Board Mandates and Committees
Mandate of the Board of Directors
The main responsibility of the Board of Directors (the “Board”) is to oversee the management of the business and affairs of the Company, including its pension funds.
In carrying out its duties and responsibilities and discharging its obligations, the Board will, directly and through its committees, provide direction to management to pursue the best interests of the Company.
II. Composition and Qualifications
i) The composition of the Board and qualifications of its members is determined based on applicable legal requirements and best practices as determined by the Board.
ii) Directors must have complementary knowledge, skills and expertise, including appropriate representation of financial industry and risk management skills, to enable them to positively contribute to the achievement of the Company’s corporate objectives.
iii) The Board of Directors Policies and Procedures, as approved from time to time by the Board, serves as a guide to determining the composition of the Board and qualifications of its members.
III. Process and Operations
i) The Board meets at least four times per year based on a Board pre-approved calendar.
ii) The Chair of the Board may call a meeting of the Board at any time.
iii) The chair of the board of directors of the Company's subsidiaries in the United Kingdom may call a meeting of the Board at any time.
iv) Any of the oversight functions, which include: Financial; Risk Management; Compliance; Internal Audit; and Actuarial (the “Oversight Functions”), may also call a meeting of the Board at any time.
2. Private Meeting of the Members of the Board and Private Meetings With Members of Management
i) At each meeting, the members of the Board will meet privately for an in-camera session without the presence of management.
ii) The members of the Board may meet members of management in private after each meeting or with any other employees of the Company, as deemed appropriate.
A quorum at any meeting shall be a simple majority of the members of the Board of Directors.
IV. Duties and Responsibilities
The Board supervises the management of the business and affairs of the Group. In exercising this role, the Board fulfills the following duties and responsibilities:
1. Strategic Planning
i) Approves, at least annually, the strategic plan which includes climate strategy, and the corporate objectives of the Group and oversees their execution. This oversight includes reviewing and approving all major strategy and policy recommendations and monitoring the Group’s performance against the strategic plan using appropriate metrics and milestones.
ii) Reviews the opportunities and risks of the Group’s three-year plan and, if deemed advisable, approves such plan, including the budget for the following year.
iii) The Board performs periodic reviews of the approved strategy and reviews and discusses results at each of its quarterly meetings to ensure attainment of key objectives and prompt realignment, if judged appropriate.
iv) Reviews and approves material transactions and reorganizations, such as acquisitions, dispositions, mergers, corporate reorganizations, alliances and financing transactions.
2. Risk Management and Capital Management
i) Oversees the identification and monitoring of the principal risks affecting the Group’s business and ensures that the Group’s business strategies and allocations of capital are related to the Group’s Risk Appetite Framework and tolerance.
ii) Ensures that the Group has effective risk management programs and practices that are within the risk tolerance of the Group and that risk management activities have sufficient independence, status and visibility.
iii) Evaluates the Group’s compliance with key risk policies and limits.
iv) At least annually, evaluates and approves the Enterprise Risk Management Policy including the Risk Appetite Framework and the Internal Capital Ratio.
v) Approves the Group’s Investment Policy and investment strategies.
vi) Oversees the Group’s policies and strategies with respect to liquidity, funding and capital management and provides advice and guidance to management on the effectiveness of such policies and strategies.
3. Ethics, Compliance and Governance
i) Sets the tone for the integrity, ethics, compliance and sustainability culture throughout the Group and ensures that the appropriate structures and programs are in place to meet and maintain the highest rules of ethics, compliance and conduct.
ii) Develops the Group’s approach to corporate governance and its corporate governance principles.
iii) To support the Group’s corporate governance objectives, the Board ensures that the Directors, the Group CEO (“CEO”), the Oversight Functions and other executives demonstrate suitability and integrity in line with the high ethical values of the Group and foster a culture of integrity throughout the Group.
