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HUC is a multi-utility service provider owned 100% by the City of Hamilton. The company owns and operates a number of regulated and non-regulated utility businesses on a for profit basis.
It was determined from inception that the company would adopt the same high standards of corporate governance required by the Toronto Stock Exchange for publicly traded corporations, modified as appropriate recognizing that HUC is not a public issuer, and keep abreast of changes as they occur.
In doing so HUC recognizes that our business model is somewhat unique in that we are in "The Business of Public Service™" with all that entails. It means that we are accountable to our sole shareholder, the City of Hamilton, for the provision of essential public services and must set our objectives and be accountable for properly balancing our economic objectives with our objectives for customer service, safety, health and environment, and our responsibility to the community at large.
HUC corporate Vision, Mission and Values articulate the corporate objectives of the Board of Directors and the expectations of the CEO, management and staff of HUC.
VISION
We are recognized as the leader
in the delivery of municipal utility services and our customers say
they are receiving best value.
MISSION
We are a customer focused
multi-utility service provider.
Our operations and investments contribute to municipal economic
development and improvement of the natural environment.
We provide a healthy, safe and challenging workplace with
recognition for the contributions of our employees
We will continue to grow by attracting new utility customers and
creating value for our shareholders.
VALUES
- We value people who make decisions
- We value people who build relationships based on trust, integrity and mutual respect
- We value people who can come together to make a team work
- We value people who listen to what customers are saying
- We value people who contribute to the bottom-line success of the business
- We value people who recognize the necessity of open communication throughout the corporation
- We value people who recognize their responsibility to balance the corporate financial goals with environmental protection and social responsibility
- We value people who contribute to a safe & healthy work environment
- We value people who take initiative to develop new skills and knowledge
- 10. We value people who enhance our corporate reputation and image
Within this context HUC has adopted the following corporate governance guidelines.
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| 1. Sustainable
Development |
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First and foremost the Board is committed to the basic principles of sustainable development and to the City of Hamilton's Vision 2020 - the Sustainable City.
We are committed within our influence to the
- social well-being of the community including public health and safety,
- protection of and improvements to the natural environment,
- financial/economic viability of the community.
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| 2. Code of Conduct |
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| The Board is committed to ensuring that the Corporation, its directors and management conduct themselves to the highest standards of business ethics, honesty and integrity. Annually each director will review and sign-off on the corporate policy covering the "Code of Conduct."
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| 3. Shareholders Communications
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| The Board recognizes the importance of open and transparent communications and decision making processes. We will keep our shareholder well informed on significant operating and development activities on a timely basis.
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| 4. Customer/Ratepayers
Communication |
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Customer service is a central priority for all operations of HUC. We will strive to maintain an open and clear two-way communication with all customers on issues of concern to them.
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| 5. Board Size and Composition
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The Shareholder Declaration authorizes a Board that will consist of a minimum of 7 and a maximum of 12 directors, who are approved annually by City Council. The directors are appointed with staggered three year terms, and shall include the Mayor or the Mayor's designate and the CEO. The balance will consist of independent, non employee directors, who are nominated by the Board for consideration by council.
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| 6. Board Chairman |
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| Board policy requires an independent non-executive chair with a written position description. There is clear separation of roles between the Chair and the CEO. In the absence of the Chair another independent director will be appointed by the Board.
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| 7. Board Committees |
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| Committees are formed, filled, modified and terminated as part of the organizational and governance work of the full Board in order to assist the Board in carrying out its mandate. Currently there are two standing committees, namely the Human Resources and Governance Committee and the Audit and Risk Management Committee. Annually, when required, a Nominating Committee is formed for consideration of director nominations for the following year. All committees will operate to a Board approved written mandate outlining duties and responsibilities.
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| 8. Assignment and Rotation of
Committee Members |
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Board committee assignments and committee chairs are reviewed annually and rotated periodically consistent with the Directors' interests, areas of expertise and regulatory requirements.
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| 9. Committee Meetings
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The schedule of meetings of each committee will be determined by its Chair and its members based upon an annual work plan designed to discharge the responsibilities of the committee as set out in its mandate. The Chair of the committee will develop the agenda for each committee meeting through consultation as appropriate with members of management, staff and the committee. Each committee will report to the Board on results of each committee meeting.
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| 10. Board Meeting
Agendas |
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The Chair of the Board and the CEO in consultation with the Corporate Secretary will develop the agenda for each board meeting. Draft agendas will be distributed to directors before each meeting and all board members are free to suggest additions to the draft agenda. Teleconference meetings may be used between regularly scheduled meetings to assure continuity of board information flow and to deal with urgent matters.
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| 11. Information for
Board and Committee Meetings |
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Whenever practical information and reports pertaining to the board and committee meeting agenda items will be circulated to the directors in advance of the meeting. Such materials should be concise, yet complete - and be prepared in a way to focus attention on critical issues to be considered by the board. In the interest of efficient use of time, board presentations by management should assume that this material has been read by directors. It is understood that in the case of highly confidential matters it may not be appropriate to distribute written materials in advance.
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| 12. Regular Attendance of
Non-Directors at Meetings |
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The Board appreciates the value of having certain members of senior management attend each board meeting to provide information and opinion to assist the directors in their deliberations. The CEO will seek the board's concurrence in the event of any proposed change to the management attendees at board meetings. Management attendees will not attend the "Closed Board Session" portion of each meeting which is reserved for discussion among directors only.
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| 13: Executive Sessions of
Outside Directors |
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The outside directors of the board will meet formally at least twice each year in Executive Sessions which will be followed by a discussion with the CEO. Time is provided at the end of each meeting for such a session if required.
