Audit Committee Charter
1. Purpose and Composition
The purpose of the Audit Committee (the “Committee”) of Power Corporation of Canada (the “Corporation”) is to assist the Board of Directors (the “Board”) in reviewing:
1.1 the Corporation’s financial disclosure;
1.2 the qualifications and independence of the Corporation’s external auditor; and
1.3 the performance of the external auditor.
The Committee of the Corporation shall be composed of not less than three directors of the Corporation, all of whom shall be independent and financially literate within the meaning of the Canadian Securities Administrators National Instrument 52-110.
2. Procedural Matters
In connection with the discharge of its duties and responsibilities, the Committee shall observe the following procedures:
2.1 Meetings - The Committee shall meet at least four times every year, and more often if necessary, to discharge its duties and responsibilities hereunder.
2.2 Appointment - The Members of the Committee shall be appointed by the Board at the meeting of the Board following each annual meeting of shareholders and shall serve until their successors shall be duly appointed and qualified or until their earlier death, resignation or removal.
2.3 Advisors - The Committee shall have the authority to engage independent counsel and other advisors as it determines necessary to carry out its duties and to set and pay, at the Corporation’s expense, the compensation of such advisors.
2.4 Quorum - A quorum at any meeting of the Committee shall be a majority of the Committee members.
2.5 Secretary - The Chair of the Committee, or any person appointed by the Chair of the Committee, shall act as secretary of meetings of the Committee.
2.6 Calling of Meetings - A meeting of the Committee may be called by the Chair of the Committee, by the Chair of the Board, by the external auditor of the Corporation, or by any member of the Committee, on not less than 48 hours’ notice to the members of the Committee specifying the place, date and time of the meeting. Meetings may be held at any time without notice if all members of the Committee waive notice. If a meeting of the Committee is called by anyone other than the Chair of the Board, the person(s) calling such meeting shall so inform the Chair of the Board and the Chair of the Committee.
3. Duties and Responsibilities
Financial Disclosure
3.1 The Committee shall:
1. unless otherwise determined by the Board, approve the Corporation’s interim management’s discussions and analyses (pursuant to delegation of authority by the Board);
2. review the Corporation’s:
a. interim and annual financial statements;
b. annual management’s discussions and analyses;
c. interim and annual earnings press releases; and
d. other documents containing audited or unaudited financial information, at its discretion;
and report thereon to the Board before such documents are approved by the Board and disclosed to the public; and
3. be satisfied that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation’s financial statements, other than the disclosure provided by the financial statements, management’s discussions and analyses and earnings press releases, and shall periodically assess the adequacy of those procedures.
Chief Executive Officer’s Expense Reports
3.2 The Chair of the Committee shall review, at least annually, the expense reports of the Chief Executive Officer. Following this review, the Chair shall report to the Committee.
Policy on Use of Corporate Aircraft
3.3 The Chair of the Committee shall review, at least annually, the application of the Policy on Use of Corporate Aircraft. Following this review, the Chair shall report to the Committee.
External Audit
3.4 The Committee shall:
1. recommend to the Board the external auditor to be appointed for purposes of preparing or issuing an auditor’s report or performing other audit, review or attest services;
2. review the terms of the external auditor’s engagement, the appropriateness and reasonableness of proposed audit fees, and any issues relating to the payment of audit fees, and make a recommendation to the Board with respect to the compensation of the external auditor;
3. review the independence of the external auditor, including an annual report prepared by the external auditor regarding its independence;
4. meet with the external auditor and with management to review the audit plan, audit findings, and any restrictions on the scope of the external auditor’s work;
5. review with the external auditor and management any changes in Generally Accepted Accounting Principles that may be material to the Corporation’s financial reporting;
6. have the authority to communicate directly with the external auditor;
7. require the external auditor to report directly to the Committee;
8. directly oversee the work of the external auditor that is related to the preparation or issue of an auditor’s report or other audit, review or attest services for the Corporation, including the resolution of disagreements between management and the external auditor regarding financial reporting;
9. meet with the external auditor to discuss the annual financial statements (including the report of the external auditor thereon) and the interim financial statements (including the review engagement report of the external auditor thereon);
10. review any management letter containing the recommendations of the external auditor, and the response and follow-up by management in relation to any such recommendations;
11. review any evaluation of the Corporation’s internal control over financial reporting conducted by the external auditor, together with management’s response;
12. pre-approve (or delegate such pre-approval to one or more of its independent members) in accordance with a pre-approval policy, all engagements for non-audit services to be provided to the Corporation or its subsidiary entities by the external auditor, together with all non-audit services fees, and consider the impact of such engagements and fees on the independence of the external auditor;
13. review and approve the Corporation’s hiring policy regarding partners, employees and former partners and employees of the present and former external auditor; and
14. in the event of a change of auditor, review and approve the Corporation’s disclosure relating thereto.