iv) Reviews management reports regarding important developments in the relationship between the Group and key regulators, including the Office of the Superintendent of Financial Institutions (“OSFI”), the Autorité des Marchés Financiers (“AMF”), the Prudential Regulation Authority (“PRA”) and U.S. insurance regulators.
v) Reviews the Group’s compliance programs including the Ombudsman’s Office, the Privacy Office and market conduct initiatives.
vi) Reviews the Company’s procedures to monitor its Related Party Transactions and approves Related Party Transactions, as required.
vii) Ensures that there are appropriate procedures in place for the identification and resolution of conflicts of interest.
viii) Oversees and monitors the Group’s environmental, social and governance (“ESG”) and corporate social responsibility initiatives, including with respect to diversity and inclusion.
ix) Oversees and approves the Group’s codes of ethics and conduct.
4. Supervision over Senior Management, Oversight Functions and Compensation and Succession Planning
i) Ensures that the Group is supported by an appropriate organizational structure including a CEO, Oversight Functions as defined by law, and other Senior Executives who have complementary skills and expertise, to ensure the sound management of the business and affairs of the Group and its long-term profitability.
ii) Oversees the Group’s succession planning and talent development.
iii) Develops the annual corporate goals and objectives of the CEO and is responsible for the CEO’s appointment, assessment, compensation and termination (if applicable).
iv) Conducts an annual assessment of the effectiveness and independence of the Oversight Functions and reviews their objectives. Such assessment may include conducting a benchmarking analysis of such functions and processes with the assistance of internal or external advisors.
v) Periodically reviews and approves the respective mandates of the Oversight Functions.
vi) Appoints, assesses and terminates (if applicable) the head of the Oversight Functions.
vii) Oversees the Group’s general approach to human resources and compensation philosophy and reviews, discusses and approves the compensation and benefits plans for employees, management, executives, including the Oversight Functions, and Directors.
5. Pension Plans and Funds
i) Monitors the various aspects of the Group’s Pension Plans (benefits, Financial Statements and actuarial valuation) and the management of their funds (review of policies and approval of strategies and investment reports).
ii) Reviews the governance framework in relation to the management of the Group’s pension plans and pension funds.
6. Board of Directors Structure and Composition
i) Ensures that its own structure and composition are in compliance with applicable legislation and best practices, as determined by the Board, and reviews the size, composition and policies of the Board and its committees with a view to the effectiveness, contribution, skills, suitability, integrity and independence of the Board and of all the directors.
ii) Establishes the appropriate policies and procedures to enable the Board, its committees and individual directors to function independently of management.
iii) On an annual basis, the Board undertakes a self-assessment to evaluate the effectiveness of the Board and committee practices, with the assistance of external advisors, as required.
iv) Identifies potential new Board members and implements and reviews the nomination process for new Board members.
v) Provides orientation for new directors and continuing education opportunities to all Board members.
7. Financial Reporting, Public Disclosure and Internal Controls
i) Reviews and approves the Group’s significant disclosure documents including financial statements and related financial information and oversees the Group’s compliance with applicable audit, accounting, actuarial and reporting requirements.
ii) Ensures that the Group adopts appropriate policies and procedures that provide for timely and accurate disclosure to regulators, shareholders, employees, analysts and the public, that meet all applicable legal and regulatory requirements and that facilitate feedback from stakeholders and shareholder engagement.
iii) Oversees and monitors the integrity and effectiveness of the Group’s internal controls and management information systems. The Board also reviews management’s assertions on internal controls and disclosure control procedures.
iv) Appoints, subject to approval by shareholders, and terminates, if applicable, the external auditor.
i) As part of meeting its responsibilities, the Board is responsible for overseeing the governance and activities of subsidiaries.
ii) The Board is responsible for establishing general Group policies and performing other tasks required by law and regulations. .
V. Access to Independent Consultants
i) The Board and each committee may retain and terminate independent consultants, at the Company’s expense. Individual members of the Board are authorized to engage consultants, at the expense of the Company, in appropriate circumstances.
ii) The Board ensures that consultants are retained only when necessary and that such consultants are retained prudently and without duplication.
iii) The Board will ensure that appropriate policies and procedures are in place to provide for the prudent engagement of consultants.