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| 14. Board Contacts with Senior
Management |
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All of the directors have open access to the company's senior management. It is expected that directors will exercise judgment to ensure that their contacts will not distract from the company's business operations. Written communications from directors to members of management will be copied to the CEO. The Board encourages having members of management participate appropriately in board meetings in order to better inform directors about the business of the company and the caliber of the management team. The Board also encourages individual directors to make themselves available for consultations with management outside board meetings in order to provide specific advice and counsel on subjects where such directors have special knowledge and experience.
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| 15. Board Compensation
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The Human Resources and Governance Committee will regularly review the compensation of the Chair and Directors. The Committee will make recommendations to the Board for consideration when it believes changes in compensation are warranted.
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| 16. Board Review of
"Independence" of Outside Directors |
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The Human Resource and Governance Committee will review on an annual basis any relationships between outside directors and the company which might be construed in anyway to compromise the designation of any director as being independent or unrelated to the company. The objective of such review will be to determine the existence of any relationships, to ensure that the composition of the Board remains such that the majority of the directors are independent and unrelated, and that where any relationships exist, the director is acting appropriately.
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| 17. Criteria for Board
Membership |
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The Nominating Committee of the Board will review each year the general and specific criteria applicable to candidates to be considered for nomination to the Board. The objective of this review will be to maintain the composition of the Board in a way which provides the best mix of skills and experience to guide the long term strategy and ongoing business operations of the company. This review will take into account the desirability of maintaining a reasonable diversity of personal characteristics such as age, gender, geographic location, etc. among the directors but maintaining common characteristics such as personal integrity, outstanding ability in their individual fields of expertise and a willingness to devote the necessary time to board matters.
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| 18. Selection of
Independent Directors |
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The Board is responsible for proposing a slate of independent directors to the City Council of Hamilton for appointment to the Board effective July 1st of each year. The Nominating Committee has been given the responsibility of reviewing the availability and interest of current directors to fulfill their term or the desirability from a directors' and board's perspective of their seeking a further 3 year term. In order to fill any vacancies the Nominating Committee has been given responsibility of gathering the names of potential nominees, screening their qualifications against current skill and experience needs of the Board and making recommendations in this regard to the full Board. All directors are encouraged to identify potential candidates. Additional direct input to the process is provided by the CEO. An invitation to stand as nominee for election to the Board will normally be made by the Chair of the Board or the Chair's delegate.
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| 19. Term Limits |
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The Board has staggered terms of three years. Any director could normally serve up to three successive terms as approved by the Board and the Shareholder.
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| 20. New Director
Orientation |
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New directors will be provided with an orientation and education program which will include written information about duties and obligations of directors, the business of the company, opportunities for meetings and discussions with management and other directors, tours of operations, etc. The details of the orientation of each new director will be tailored to that director's individual needs and areas of interest. Likewise orientation will be provided to new board committee members to prepare them to participate effectively.
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| 21. Assessing the Board's
Performance |
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The Human Resources and Governance Committee is responsible for organizing and implementing an annual assessment of the overall performance of the Board and each of its members and committees, and reporting on the same to the Board. The objective of these reviews is to contribute to a process of continuous improvement on the board's and committees' execution of their responsibilities and to improve individual director participation as well.
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| 22. Directors Who Change
Their Present Job Responsibility |
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The Board has adopted a policy which requires a director who makes a major change in principal occupation to offer a resignation to the Board for consideration. It is not intended that directors who retire or whose professional positions change should necessarily leave the Board. The sense of the Board is that there should be an opportunity for the Board to review, through the Human Resource and Governance Committee the continual appropriateness of board membership under such circumstances.
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| 23. Retirement Age
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There is no retirement age limitation for the Board.
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| 24. Evaluation of the
CEO |
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The Chair of the Board working through the Human Resource and Governance Committee will prepare a written leadership performance review of the CEO annually. This will be discussed and agreed by the Human Resource and Governance Committee, and with the full Board before being presented to the CEO by the Board Chair. In addition the Human Resource and Governance Committee and the Board will review annually the specific achievements compared to the one year written objectives and both documents will be used in determining compensation and personal development plans.
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| 25. Management
Development and Succession Planning |
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The Board expects senior management development and succession planning to be an ongoing activity with an annual report to be considered by the Human Resource and Governance Committee. A summary of this report plus a focused discussion on succession planning for the CEO will take place annually with the full Board.
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| 26. CEO and Outside
Boards |
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The primary obligation of the CEO is to HUC, but it is recognized that service by the CEO on selected outside boards can be beneficial to the company and to the individual's development. All such requests must be approved by the board based on time allocation, benefit to the individual and benefit to HUC. The number of outside boards will be limited and determined on a situational basis.
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| 27. Corporate Strategy
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Participating in the development of Corporate Strategy is a key role for the Board to play. Management has the responsibility for the development of strategic options and recommending the preferred Corporate Strategy to the Board. The Board in turn must develop a clear understanding of the chosen strategy, its potential risks and rewards.
Following a process of review, questions and comments - the Board must ultimately approve the Corporate Strategy for the company. From time to time special meetings of the Board will be held to facilitate this process.
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| 28. Board Interactions
with Stakeholders |
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The Board believes that it is the function of management to speak for the company in its communications with the shareholder, the investment community, the media, customers, suppliers, employees, government, and the general public. It is understood that the Chair of the Board or other individual directors may from time to time be requested by management to assist with such communications and it is expected that such communication will only occur with the prior knowledge of management. Enquiries from stakeholders directly to the Chair or other directors should be communicated through management to determine an appropriate response. The Board will approve the content of major communications to the shareholder and the investment community including the Annual Report, the MD&A, etc.
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| 29. Individual Directors
Engaging Outside Advisors |
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The Board has determined that any director who wishes to engage outside advisors should review the request with the Chair of the Board.
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