Risk Oversight
3.5 In performing its duties and exercising its powers, the Committee shall consider and address:
1. the risks related to the establishment, maintenance and implementation of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR) in relation to disclosure by the Corporation in accordance with applicable law; and
2. the risks related to cybersecurity that would reasonably be expected to have a material effect on the Corporation’s ongoing business, affairs and/or reputation.
Financial Complaints Handling Procedures
3.6 The Committee shall establish procedures for:
1. the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls, or auditing matters; and
2. the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.
Global Anti-Bribery Policy
3.7 The Committee shall be responsible for monitoring the implementation of, and compliance with, the Corporation’s Global Anti-Bribery Policy.
In-Camera Sessions
3.8 At each meeting of the Committee, the members of the Committee shall meet without members of management present. The Committee shall also periodically meet separately with each of the external auditor and management, as the Committee deems appropriate.
3.9 Subsidiaries
1. With respect to any Material Operating Subsidiary in the corporate ownership chain between the Corporation and any Direct Subsidiary, the Committee shall review the financial statements of that Material Operating Subsidiary.
2. With respect to any Direct Subsidiary:
a. the Committee shall rely on the review and approval of the financial statements of the Direct Subsidiary by the audit committee and the board of directors of the Direct Subsidiary, and on reports or opinions of the external auditor on those financial statements;
b. the Committee shall receive a copy of the charter of the Direct Subsidiary’s audit committee, together with a memorandum summarizing its meeting processes and structure (“Process Memorandum”); and
c. at each meeting of the Committee, the secretary of the Committee shall table a report from the secretary of the Direct Subsidiary’s audit committee confirming that the processes mandated by its charter and Process Memorandum have been followed.
3. For these purposes:
a. “Material Operating Subsidiary” means an operating subsidiary whose net income represents 10% or more of the net income of the Corporation; and
b. “Direct Subsidiary” means the first Material Operating Subsidiary entity below the Corporation in a corporate ownership chain that has an audit committee which is comprised of a majority of independent directors.
4. Auditor’s Attendance at Meetings
The external auditor shall be entitled to receive notice of every meeting of the Committee and, at the expense of the Corporation, to attend and be heard at any meeting of the Committee. If so requested by a member of the Committee, the external auditor shall attend every meeting of the Committee held during the term of office of the external auditor.
5. Access to Information
The Committee shall have access to any information, documents and records that are necessary in the performance of its duties and the discharge of its responsibilities under this Charter.
6. Review of Charter
The Committee shall periodically review this Charter and recommend any changes to the Board as it may deem appropriate.
7. Reporting
The Chair of the Committee shall report to the Board, at such times and in such manner, as the Board may from time to time require and shall promptly inform the Chair of the Board of any significant issues raised during the performance of the functions as set out herein, by the external auditor or any Committee member, and shall provide the Chair of the Board copies of any written reports or letters provided by the external auditor to the Committee.
As adopted by the Committee on November 9, 2004 and by the Board of Directors on November 11, 2004; amended by the Committee on November 11, 2009, and adopted by the Board of Directors on March 11, 2010; amended by the Committee on May 14, 2013, and adopted by the Board of Directors on May 15, 2013; amended by the Committee on November 13, 2013, and adopted by the Board of Directors on November 14, 2013; amended by the Committee on May 14, 2014 and adopted by the Board of Directors on May 15, 2014; amended by the Committee on March 22, 2016 and adopted by the Board of Directors on March 23, 2016; amended by the Committee on August 4, 2016 and adopted by the Board of Directors on August 5, 2016; amended by the Committee on March 22, 2018 and adopted by the Board of Directors on March 23, 2018; amended by the Committee on May 14, 2020 and adopted by the Board of Directors on May 14, 2020; and amended by the Committee on March 16, 2021 and adopted by the Board of Directors on March 17, 2021.
