Board of Directors
The Board of Directors up for election is comprised of 11 directors. The Board of Directors considers six of them to be “independent” of the Corporation. Messrs. Alain Bouchard, Richard Fortin, Réal Plourde, Jacques D’Amours and Brian Hannasch are not independent directors. Mr. Jean Élie was nominated by Metro Inc., a significant shareholder, but is not otherwise related to the Corporation or Metro. The Board does consider Mr. Jean Élie to be an independent director given that the Corporation does not have significant business dealings with Metro and that Metro does not control the Corporation. The five other directors, Messrs. Desrosiers, Rabinowicz and Turmel and Mrs. Kau and Mrs. Bourque, are independent directors given that they do not have any business interests or other relationships with the Corporation or its principal shareholders.
The independent member of the Board of Directors holds regularly in-camera meetings following each scheduled Board meetings. During the latter non-independent directors and members of management are not in attendance.
The Founder and Executive Chairman of the Board is not an independent director. Therefore, the Board of Directors has established procedures enabling it to function independently of management, including the appointment of an unrelated director to act as Lead Director. The Lead Director’s responsibilities include the following:
- Ensure that the responsibilities of the Board of Directors are well understood by both the Board of Directors itself and management, and that the boundaries between the responsibilities of each are clearly understood and observed.
- Ensure that the resources available to the Board of Directors (especially up-to-date and relevant information) are adequate and enable it to perform its responsibilities.
- Adopt, together with the Founder and Executive Chairman of the Board, procedures and meeting schedules so that the Board of Directors and its committees can effectively and efficiently accomplish their work.
- Ensure that duties assigned to each committees of the Board are carried out effectively and that the results are communicated to the Board of Directors.
Mandate of the Board of Directors
The Board of Directors oversees the Corporation’s management of its commercial activities and internal affairs with a view to increasing the long-term return on shareholder equity. The Board makes major policy decisions and reviews the performance and efficiency of the management team entrusted with the responsibility for administering the Corporation’s day-to-day business.
In accordance with the Business Corporations Act (Québec) and its By-Laws, the Board of Directors may delegate certain tasks and responsibilities to board committees. However, such delegation does not remove the board’s general management responsibilities of the Corporation.
In addition to making decisions that fall within its jurisdiction, in accordance with the law, the main responsibilities of the Board of Directors are as follows:
A. Strategic planning:
- Revising and approving the Corporation’s strategic plan and priorities while taking into account opportunities and risks, the Corporation’s financial and tax strategy and its business plan.
- Revising and discussing the Corporation’s strategic plan and priorities during an annual meeting with senior management.
- Evaluating the Corporation’s performance with respect to the strategic plan and business plan and, in particular, assessing the Corporation’s operating results based on the established objectives.
B. Human resources:
- Ensuring that the President and Chief Executive Officer and other members of senior management create a culture of integrity throughout the Corporation.
- Determining the size and structure of the Board of Directors and its committees based on the expertise, skills and personal qualities required of the members of the Board in order to ensure adequate decision making.
- Approving and submitting the list of candidates for the position of director, to be voted on by shareholders, as proposed by the Human Resources and Corporate Governance Committee.
- Ensuring effective planning regarding the succession of the Corporation’s senior managers, including their appointment and compensation.
- Ensuring that an annual performance evaluation is carried out for the Chief Executive Officer and other members of senior management, while taking into account the Board’s expectations and the objectives set by the Human Resources and Corporate Governance Committee.
C. Finance and internal control procedures:
- Revising the main risks associated with the Corporation’s activities, as identified by management, and ensuring that they are managed effectively. The main risks are revised during the quarterly meetings of the Audit Committee and the Board of Directors.
- Ensuring the integrity of the quality of the Corporation’s internal control and management systems.
- Adopting a communications policy that involves the full disclosure of all important matters related to the Corporation’s activities, in particular those dealing with how the Corporation interacts with analysts and the public. The communications policy must also outline measures to take to avoid the selective disclosure of information.
- Developing the Corporation’s governance policies and practices and revising governance structures and procedures with respect to the governance standards in effect and in accordance with the best practices considered applicable in this instance.
- Approving the appointment of the Lead Director based on the recommendation of the Human Resources and Corporate Governance Committee.
- Developing and approving the job descriptions for the Chairman of the Board and committee presidents as well as for the Lead Director.
- Adopting a written code of conduct and ethics that applies to the Corporation’s officers and employees and revising and modifying it where necessary. The Board of Directors is responsible for ensuring that the code is respected. The Board, or a Board committee, may grant dispensations to directors or senior management with regard to the code.
- Implementing, in co-operation with the Lead Director, a procedure to follow for evaluating the effectiveness and contribution of the Board and its members as well as the Board committees and their members.
- Assessing and approving the contents of important disclosure documents, namely the Annual Information Form, the Management Proxy Circular, as well as any document that the Corporation must disclose or file with the appropriate regulatory authorities.
- Ensuring that the appropriate measures are implemented to promote communication with clients, employees, shareholders, investors and the public.
The Board of Directors has developed Charters for the Audit and Human Resources and Corporate Governance committees of the Board, as well as respective position descriptions for the Executive Chairman of the Board, for the Lead Director, for the Committee chairs and for the President and Chief Executive Officer to complement the Board of Directors’ Charter.