VI. Committees of the Board and Delegation
i) The Board has established the following committees to assist it in its stewardship role: the Audit Committee, the Risk Management Committee, the Governance and Sustainability Committee, and the Human Resources and Compensation Committee. Subject to applicable law, the Board may establish other Board committees or merge or dispose of any Board committee.
ii) The Board has approved mandates for each Board committee. Such mandates will be reviewed annually and approved by the Board.
iii) The Board has delegated for approval or review the matters set out in each Board committee’s mandate to that committee.
iv) The Board may designate a sub-committee or individual(s) to review any matter the Board can delegate by law.
VII. Board Mandate Review
On an annual basis, and as may otherwise be required, the Board reviews this mandate and approves such changes as are necessary.
Approved by the Board of Directors of Intact Financial Corporation and its Canadian P&C Subsidiaries on August 1, 2022.
Mandate of the Chair of the Board of Directors
I. Mission of the Chair of the Board
The Chair of the Board is responsible for the management, the development and the effective performance of the Board of Directors of the Company (the “Board”) and its committees. The Chair will take all reasonable measures to ensure that the Board and its committees fully execute their mandate and that directors clearly understand and respect the boundaries between the Board and its committees and management responsibilities.
The main responsibilities of the Chair consist in the following:
- manage the affairs of the Board, including ensuring that the Board and its committees are organised properly, function effectively and meet their obligations and responsibilities;
- facilitate the functioning of the Board independently of management (as defined under securities legislation) and maintain and enhance the quality of the Board’s governance and that of the Company;
- act as liaison between the committees of the Board, the CEO and management of the Company (“Management”);
- regularly interface with the CEO on performance and governance issues, including providing feedback from the Board; and
- lead the Board in the execution of its obligations and responsibilities to the Company for the benefit of all the Company’s shareholders.
The Chair is a non-executive Chair, appointed by the Board of directors, among the members of the Board of directors of the Company.
III. Specific responsibilities
Among responsibilities pertaining to the Chair’s role, the Chair has the following specific responsibilities:
1. Board Effectiveness
i. Taking all reasonable steps to ensure that the Board works as a cohesive team and providing the leadership essential to achieve this;
ii. Arranging for adequate resources being available to the Board (in particular timely and relevant information) to support its work;
iii. Taking all reasonable steps to ensure that a process is in place for the assessment on a regular basis of the effectiveness of the Board and its committees and the contribution of each director.
2. Board Management
i. Chairing Board meetings and being a member or a permanent guest of the Board committees;
ii. Setting the agenda of each Board meeting, in consultation with the CEO and the Corporate Secretary of the Company (the “Secretary”);
iii. Taking all reasonable steps to ensure that the conduct of Board meetings facilitates discussions and provides adequate time for effective study and discussion of the business under consideration while, in collaboration with the CEO, overseeing that the focus of the Board’s attention is on strategically important issues;
iv. Proposing and implementing procedures to ensure that the Board conducts its work effectively, including, coordinating the activities with committee chairs, periodical review of committee structure and composition and regular reporting on the work of each committee to the Board;
v. Taking all reasonable steps to ensure that independent directors meet periodically without Management and other non-independent directors present, attend such meetings as appropriate and discuss the results of such meetings with the CEO;
vi. In accordance with the guidance of the Governance and Sustainability Committee (that is also the Nominating Committee), and in collaboration with the CEO, approaching potential Board candidates to explore their interest in joining the Board.
3. Interaction with Committees of the Board
i. Meeting with the committee chairs on a regular basis and, when appropriate, act as liaison between the committee chairs and the CEO and Management;
ii. Discussing any issue related to the committee functions or Management with committee chairs.