Human Resources Committee Charter
1. Purpose
The Human Resources Committee (the “Committee”) is a standing committee appointed by the Board of Directors of Power Corporation of Canada (the “Corporation”).
2. Procedures, Powers and Duties
The Committee shall have the following procedures, powers and duties:
2.1 General
a. Composition > Each member of the Committee shall be an “independent” director, as determined by the Board of Directors.
b. Appointment > The members of the Committee shall be appointed by the Board of Directors at the meeting of the Board of Directors following each annual meeting of shareholders and shall serve until their successors shall be duly appointed and qualified or until their earlier death, resignation or removal.
c. Separate Meetings > The Committee shall meet at least twice every year, and more often as warranted, with the President and Chief Executive Officer to discuss any matters that the Committee or the President and Chief Executive Officer believes should be discussed. At each meeting of the Committee, the members of the Committee shall meet without members of management present. The Committee shall also meet periodically with the compensation consultants without management present.
d. Quorum > A quorum at any meeting of the Committee shall be a majority of the Committee members.
e. Professional Assistance > The Committee may retain compensation consultants to advise the Committee at the Corporation’s expense including sole authority to retain and terminate any compensation consulting firm and to approve any such firm’s fees and other retention terms.
f. Calling of Meetings > A meeting of the Committee may be called by the Chair of the Committee, by the Chair of the Board, or by a majority of the Committee members, on not less than 48 hours’ notice to the members of the Committee specifying the date, place and time of the meeting. Meetings may be held at any time without notice if all members of the Committee waive notice. If a meeting of the Committee is called by anyone other than the Chair of the Board, the person(s) calling such meeting shall so inform the Chair of the Board and the Chair of the Committee.
g. Reporting to the Board of Directors > The Committee will report through the Committee Chair to the Board of Directors on the Committee’s activities generally and, in particular, on the matters required by this Charter.
Compensation of Management
2.2 The Committee shall annually:
a. approve objectives for the President and Chief Executive Officer and evaluate his performance against applicable objectives;
b. review, assess the competitiveness and appropriateness of and approve the President and Chief Executive Officer’s recommendations with respect to the compensation packages (including salary, bonus, options and pension) to be provided to the other personnel of the Corporation appointed by the Board of Directors and such other employees of the Corporation as may be identified to the Committee by the Board of Directors (collectively, the “Designated Employees”);
c. prepare a compensation package (including salary, bonus, options and pension) for the President and Chief Executive Officer to be recommended to the Board of Directors for approval.
2.3 The Committee shall review and approve any retiring allowance arrangements or any similar arrangements with the President and Chief Executive Officer and each of the Designated Employees to take effect in the event of termination of employment and report such approved arrangements pertaining to the President and Chief Executive Officer to the Board of Directors.
2.4 Employment agreements between the Corporation and the President and Chief Executive Officer and amendments to the terms of such agreements shall be subject to review and recommendation by the Committee and approval by the Board of Directors.
2.5 Employment agreements between the Corporation and any of the Designated Employees and amendments to the terms of such agreements shall be subject to approval by the Committee upon the recommendation of the President and Chief Executive Officer.
Compensation of Employees
2.6 The Committee shall annually review and approve compensation strategies for the retention and motivation of the Corporation’s employees other than the President and Chief Executive Officer and the Designated Employees (the “employees”).
2.7 The Committee shall annually review the President and Chief Executive Officer’s recommendations with respect to the compensation guidelines applicable to employees and approve such compensation guidelines.
Compensation Policies and Plans
2.8 The Committee shall recommend compensation policies and, in particular, the compensation policies respecting the President and Chief Executive Officer and the Designated Employees to the Board of Directors for approval.
2.9 The Committee shall:
a. administer incentive compensation and equity compensation plans, and supplementary pension plans of the Corporation, unless otherwise specified by the Board of Directors; and
b. review and recommend to the Board of Directors for its approval new incentive and equity compensation plans, and supplementary pension plans, as well as amendments to such plans.
2.10 In performing its duties and exercising its powers, the Committee shall consider the implications of the risks associated with the Corporation’s compensation policies and practices.
Loans to Senior Officers
2.11 Loans to a Designated Employee in an aggregate amount in excess of the Designated Employee’s annual base salary shall be subject to review by the Committee and Board of Directors approval based on the Committee’s recommendation.
