms of positions of leadership and the nomination of directors.
To consult the Company’s Director Selection and Appointment Process, please click here.
Executive Compensation Policy
The Company’s executive compensation policy aims to attract and retain competent individuals and motivate them to optimize value for the Company’s shareholders. The compensation policy is designed to be competitive, to stimulate profitable return on investments and long-term growth.
The Corporate Governance and Human Resources Committee is responsible for reviewing and monitoring the executive compensation policy, including determining the compensation elements and the compensation mix to balance the executives’ focus on short-term and long-term objectives. The Company’s compensation policies and practices are designed to adequately reward executive officers for their services, and to encourage them to establish short-term and long-term strategies aimed at increasing share value and creating economic wealth. The Company’s compensation strategy therefore places the emphasis on compensation elements linked to performance, including share value through option and PSU grants.
Share Ownership Policy for Directors
Pursuant to the ownership policy adopted by the Board, all directors of the Company shall, at all times while directors, own a number of Common Shares and/or Deferred Share Units (DSU) having a total market value of at least three times their then-current annual cash retainer.
To consult the Company’s Share Ownership Policy for Directors, please click here.
Share Ownership Policy for Executive Officers
Pursuant to the ownership policy for executive officers adopted by the Board, the Chief Executive Officer shall own a number of shares having a total market value of at least two times his annual base salary; the Chief Financial Officer and the President and Chief Operating Officer of the Company shall own a total market value of at least 1.5 times their annual base salary; and all other executives, including NEOs, shall own a total market value of at least one time the executive’s annual base salary. Each executive is required to comply with this policy within five years following his or her appointment as an executive officer of the Company.
To consult the Company’s Share Ownership Policy for Executive Officers, please click here.
Evaluation Process for the Board of Directors, Directors and Committees
The Company has a formal annual evaluation process in place for the evaluation of the Board, its committees and the individual directors’ performance where each Board member is required to complete an effectiveness survey on a confidential basis.
As Board members are elected annually, the Corporate Governance and Human Resources Committee takes into account each director’s performance when recommending nominees to the Board for election at the next annual meeting of shareholders and when making recommendations regarding the composition of the committees, as well as their Chairmen for approval by the Board.
Evaluation Process – Chief Executive Officer
An annual process is in place to assess the performance of the Chief Executive Officer.
To consult the Company’s Evaluation Process for its Chief Executive Officer, please click here.
Travelling Guidelines for Key Executives
Guidelines preventing key executives from travelling together are in place to ensure management continuity and therefore the successful continuation of the Company in the event of an unexpected event involving the key executives of the Company.
Corporate Disclosure Policy
The Audit Committee is responsible for the review of the annual and interim financial statements of the Company and other continuous disclosure documents, such as the Management Proxy Circular, the Annual Information Form and the Annual Report, all of which are approved by the Board before mailing. The Board is responsible for maintaining a proper communication policy with shareholders, institutional investors and participants in the financial market. In order to maintain high standards regarding disclosure issues, the Board maintains a disclosure policy. The purpose of the disclosure policy is to ensure that communications to the investing public are timely, consistent and accurate, and that the information is disseminated in compliance with all applicable requirements of the TSX and securities regulatory authorities.
The Company has a management-level Disclosure Committee to oversee the process of certification by the Chief Executive Officer and Chief Financial Officer of the information presented in the Company’s annual and interim documents. The Disclosure Committee reports to the Audit Committee on a quarterly basis.
Rules of Conduct Respecting Trading of Securities of Saputo Inc.
Reporting insiders of Saputo Inc., as well as employees who, in the ordinary course of their duties, may have access to material non-disclosed information, are subject to restriction periods relating to the sale or purchase of securities of Saputo.
Such reporting insiders and employees have to communicate with Legal Affairs at all times, even during a permitted transaction period, in order to obtain a pre-authorization before trading on Saputo’s securities.
Policy with Respect to the Approval of Audit and Non-Audit Services by the External Auditors and Other Accounting Firms
The Company has a policy with respect to services rendered by its external auditors. The policy divides the services in three categories: (i) services that are considered audit related (Audit Services) and therefore covered by the annual audit budget; (ii) services that do not qualify as Audit Services (Other Mandates); and (iii) services that cannot be provided by the external auditors (Prohibited Mandates). Pursuant to the policy, no Other Mandate(s) can be provided by the Company’s external auditors, unless certain conditions are met.
Finally, the policy requires that Management presents to the Audit Committee, on a quarterly basis, a statement of the services (other than the Audit Services) rendered by the external auditors of the Company, as well as any mandate given to other accounting firms.
Policy with Respect to the Hiring of Current and Former Employees of the External Auditors
The Company has a hiring policy with respect to employees and former employees of the current and former auditors of the Company. The objective of the policy is to define the rules applicable to the hiring by the Company of such employees.