4. Interaction with CEO and Management
i. Taking all reasonable steps (through processes, policies, mandates and reporting) to ensure that the expectations of the Board toward Management, and the expectations of Management toward the Board, are clearly expressed, understood and respected;
ii. Acting as liaison between the Board and Management;
iii. Acting in an advisory capacity to the CEO and to other senior management members in all matters concerning the interests and Management of the Company, including building a healthy governance culture.
5. Representing the Interests of the Company for the Benefit of all Shareholders
i. Chair the meetings of shareholders and be available to answer questions and participate in any matter concerning shareholders;
ii. In conjunction with Management, respond to shareholders’ concerns and report to the Board concerns, when appropriate;
iii. Lead the Board in the execution of its obligations and responsibilities to the Company for the benefit of all the Company’s shareholders.
6. Engaging with Shareholders and Other Stakeholders
i. Support an open and transparent process for shareholders to contact and engage with the Board;
ii. At the request of the Board, and with the agreement of the CEO, representing the Company to external groups and other stakeholders, including local community groups, associations and governments.
7. Board Independence and Governance and Assessment
i. Be knowledgeable of, and keep informed with respect to, corporate governance practices, including corporate governance practices of other comparable companies and lead the adoption of “best practices”, where appropriate, to maintain a leadership level of governance practices;
ii. In conjunction with the CEO and the Secretary, facilitate the effective and transparent interaction of Board members and Management;
iii. Meet with all Board members and seek their feedback on Board and committee performance and other matters;
iv. In conjunction with the Governance and Sustainability Committee, assess performance of directors collectively and individually, including the committee chairs and, where applicable, provide individual performance feedback to Board members;
v. Provide feedback and input to the committee chairs on governance and other matters.
IV. Performance Assessment
The Governance and Sustainability Committee annually supervises the performance assessment of the Board Chair and reports to the Board on such assessment.
Approved by the Board of Directors of Intact Financial Corporation and its Canadian P&C Subsidiaries on July 26, 2022.
The Audit Committee assists the Board of Directors in its oversight of (i) the integrity, fairness and completeness of the Company’s financial statements and financial information; (ii) the accounting and financial reporting process; (iii) the qualifications, performance and independence of the external auditors; (iv) the performance of the internal audit function; (v) the quality and integrity of internal controls and; (vi) actuarial practices of the Company.
Governance and Sustainability Committee
The Governance and Sustainability Committee (the “GSC Committee”) ensures a high standard of governance, compliance, and ethics in the Company, including its pension funds and that the Company meets its legal requirements and engages in best practices as determined by the Board of Directors.
In this regard, the GSC oversees: (i) the governance framework of the Company and of its pension plans, (ii) the compliance framework, (iii) the compliance programs of the Company which include related party transactions, market conduct programs and policies, as well as the implementation of corporate compliance initiatives.
Human Resources and Compensation Committee
The Human Resources and Compensation Committee assists the Board of Directors in fulfilling its governance supervisory responsibilities for strategic oversight of the Company’s human capital, including organization effectiveness, succession planning and compensation, and the alignment of compensation with the Company’s philosophy and programs consistent with the overall business objectives of the Company. Compensation includes base salaries, benefits, pension plans and incentive programs of the employees, management and executives.
Risk Management Committee
The Risk Management Committee assists the Board of Directors with its oversight role with respect to the management of the Company in order to build a sustainable competitive advantage, by fully integrating the Enterprise Risk Management Policy into all business activities and strategic planning of the Company and its subsidiaries and operations, including its pension funds.
The Risk Management Committee defines the Company’s risk appetite while also monitoring the risk profile and performance of the Company relative to its risk appetite.
The Risk Management Committee also oversees the identification and assessment of the principal risks facing the Company and the development of strategies to manage those risks. The principal risks include strategic risk, insurance risk, financial risk and operational risk.
The Risk Management Committee monitors compliance with risk management policies implemented by the Company and ensures an appropriate balance of risk and return in pursuit of the company’s strategic business objectives.