The Board of Directors (the “Board”) of RONA inc. (“RONA” or the “Corporation”) considers good corporate governance practices to be an important factor in the overall 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 compensation policy.
Learn more about the Compensation policy (see page 25, 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 chair of the Development Committee must also be independent. 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 Board Chair and committee chair as the case may be.
In accordance with applicable law and RONA Corporation 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. A director who is in a potential conflict of interest must not attend any part of the meeting during which the matter is discussed or 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, the Human Resources and Compensation Committee and the Development 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.
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.
The Board of Directors believes that the economic interests of directors should be aligned with those of the Corporation’s shareholders. To achieve this, all non-executive directors are expected to own a significant amount of the Corporation’s common shares and/or deferred share units. The Board has therefore adopted a formal stock ownership policy pursuant to which each non-executive director is expected, within five (5) years, to own a number of common shares (or deferred share units) equivalent in value to four (4) times the annual Board retainer and to maintain ownership thereof for the duration of his or her term of office.
The Corporation has adopted a deferred share unit plan for the non-executive directors to help them meet the stock ownership policy requirements. Such units are redeemed and paid in cash by the Corporation when a director ceases to act as such.
The mandate of the Nominating and Governance Committee provides that this Committee is responsible for implementing an orientation and continuing education policy for directors. New directors receive an extensive orientation on the Corporation’s business, operations, governance systems and financial position.
In addition, the Board Chair 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 and Business Conduct that governs the behaviour 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.
These guidelines will be periodically reviewed by the Board and may be amended from time to time.