A Director is independent if that Director, or an immediate family member, has no direct or indirect material relationship with the Company, its subsidiaries or its auditor, and is not a partner, officer or significant shareholder of an entity that has a material relationship with the Company.
The Compliance Review and Corporate Governance Committee (“CRCG 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 is involved.
All members of the Board of Directors, except the Company’s CEO, 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.
Policy on External Positions and Interlocking
The Board of Directors has adopted a Policy on External Positions and Interlocking which sets out a procedure to be followed before a Director can be appointed to a high-profile position at another organization and includes a limitation on the number of public company board directorships that can be held by Directors of the Company at one time. The policy sets out that no Director may simultaneously sit on more than four (4) boards of publicly listed companies, including their service as a Director of the Company.
It is the Company’s view that Directors should be independent of Management but also of each other. If two (2) Directors sit on more than one (1) 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/ her fellow Director. In such a situation, on the second board where he/she is expected to serve as an independent non-related director, his/her independence may be compromised. The Chair of the Board of Directors or the Chair of the CRCG Committee will take into account any Director Interlocks before accepting that a Director be appointed to the board of another organization, whether a private or publicly listed company, or a not-for-profit organization. No Director Interlock will be accepted should there be a conflict of interest. The Secretary’s Office provides the CRCG Committee with a register of the existing interlocking relationships on an annual basis. The Board of Directors has also adopted a policy providing that no more than one-third of the members of the Human Resources and Compensation Committee shall be sitting chief executive officer(s) of another company.
As of the date of the Company’s 2022 Annual Meeting of Shareholders, there were no Director Interlocks among the candidates proposed for election.
Director Term Limits
The Board of Directors has determined that a mandatory retirement age is not appropriate for the Company; however, the CRCG Committee has established a planned retirement schedule for all Directors as part of the succession planning process for the Board of Directors.
In 2015, the Board of Directors implemented a tenure and term of office framework which states the maximum period of service for new Directors (excluding the CEO) as 12 years, to be served in successive one (1) year terms, though this term remains open to extension. However, term limits do not provide Directors with a guarantee of tenure. The Company is continuing to transition to the tenure and term of office framework and aims to fully comply with the maximum period of service of 12 years as new Directors are named and the Board of Directors is refreshed.
The CRCG Committee is responsible for reviewing the composition of the Board of Directors on an annual basis, proposing new Directors and administering the tenure limit and term of office framework. The CRCG Committee will exercise discretion judiciously to ensure that the Board of Directors remains composed of independent Directors possessing the required skills and in-depth knowledge of the Company.
For additional information regarding Director Independence, our Policy on External Positions and Interlocking, and Director term limits and other mechanisms of board renewal, please see our Management Proxy Circular.
Shareholder Engagement Policy
I. How the Board of Directors and Management communicate with shareholders
1. Board of Directors
Intact Financial Corporation (the “Company”) is committed to having regular and constructive engagement directly with its shareholders to allow and encourage shareholders to express their views on governance matters directly to the Board of Directors outside of the annual meeting. The Board of Directors will annually communicate information about the Board of Directors and individual directors, the Company’s corporate governance and executive compensation practices through the Company’s management proxy circular.
The Board of Directors encourages shareholder participation at the Company’s annual shareholder meeting, as it provides a valuable opportunity to discuss the Company, its corporate governance, and other important matters. The Board of Directors also encourages shareholder participation at informal meetings throughout the year as necessary.
Our website also provides extensive information about the Board of Directors, its mandate, the board committees and their mandates, and our directors.
Management communicates with shareholders in many ways. The primary form of communication is through the Investor Relations team, which communicates with shareholders on a daily basis. Other means of communications with the shareholders include the Company’s annual report, annual information form, quarterly reports and earnings calls, social impact report, annual meeting of shareholders, news releases, website, presentations at investor and industry conferences and other meetings.
The following are the primary spokespeople to shareholders and the investment community:
- Chief Executive Officer;
- Executive Vice-President & Chief Financial Officer; and
- Vice-President, Investor Relations
They meet periodically with investor representatives to discuss the financial and business performance of the Company.
3. Live Broadcasts
Management hosts live webcasts and conference calls of quarterly earnings releases which are accessible to shareholders and other interested parties and are archived on our website for a year. The company’s annual meeting of shareholders is also broadcasted via live webcast where shareholders may submit questions.
II. How shareholders can communicate with the Board of Directors and Management
1. Board of Directors
In between annual meetings, the Company supports an open and transparent process for shareholders to contact the Board of Directors, including the chairs of our board committees, through the office of the Secretary of the Company.
