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Hamilton Utilities Corporation
is incorporated under the Ontario Business Corporations Act and is subject to a Shareholder Declaration issued by the City of Hamilton, which requires that the Board of Directors observe the standards of corporate governance which apply to publicly traded corporations, to the extent that it is reasonably practical to do so. Although Hamilton Utilities Corporation is not a public corporation, the Corporation recognizes the role of good governance in a successful business enterprise and has provided voluntary disclosure on its corporate governance practices.
Responsibilities of the Board of Directors
The Canadian Securities Administrators ("CSA") have published comprehensive guidelines for effective corporate governance. The guidelines cover a broad spectrum of good governance practices and elaborate specifically on a number of major areas where Boards should explicitly assume stewardship:
- Development of corporate governance principles and guidelines
- The integrity of senior management and throughout the organization
- Strategic planning process and approval of a strategic plan
- Risk assessment
- Integrity of internal controls and management information systems
- Succession planning and management performance
- Communications policy
The Board of Directors of Hamilton Utilities Corporation has assumed stewardship with respect to the areas identified by the CSA and fulfills such stewardship responsibilities directly and with supporting oversight by its committees. The Board has established written mandates for itself and for each Board committee, and has adopted a comprehensive statement of Governance Guidelines. The Board has also developed roles and responsibilities for the Chair of the Board and for each Committee Chair and the Chief Executive Officer.
The CSA also provides guidelines with respect to the composition of the Board of Directors, including that the majority of Directors should be independent. The Board of Directors of Hamilton Utilities Corporation consists of nine directors, eight of whom are independent; the Mayor of the City of Hamilton or his appointed designate is the only non-independent member of the Board. The Chair of the Board is an independent Director, as are the Chairs of all Board Committees. The independent members of the Board meet without management being in attendance as part of each board meeting. All new Directors receive a comprehensive orientation with respect to the role of the Board, the business of the Corporation, and the legislative and regulatory environment affecting the electricity sector. The Corporation has adopted a code of business conduct, including a conflict of interest policy. The Board undertakes an annual assessment of the Board and each Committee.
Annually, the Board requests and receives an independence letter from its auditors and by letter dated February 2, 2007, KPMG LLP have confirmed that they are objective with respect to the Corporation within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of Ontario.
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Board Committees
There are three committees of the Board with respective oversight mandates as follows:
- Audit and Risk Management Committee: risk management, internal control, financial information, and annual audit; as well as the information systems activities of Hamilton Utilities Corporation.
- Human Resources and Corporate Governance Committee: succession planning, management objective setting and performance, compensation, and communications policy activities of the Corporation. This committee also covers all governance issues including an annual performance review of the Board and its committees.
- Nominating Committee: evaluation of Board composition and nomination of Directors of the Board as may be required.
The Strategic Plans for the Corporation are approved and monitored directly by the Board of Directors.
The CSA Guidelines also recommend that Committees of the Board should generally be comprised of independent Directors. Each Committee of Hamilton Utilities Corporation is comprised of only independent Board members.
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Mandate of Management
The Board approves the mandate of the Chief Executive Officer and annual corporate objectives consistent with the recommendations of the CSA.
The permitted business activities of the Corporation are outlined in its Shareholder Declaration. The mandate of the Chief Executive Officer and annual corporate objectives are consistent with the Shareholder Declaration. The authority limits of the Chief Executive Officer, as delegated by the Board, have been formally documented and executed by the Board.
In addition, the Board of Directors annually reviews the Chief Executive Officer's objectives, evaluates the Chief Executive Officer's performance, makes recommendations on the appointment of executive management, and monitors the succession planning process.
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