2.12 The Committee shall review Management’s policies and practices respecting the Corporation’s compliance with applicable legal prohibitions, disclosure requirements or other requirements on making or arranging for personal loans to senior officers or amending or extending any such existing personal loans or arrangements.
Succession Planning and Talent Management
2.13 The Committee shall periodically review with the President and Chief Executive Officers and approve management succession plans for the President and Chief Executive Officers and Designated Employees. In reviewing the management succession plans for Designated Employees, the Committee shall take into account the objectives of the Corporation’s Diversity Policy.
2.14 The Committee shall periodically review the Corporation’s talent management initiatives, and monitor the development of Designated Employees in accordance with succession plans.
2.15 The Committee shall review and approve plans in respect of an unexpected incapacitation of the President and Chief Executive Officer.
Director Compensation
2.16 The Committee shall recommend to the Board of Directors for its approval the terms upon which Directors shall be compensated. The Committee shall recommend terms for the compensation of Directors, the Chair, the Deputy Chair and the Lead Director of the Board of Directors (if applicable) and those acting as committee chairs and committee members that adequately reflect the responsibilities they are assuming.
Director Share Holdings
2.17 The Committee shall from time to time review the Corporation’s policy on Director share holdings and monitor its implementation.
Reports from Alternative Investment Platforms
2.18 The Committee shall annually meet with the Chairs of the compensation committees of Power Sustainable Capital and Sagard Holdings who will report on the activities of their respective committee, particularly regarding the compensation structure of their senior management.
Reporting to the Shareholders
2.19 The Committee shall annually review and recommend to the Board for approval disclosure relating to executive compensation, director compensation and the Committee’s annual work plan in accordance with applicable rules and regulations that shall be disclosed in the management proxy circular prepared in connection with the Corporation’s annual meeting of shareholders.
General
2.20 The Committee may undertake such other compensation initiatives as may be assigned to the Committee by the Board of Directors from time to time.
2.21 The Committee shall periodically review and reassess the adequacy of this Charter and recommend changes to the Board of Directors for its approval.
Adopted by the Board of Directors on March 29, 2006, as amended on August 7, 2009; amended by the Committee on March 13, 2012 and adopted by the Board of Directors on March 14, 2012; amended by the Committee on August 4, 2016 and adopted by the Board of Directors on August 5, 2016; amended by the Committee on March 21, 2018 and adopted by the Board of Directors on March 23, 2018; amended by the Committee on March 16, 2020 and adopted by the Board of Directors on March 18, 2020; and amended by the Committee on March 15, 2023 and adopted by the Board of Directors on March 16, 2023.
Human Resources Committee Charter
Governance and Sustainability Committee Charter
1. Membership
The Governance and Sustainability Committee (the “Committee”) of the Board of Directors (the “Board”) of Power Corporation of Canada (the “Corporation”) shall consist of not less than three Directors. Members of the Committee shall be appointed by the Board and shall serve as members at the pleasure of the Board. The Board shall also appoint the Chair of the Committee.
2. Procedural Matters
In connection with the discharge of its duties and responsibilities, the Committee shall observe the following procedures:
2.1 Composition > Each member of the Committee shall be a Director that is not a member of management of the Corporation, of any subsidiary of the Corporation or of any parent of the Corporation.
2.2 Appointment > The members of the Committee shall be appointed by the Board of Directors at the meeting of the Board of Directors following each annual meeting of shareholders and shall serve until their successors shall be duly appointed and qualified or until their earlier death, resignation or removal.
2.3 Meetings > The Committee shall meet as often as may be necessary to discharge its duties and responsibilities hereunder. The Committee may meet at any place within or outside of Canada. At each meeting of the Committee, the members of the Committee shall meet without members of management present.
2.4 Advisors > The Committee may, at the Corporation’s expense, engage such outside advisors as it determines necessary or advisable to permit it to carry out its duties and responsibilities.
2.5 Quorum > A quorum at any meeting of the Committee shall be a majority of the Committee members.
2.6 Secretary > The Chair of the Committee (or, in the absence of the Chair, the acting Chair) of the Committee shall appoint a person to act as secretary of meetings of the Committee.