Shareholders are encouraged to be specific in their communications such that inquiries can be directed to appropriate contacts and replied to efficiently and effectively.
The Secretary has been designated by the Board of Directors as its agent to receive and review communications and meeting requests addressed to directors. The Secretary will determine whether the communication received is a proper communication to the Board of Directors or should be addressed by Management.
The Board of Directors has the right to decline requests for meetings for any reason it deems appropriate, including where the proposed topics are not appropriate and in order to limit the number of such meeting requests to a reasonable level and prioritize acceptances based on the interests of all shareholders. The Chairman of the Board of Directors will determine which directors will attend any such meeting. Topics suitable for Board of Directors – shareholder communications include:
- Board of Directors structure, composition and performance;
- Chief Executive Officer performance;
- executive compensation;
- succession planning;
- employee engagement and talent retention;
- diversity and inclusion;
- climate transition strategy;
- corporate governance practices and disclosure;
- oversight of risks, including ESG-related risks;
- capital strategic decisions;
- material strategic decisions; and
- overall corporate performance.
If Management receives any questions that the Board of Directors should be made aware of, the information will be passed on to the Secretary to consider for communication to the Board of Directors.
The Board of Directors will endeavour to respond to all appropriate correspondence in a timely manner. On a quarterly basis, the Secretary reports to the Compliance Review and Corporate Governance Committee on all communications sent to the Board of Directors and reviews and considers responses in relation to corporate governance matters.
Shareholders or other stakeholders of the Company may communicate with the Board of Directors by mail, e-mail or telephone by contacting the Company’s Corporate Secretary.
EVP and Chief Legal Officer
Intact Financial Corporation
2020, boul. Robert-Bourassa, 6th floor
Montréal, Québec H3A 2A5
Phone: 514-985-7111 x 83131 or 1-888-221-7111 (toll-free within North America)
Questions or concerns regarding the Company’s general business operations, financial results, strategic direction and similar matters are most appropriately addressed by Management.
Shareholders may also make their views known through individual voting for directors, an annual say-on-pay advisory vote and other matters submitted to shareholders for approval. In addition, shareholders may put forward shareholder proposals in accordance with applicable rules and procedures.
Management will endeavour to respond to all appropriate correspondence in a timely manner.
Shareholders or other stakeholders of the Company may communicate with Management by mail, e-mail or telephone by contacting the Company’s Investor Relations department.
Intact Financial Corporation
Investor Relations Department
700 University Avenue, Suite 1500
Toronto, Ontario M5G 0A1
Phone: (416) 341-1464 x 41004 or 1-8888-221-7111 (toll-free within North America)
The Board of Directors and Management recognize that shareholder engagement is an evolving practice in Canada and globally and will review this policy periodically to ensure that it is effective in achieving its objectives.
A copy of this policy is available on the Company’s website.
Advance Notice By-law
1. Advance notice of nominations of directors
(a) Subject to the laws governing the Corporation and the articles, only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation. Nominations of persons for election to the board may be made at any annual meeting of shareholders, or at any special meeting of shareholders, if one of the purposes for which the special meeting was called was the election of directors. Such nominations may be made in the following manner:
- by or at the direction of the board, including pursuant to a notice of meeting;
- by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the Act, or a requisition of the shareholders made in accordance with the Act; or
- by any person (a “Nominating Shareholder”)
A. who, at the close of business on the date of the giving of the notice provided for below in this By-law No.2 of the Corporation (the “By-law”) and on the record date for notice of such meeting, is entered in the securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneﬁcially owns shares that are entitled to be voted at such meeting and provides evidence of such beneﬁcial ownership to the Corporation; and
B. who complies with the notice procedures set forth below in this By-law.
(b) In addition to any other applicable requirements, for a nomination to be made by a Nominating Shareholder, the Nominating Shareholder must have given timely notice thereof in proper written form to the Secretary of the Corporation at the principal executive ofﬁces of the Corporation in accordance with this By-law.
(c) To be timely, a Nominating Shareholder’s notice to the Secretary of the Corporation must be given:
- in the case of an annual meeting (including and annual and special meeting) of shareholders, not less than 30 days before the date of the meeting of shareholders; provided, however, that in the event that the annual meeting of shareholders is to be held on a date that is less than 50 days after the date (the “Notice Date”) on which the ﬁrst public announcement of the date of the annual meeting was made, notice by the Nominating Shareholder may be given not later than the close of business on the 10th day following the Notice Date;
- in the case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the close of business on the 15th day following the day on which the ﬁrst public announcement of the date of the special meeting of shareholders was made.
