The Corporation believes in the importance of good corporate governance and the central role played by directors in the governance process. The Corporation believes that sound corporate governance is essential to the well-being of the Corporation and its shareholders.

Power Corporation is an international management and holding company. It has had controlling shareholders since its beginnings in 1925. The Honourable Paul G. Desmarais held control of Power Corporation from 1968 until his death in October 2013, upon which control of the Corporation passed to the Desmarais Family Residuary Trust. As at March 17, 2022, the Desmarais Family Residuary Trust exercised, through holding entities, control over shares carrying approximately 50.98 per cent of the votes. Power Corporation is not an operating company and a substantial portion of its interests are located outside Canada, specifically in the United States, Europe and Asia.

The foregoing characteristics are important in any consideration of governance philosophy and practices as they apply to the Corporation.

In 2005, the Canadian Securities Administrators (the “CSA”) adopted National Policy 58-201 – Corporate Governance Guidelines (the “Policy”) which sets forth a number of suggested guidelines on corporate governance practices (the “CSA Guidelines”). Under the Policy, issuers are encouraged to consider the CSA Guidelines in developing their own corporate governance practices.

In the Board’s view, no single corporate governance model is superior or appropriate in all respects. The Board’s approach reflects its belief that governance must be focused on substance rather than the application of generic processes and standardized rules and guidelines that do not account for the particular context of the issuer. Rigid, externally generated checklists cannot replace real care, responsibility and personal engagement. Furthermore, any review of governance practices should include consideration of long‑term returns to shareholders, as the Board believes this to be an important indicator of the effectiveness of a governance system.

The Board believes that the Corporation’s governance system is effective and is appropriate to its circumstances, and that there are in place proper structures and procedures to ensure the Board’s independence from management and to ensure that actual or potential conflicts of interest between the Corporation and its controlling shareholder are dealt with appropriately.

Current Applicable Standards

The CSA Guidelines and National Instrument 52-110 – Audit Committees and National Instrument 58-101 – Disclosure of Corporate Governance Practices (the “Instruments”) currently provide that a director is “independent” of an issuer if he or she has no direct or indirect relationship with the issuer which could, in the view of the issuer’s board of directors, be reasonably expected to interfere with the exercise of the director’s independent judgment. The Corporation’s Board of Directors agrees with this approach to assessing director independence.

However, in the context of our majority holdings in Lifeco and IGM, the Instruments further provide that a director is deemed to have such a direct or indirect relationship with an issuer (and thus not to be independent) if, among other things, the director is, or has been within the last three years, an executive officer or an employee of the issuer’s parent corporation (i.e., the controlling shareholder). The determination of director independence is a question of fact that should be decided by the issuer’s board of directors on a case-by-case basis based on actual relationships with an issuer’s management (not relationships with an issuer’s controlling shareholder) and without reference to any presumptions such as those which are currently contained in the Instruments. The provisions in the Instruments concerning independence determinations are overly-broad, as they encompass directors who have no direct or indirect relationship with the issuer which could, in the view of the issuer’s board of directors, be reasonably expected to interfere with the exercise of the director’s independent judgment. The provisions deeming directors that are related to an issuer’s controlling shareholder to be non-independent are not an appropriate response to any potential governance concerns they are intended to address. Any concerns which may exist in a controlled company situation about conflicts of interest or self-dealing should be resolved directly through a committee of directors who are independent of the controlling shareholder. The governance model at the Corporation includes such a committee, the Related Party and Conduct Review Committee, which is discussed below in the section entitled “Resolution of Conflicts”. Each of our publicly traded subsidiaries also has such a committee.

Assessment of Independence

The Board of the Corporation is currently composed of 14 Directors. In the Board’s view, 11 Directors (constituting a more than 78 per cent majority of the Board) are independent within the meaning of the Instruments and have no other relationships that could reasonably interfere with the exercise of their independent judgment in discharging their duties to the Corporation.

The following table shows which Directors are independent and which are non-independent within the meaning of the Instruments, and the reason for non-independence of individual Directors, as applicable.

Meetings of Independent Directors

The Chairman of the Board is responsible for ensuring that the Directors who are independent of management have opportunities to meet without management present. Such discussions are led by the Corporation’s Lead Director, Mr. Anthony R. Graham, who provides feedback subsequently to the Chairman and Deputy Chairman of the Board. All independent Directors are encouraged by the Chairman of the Board to have open and candid discussions with the Lead Director, the Chairman, the Deputy Chairman or with the Chief Executive Officer.

Pursuant to a policy relating to meetings of independent Directors at Board and Committee meetings, the Directors on the Board who are independent of management meet at every regularly scheduled Board meeting without members of management present. Accordingly, there were five such meetings held during 2021. The Audit Committee, the Related Party and Conduct Review Committee, and the Human Resources Committee are composed entirely of Directors who are independent while the Governance and Nominating Committee is entirely composed of Directors who are not members of management of the Corporation. Each of these committees have scheduled in-camera meetings without members of management at every meeting.