Orientation and Continuing Education
The Corporation’s orientation process for all new members of the Board of Directors encompasses presentations made by various officers and key executives primarily related to the Corporation’s organizational structure and the nature and operation of its businesses both in North America and in Europe. In addition, an overall view of the role of the Board and its Committees is discussed as well as the contribution individual directors are anticipated to make. All new directors are provided with a director’s guide that contains up-to-date documentation including, among other things, basic information on the Corporation and its industry. The director’s guide is updated on an annual basis and recirculated to all the members of the Board.
The Corporation’s continuing education process is overseen by the Lead Director who ensures that the directors have access to continuing education and information on an ongoing basis. The Corporation encourages its directors to attend seminars and other educational programs and to report back to the Board on the quality of such programs.
Directors also interact with executives and senior management at every Board meeting where they are exposed to a wide variety of presentations on business growth strategy and on the overall outlook of the Corporation’s worldwide operations and challenges. In addition, throughout the year, the directors are provided with educational reading materials and presentations on corporate governance, financial strategy, risk assessment, disclosurerequirements as well as other topics. The Corporation holds a special meeting every year dedicated to providing the directors with an in depth training session on its business activities allowing them to increase their knowledge of the industry and business activities globally.
Ethical Business Conduct
The Corporation has in place a written Code of Ethics and Conduct for its officers and employees (the “Code”). The Code may be consulted on the Corporation’s profile on SEDAR at www.sedar.com or the website http://corpo.couche-tard.com. The Human Resources and Corporate Governance Committee is responsible for the Code’s implementation within the Corporation. The Code is distributed and acknowledged by each employee of the Corporation upon hire. The Code pertains namely to conflict of interest, the use of the Corporation’s assets, fair treatment of clients, suppliers, competitors and other Corporation employees. In addition, the Code includes a communication policy the objective of which is to ensure that disclosure to the investing public regarding the Corporation is made in a timely manner by the Corporation’s authorized representatives, in accordance with the applicable statutory and regulatory requirements. Pursuant to the Code, all employees of the Corporation shall report any activity which seems not to be in line with the Code or laws and regulations.
The Corporation has adopted a code of ethics and conduct for its board members which stipulates namely that a director who finds himself in a conflict of interest during any Board of Directors or Committee meeting must immediately declare his/her interest and refrain from participating in any discussion about the conflicting issue or from voting thereon.
Nomination of Directors
The Board of Directors has delegated to the Human Resources and Corporate Governance Committee, the task of evaluating and recommending to the Board of Directors new nominees for the position of Director. The Committee determines the skills, abilities and personal attributes required of new directors with a view to creating value for shareholders. Occasionally, the services of a recruiting firm may be retained. The potential candidates are interviewed by the Human Resources and Corporate Governance Committee, the Lead Director and the Founder and Executive Chairman and, if needed, by the board members. Following this process, the Human Resources and Corporate Governance Committee will make its recommendations to the Board of Directors.
The Human Resources and Corporate Governance Committee is exclusively comprised of independent directors. The members are Mrs. Mélanie Kau, Mrs. Nathalie Bourque and Mr. Daniel Rabinowicz. By their experience, education and involvement in the business world, two of the three members are experienced in compensation matters.
This Committee, together with the Lead Director and the Founder and Executive Chairman of the Board of Directors, is responsible for proposing policies and practices for the compensation of directors to ensure that compensation realistically reflects the responsibilities and risks involved in carrying out their mandate as directors, as well as means for encouraging directors to hold shares in the Corporation. The Committee takes into account, in particular, the work load and comparative figures on the compensation of board members of a group of comparable Canadian companies with North American operations. During the fiscal year 2014, in determining compensation for executive officers, the Committee reviewed a survey of compensation practices of a peer group of Canadian and U.S. companies in the retail and manufacturing (food) industries, to benchmark compensation against the median (50th percentile) of the peer group. Such survey is reviewed every two years. Following such review, the Committee recommended a Board compensation policy, which was approved by the Board.
The Human Resources and Corporate Governance Committee is established by the Board of Directors to assist the Board in fulfilling its responsibilities relating to matters of human resources and corporate governance, namely compensation, establishing succession plan and development of senior management. The Committee has the responsibility for evaluating and making recommendations to the Board regarding the compensation of the Corporation’s executives and the equity-based and incentive compensation plans, policies and programs of the Corporation. For more details refer to section “Executive Compensation” of this proxy circular.
Other Board Committees
Information relating to the Audit Committee of the Corporation may be found under section “Audit Committee Disclosure” of the 2014 Annual Information Form, which is hereby incorporated by reference.
Board, Committee and Member Assessments
The Human Resources and Corporate Governance Committee examines on an annual basis, together with the Founder and Executive Chairman of the Board and the Lead Director, the performance and contribution of directors nominated for re-election and ensures that they are still eligible pursuant to applicable laws. The Committee reviews the size of the Board on an annual basis and reports to the Board. In addition, the Lead Director meets with each director on a personal basis to assess the operation of the Board and committees, the participation of individual directors, the adequacy of information given to directors and communication between the Board and Management. Thereafter, the Lead Director reports to the Human Resources and Corporate Governance Committee.