(d) To be in proper written form, a Nominating Shareholder’s notice to the Secretary of the Corporation must set forth:
- as to each person whom the Nominating Shareholder proposes to nominate for election as a director (the “Proposed Nominee”):
(A) the name, age, province or state and country of residence of the Proposed Nominee;
(B) the principal occupation, business or employment of the Proposed Nominee, both at present and within the ﬁve years preceding the notice;
(C) the number of securities of each class of voting securities of the Corporation or its subsidiaries which are beneﬁcially owned, or controlled or directed, directly or indirectly, by the Proposed Nominee as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice;
(D) a description of any agreement, arrangement or understanding (ﬁnancial, compensation or indemnity related or otherwise) between the Nominating Shareholder and the Proposed Nominee, or any afﬁliates or associates of, or any person acting jointly or in concert with the Nominating Shareholder or the Proposed Nominee, in connection with the Proposed Nominee’s election as director;
(E) whether the Proposed Nominee is party to any existing or proposed relationship, agreement, arrangement or understanding with any competitor of the Corporation or its afﬁliates or any other third party which may give rise to a real or perceived conﬂict of interest between the interests of the Corporation or any of the Corporation’s Affiliates and the interests of the Proposed Nominee;
(F) whether the Proposed Nominee is a “resident Canadian” within the meaning of the Act; and
(G) any other information relating to the Proposed Nominee that would be required to be disclosed in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws.
- as to the Nominating Shareholder giving the notice, any proxy, contract, arrangement, understanding or relationship pursuant to which such Nominating Shareholder has any rights or obligations relating to the voting of any securities of the Corporation and any other information relating to such Nominating Shareholder that would be required to be made in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws; and
- a written consent duly signed by each Proposed Nominee to being named as a nominee for election to the board and to serve as a director of the Corporation, if elected.
The Corporation may require that any Proposed Nominee furnish such other information as may reasonably be required by the Corporation to comply with requirements of the Office of the Superintendent of Financial Institutions (Canada) relating to assessing the suitability of directors and potential changes to the board, determine the eligibility of such Proposed Nominee to serve as an independent director of the Corporation, or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such Proposed Nominee.
(e) No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the provisions of this By-law; provided, however, that nothing in this By-law shall be deemed to preclude discussion by a shareholder (as distinct from the nomination of directors) at a meeting of shareholders of any matter in respect of which it would have been entitled to submit a proposal pursuant to the provisions of the Act. The Chair of the meeting of shareholders shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in this By-law and, if any proposed nomination is not in compliance with this By-law, to declare that such defective nomination shall be disregarded.
(f) For purposes of this By-law:
- ‘‘Act’’ means the Canada Business Corporations Act, or any statute that may be substituted therefor, as from time to time amended;
- ‘‘Affiliate’’, when used to indicate a relationship with a specific person, shall mean a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified person;
- “Applicable Securities Laws” means the applicable securities legislation of each relevant province and territory of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commission and similar regulatory authority of each province and territory of Canada; and
- “public announcement” means disclosure in a press release reported by a national news service in Canada, or in a document publicly ﬁled by the Corporation under its proﬁle on the System for Electronic Document Analysis and Retrieval at www.sedar.com.
Terms defined in By-law No.1 of the Corporation and used herein, unless otherwise defined herein or the context otherwise requires, shall have the same meaning herein as in By-law No.1 of the Corporation.
(g) Notwithstanding any other provision of this By-law, notice given to the Secretary of the Corporation pursuant to this By-law may only be given by personal delivery, facsimile transmission (at such contact information as set out on the Corporation’s issuer proﬁle on the System for Electronic Document Analysis and Retrieval at www.sedar.com) or electronic mail (to firstname.lastname@example.org), and shall be deemed to have been given and made only at the time it is served by personal delivery or email (at the aforesaid address) or sent by facsimile transmission (provided that receipt of conﬁrmation of such transmission has been received) to the Secretary of the Corporation at the address of the principal executive ofﬁces of the Corporation; provided that if such delivery or electronic communication is made on a day which is not a business day or later than 5:00 p.m. (Eastern Time) on a day which is a business day, then such delivery or electronic communication shall be deemed to have been made on the subsequent day that is a business day.
(h) Notwithstanding the foregoing, the board may, in its sole discretion, waive any requirement in this By-law.
2. Effective date
This By-law shall come into force when confirmed by the Shareholders of the Corporation.
ADOPTED by the Board on February 7, 2017
AMENDED by the Board on April 19, 2017
CONFIRMED by the shareholders on May 3, 2017