The Board of Directors (the “Board”) of RONA inc. (“RONA” or the “Corporation”) is of the view that maintaining effective corporate governance practices is an important factor which contributes to the general success of the Corporation.
The Corporation continuously reviews its corporate governance practices in order to best comply with and exceed Canadian securities legislation and regulations and the disclosure and listing requirements of the Toronto Stock Exchange. The Board is committed to adhering to the highest corporate governance standards and these guidelines reflect that commitment:
Our Corporate Governance Guidelines include the following:
The Board has adopted a majority voting policy. Pursuant to such policy, a nominee for election as a director who receives a greater number of votes "withheld" than votes "for", with respect to the election of directors by shareholders, shall promptly tender his resignation to the Chairman of the Board following the meeting of shareholders at which the director is elected.
Learn more about the Majority Voting Policy [PDF].
The Board has adopted a compensation policy.
Learn more about the Compensation policy (see page 27, Compensation Discussion and Analysis) [PDF].
The Board is composed of a majority of individuals who qualify as independent directors, as determined by the Board. The Nominating and Governance Committee, the Audit Committee and the Human Resources and Compensation Committee must be composed solely of independent directors (as determined by the Board). The independent Board and committee members meet together and separately from management during each regularly scheduled Board and committee meeting under the leadership of the Corporation's Chairman of the Board and committee chair as the case may be.
In addition, each member of the Audit Committee must be financially literate. In determining whether or not a director is independent or financially literate, the Board follows the applicable Canadian securities legislation.
In accordance with applicable law and RONA company policies, each director is required to disclose to the Board any potential conflict of interest he or she may have regarding a matter before the Board or a committee thereof at the beginning of the applicable Board or committee meeting. If considered appropriate, the Chairman of the Board or the chair of a Board committee, as applicable, may invite the director to leave the room during any discussion concerning such matter. A director who is in a potential conflict of interest must not participate in a vote on such matter.
The Board is responsible for the supervision of the management of the Corporation's business and affairs, with the objective of maximizing long-term corporate value. Although management conducts the day-to-day operations of the Corporation, the Board has a duty of stewardship and regularly assesses and monitors management's performance. The responsibilities of the Board are further detailed in its mandate.
The Board has adopted formal mandates for the Audit Committee, the Nominating and Governance Committee and the Human Resources and Compensation Committee. These mandates describe the responsibilities of each committee.
The Board has also adopted formal mandates for the Chairman of the Board and the chairs of each of the Board committees, as well for the President and Chief Executive Officer of the Corporation.
The Corporation expects its directors to commit sufficient time and effort to the Corporation's business. The directors are expected to attend all Board meetings and review in advance all meeting materials. The Board also ensures that prospective Board candidates fully understand the role of the Board and its committees and the contribution that individual directors are expected to make, including, in particular, the personal commitment that the Corporation expects of its directors.
Learn more about the Mandates:
The Nominating and Governance Committee assesses and reviews annually the performance and effectiveness of the Board, Board committees, the Board and committee chairs and individual directors, the whole in accordance with its mandate.
The compensation of directors is determined by the Board based on the reviews and recommendations of its Nominating and Governance Committee and its Human Resources and Compensation Committee.
The Board believes it is important that directors demonstrate their commitment to the Corporation's growth through equity ownership. Consequently, the Board adopted shareholding guidelines pursuant to which each non-executive director of the Corporation, including the Chairman of the Board, is required, within the latest of 5 years of his or her election to the Board to acquire common shares and/or deferred share units of the Corporation having a combined value of at least 4 times his or her director annual retainer (excluding committee chair retainers and director meeting fees). Each non-executive director is required to continue to hold such value in common shares and/or deferred share units throughout the remainder of his or her tenure as a director.
The Corporation has adopted a deferred share unit plan for the non-executive directors to help them meet the shareholding guidelines'requirements. Such units are redeemed and paid in cash by the Corporation when a director ceases to act as such.
The Nominating and Governance Committee is responsible for implementing an orientation and continuing education policy for directors.
New directors are provided with an extensive information package on the Corporation's business, its strategic and operational business plans, its operating performance, its governance system and its financial position. Also, new directors are invited to meet individually with the Chairman of the Board, the President and Chief Executive Officer and other senior executives, if necessary, to discuss these matters.
In addition, the Chairman of the Board ensures that Board members have access to education and information on an ongoing basis and as required. Senior management makes regular presentations to the Board on the main areas of the Corporation's business. Directors are also encouraged to tour the Corporation's various stores and premises.
The Board or any committee of the Board may, as the need arises, engage any outside advisors to assist in carrying out its duties, set the fees and other conditions of their engagement and obtain the necessary funds from the Corporation to pay such fees.
The Board monitors and assesses the performance of the President and Chief Executive Officer (the "CEO") and ensures that processes are in place for the assessment of other executive officers reporting directly to him. The Board, directly and through its Human Resources and Compensation Committee, is responsible for overseeing the existence of appropriate mechanisms regarding succession planning for the Corporation's senior management. It chooses the CEO and approves the appointment of other executive officers of the Corporation.
The Board has adopted a Code of Ethics that governs the behavior of the Corporation's directors, officers and employees.
Learn more about the Code of Ethics [PDF].
Complaints about accounting, internal accounting controls or auditing matters can be confidentially and anonymously submitted in accordance with our Policy on complaints regarding accounting, internal accounting controls or auditing matters.
Shareholders and other interested parties may communicate confidentially with the Chairman of the Board or with non-management directors as a group by mail at 220 chemin du Tremblay, Boucherville, Quebec, J4B 8H7 or by e-mail at [email protected]. Communications received in this manner will be processed in accordance with procedures approved by the Board's independent directors.
These guidelines will be periodically reviewed by the Board and may be amended from time to time.