2.7 Calling of Meetings > A meeting of the Committee may be called by the Chair of the Committee, by the Chair of the Board, or by a majority of the Committee members, on not less than 48 hours’ notice to the members of the Committee specifying the place, date and time of the meeting. Meetings may be held at any time without notice if all members of the Committee waive notice. If a meeting of the Committee is called by anyone other than the Chair of the Board, the person(s) calling such meeting shall so inform the Chair of the Board and the Chair of the Committee.
3. Duties and Responsibilities
In addition to any other duties and responsibilities assigned to it from time to time by the Board, the Committee shall have the following duties and responsibilities:
3.1 Director Qualifications > The Committee shall recommend to the Board candidates for Directors that possess the qualifications, competencies, skills, experience, and level of commitment required of a Director in order to fulfill Board responsibilities and the personal qualities that should be sought in candidates for Board membership.
3.2 Board Candidates > The Committee shall, after considering:
a. the competencies and skills that the Board considers to be appropriate for the Board as a whole to possess;
b. the competencies and skills that the Board considers each existing Director to possess and that each new nominee will bring to the Board;
c. the objectives of the Corporation’s Diversity Policy; and
d. the appropriate level of representation on the Board by Directors who are independent of management and who are neither officers nor employees of any of the Corporation’s affiliates;
identify candidates qualified for Board membership, and recommend to the Board nominees to be placed before the shareholders at the next annual general meeting.
3.3 Committee Membership > The Committee shall recommend to the Board individuals for appointment to the committees of the Board after considering the mandates of the respective committees, the skills that each Director possesses, and the appropriate level of representation on the committees by Directors who are independent of management and who are neither officers nor employees of any of the Corporation’s affiliates.
3.4 Director Orientation and Education > The Committee shall ensure that all newly appointed Directors are provided with an orientation as to the nature and operation of the business and affairs of the Corporation, the role of, and expectations as to the contributions to be made by the Board and its committees, and that existing Directors are periodically updated in respect of the foregoing.
3.5 Board, Committee and Director Assessment > The Committee shall assess, on a regular basis, the structure, composition, effectiveness and contribution of the Board, of all committees of the Board, and of the Directors.
3.6 Corporate Governance > The Committee shall review the Corporation’s approach to corporate governance including, without limitation:
a. recommending to the Board for approval charters for the Board and Board committees, and position descriptions for the Chair of the Board, the Lead Director and for the Chair of each Board committee;
b. recommending to the Board appropriate sizes for the Board and for committees of the Board;
c. working with the Chief Executive Officer, the Chair, the Deputy Chair, the Lead Director and other members of management to ensure that the Corporation has a strong corporate governance culture and strong governance processes;
d. monitoring developments in the area of corporate governance and undertaking other initiatives that may be desirable to maintain high standards of corporate governance; and
e. annually reviewing and recommending to the Board for approval disclosure relating to the Corporation’s approach to governance in accordance with applicable rules and regulations that shall be disclosed in the management proxy circular prepared in connection with the Corporation’s annual meeting of shareholders.
3.7 Diversity Effectiveness > On an annual basis, the Committee will assess the effectiveness of the Board nomination process at achieving the objectives of the Corporation’s Diversity Policy.
3.8 Corporate Social Responsibility > The Committee shall be responsible for monitoring the implementation of the Corporation’s policy and strategy with respect to corporate social responsibility.
3.9 Mission Statement > The committee shall periodically review the Corporation's mission statement and, after discussion with management, recommend any changes to the Board that it deems appropriate.
3.10 Risk Oversight > In performing its duties and exercising its powers, the Committee shall oversee the Corporation’s approach to appropriately addressing potential risks related to governance matters.
4. Access to Information
The Committee shall have access to all information, documents and records of the Corporation that it determines necessary or advisable to permit it to carry out its duties and responsibilities.
5. Review of Charter
The Committee shall periodically review this Charter and recommend any changes to the Board that it deems appropriate.
6. Reporting
The Chair of the Committee shall report to the Board on matters reviewed or considered by the Committee since the Chair’s last report to the Board.
Adopted by the Board of Directors on March 29, 2006, as amended August 7, 2009, on March 10, 2011, on March 13, 2013 and on March 19, 2014; amended by the Committee on March 21, 2018 and adopted by the Board of Directors on March 23, 2018, amended by the Committee on March 17, 2020 and adopted by the Board of Directors on March 18, 2020; and amended by the Committee on March 16, 2021 and adopted by the Board of Directors on March 17, 2021.
Governance and Sustainability Committee Charter