Director Independence

The Company is subject to various disclosure rules, guidelines and requirements governing the independence of the Board of Directors and its committees.

Independence of a Director is defined as a person who has no direct or indirect material relationship with the Company, its subsidiaries, or its auditor, or as a partner, officer or significant shareholder of an entity that has a material relationship with the Company.

The Conduct Review and Corporate Governance Committee determines, at least annually, whether a Director is independent, based on information provided by each Director on a conflict of interest questionnaire that lists his/her personal business and other relationships and dealings with the Company or its affiliates and our External Auditor. The conflict of interest questionnaire also requires disclosure of all entities with which a Director or an Officer is involved.

Additional information relating to each Director standing for election, including the name(s) of any other reporting issuer(s) on whose Board the Director serves and the attendance record for each Director, may be found on pages 5 to 16 of the Management Proxy Circular.

Eleven of the 12 candidates proposed for election qualify as unrelated and independent, as they are independent from management and free from any interest, function, business or other relationship that could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the Company’s best interest. Only the Company’s Chief Executive Officer is considered a non-independent Director.

It is the Company’s view that Directors should be independent of management but also of each other. If two Directors sit on more than one board of directors together, this is referred to as a “Director Interlock”. A Director Interlock results in a perceived risk of decisions being made in the interest of another company and suggests a degree of inter-related interests that might be detrimental to director independence. Interlocking relationships can also raise concerns when there is an imbalance of power between two Directors such as when one of the Directors is an executive on the first board and is evaluated and remunerated by his fellow Director. In such situation, on the second board where he is expected to serve as an independent non-executive director, his independence may be compromised. The Company is currently evaluating the evolving best practices with the aim of determining the best course of action and adopting a policy on the matter in the near future. As of the date of the 2016 Management Proxy Circular, there were no Director Interlocks among the candidates proposed for election.

In 2015, the Company implemented a Director tenure policy limiting the number of consecutives terms a Director can serve. The purpose of this policy is to ensure that the Board of Directors is at all times operating in a co-ordinated and effective manner so as to best promote the interests of the Company and its shareholders by ensuring that its composition reflects a balance between experience and knowledge of the Company’s affairs and the need for new perspectives and expertise.