Chairman of the Board

Since February 13, 2020, following the Reorganization, the positions of Chief Executive Officer and Chairman of the Board are held by separate individuals. The role of the Chairman of the Board is to seek to ensure that the Board can fulfill its duties and responsibilities in an effective manner in accordance with the laws, regulations and policies governing the Corporation and, in doing so the Chairman shall (in consultation with the Deputy Chairman), among other things: provide leadership to foster the effectiveness of the Board; chair meetings of the Board and of shareholders; ensure that the quality and timeliness of information that goes to the Board is appropriate; ensure that delegated Committee functions are carried out and reported as necessary; facilitate, together with the Chairs of the Board Committees and the CEO, effective and transparent interaction between the Board and management; and ensure that the Corporation’s business is conducted with a view to the best interests of the Corporation. To that end, the Chairman and Deputy Chairman are invited to attend the meetings of Committees of which they are not members, except for meetings of the Related Party and Conduct Review Committee. Should they attend meetings of Committees of which they are not members, the Chairman and Deputy Chairman do not attend the in-camera sessions of such meetings.

As the positions of Chairman and Deputy Chairman are held by former executive officers of the Corporation, the Board has implemented structures and procedures to provide assurance that the Board can act independently of management. In particular, the Board has a Lead Director and 78 per cent of the members of the Board are independent both within the meaning of the Instruments and in the Board’s view. 

Lead Director

Mr. Anthony R. Graham serves as the Lead Director of the Corporation. In fulfilling his responsibilities, the Lead Director chairs the meetings of independent Directors, provides input to the Chairman and Deputy Chairman of the Board regarding the planning and organizing of the activities of the Board and provides input to the Chair of the Governance and Nominating Committee on the composition and structure of the Board and the formation and composition of Committees. The Lead Director is also responsible for reporting to the Chairman of the Board on the discussions of the independent Directors and facilitating the effective interaction between the independent Directors and management, in addition to any other functions as may be requested by the Chairman or Deputy Chairman of the Board.

The Chief Executive Officer is responsible for developing the Corporation’s proposed strategic plans, in light of emerging opportunities and risks and with a view to the Corporation’s sustained profitable growth and long-term value creation, and for implementing the approved strategic plans. The Board of Directors is responsible for approving the long-term goals and objectives for the Corporation; and, after considering alternatives, approving the strategic plans developed by the Chief Executive Officer. The Board of Directors also monitors senior management’s implementation of the approved plans; assesses the achievement of the Corporation’s goals and objectives; reviews and approves on at least an annual basis management’s financial plan; and reviews and approves any significant transactions and strategic capital management decisions regarding the Corporation.

Additional information relating to Directors standing for election, including a list of all public companies, and certain private companies, for which they serve as board members, as well as their attendance records for all Board and Committee meetings for the year ended December 31, 2021, can be found in the Corporation's 2022 Management Proxy Circular.

Each Director is expected to attend a minimum of 75 per cent of the aggregate of all regularly scheduled Board meetings and meetings of committees on which they serve, held during the year. Those Directors who fail to meet this requirement must meet with the Chair of the Governance and Nominating Committee to discuss the reasons contributing to the Director’s attendance record and the Chair will make a recommendation to the Governance and Nominating Committee, as necessary, with respect to the Director’s continued service on the Board. In the absence of personal circumstances beyond the Director’s control having prevented the Director from attending the requisite minimum proportion of applicable meetings, such as health reasons, the Governance and Nominating Committee will not recommend the Director for re-election at the next meeting of shareholders of the Corporation at which Directors are to be elected. 

Without the consent of the Governance and Nominating Committee, no more than two Directors may sit on the board of directors of the same publicly traded company (excluding the Corporation and any other companies in the Power Group). Outside of the Power Group, there is only one board of directors of a publicly traded company on which Directors of the Corporation serve together. Pierre Beaudoin and Anthony R. Graham both serve on the board of directors of Bombardier Inc.

The Board has established a Governance and Nominating Committee, which has a number of responsibilities relating to governance and the nomination of candidates for election as Directors. The Committee is responsible for identifying new candidates for Board nomination and, after considering the objectives of the Corporation’s Diversity Policy, for recommending to the Board those candidates who possess the qualifications, competencies, skills, business and financial experience, leadership roles, level of commitment and available time required of a Director to fulfill Board responsibilities.

The Board also believes that diversity is important to ensure that Board members provide the necessary range of perspectives required to achieve effective stewardship of the Corporation.

The Corporation has a Diversity Policy, which includes provisions relating to diversity and the identification and nomination of directors. For purposes of the Diversity Policy, diversity includes, but is not limited to: age; experience; education; geography; gender; sexual orientation; disability; race, nationality, culture, language and other ethnic distinctions, including Indigenous people. The Diversity Policy further provides that in fulfilling its role in recommending to the Board candidates for Director nominations, members of the Governance and Nominating Committee consider candidates that are highly qualified based on their experience, education, expertise, judgment, personal qualities, and general and sector specific knowledge; consider diversity criteria (but not the level of representation of any particular Designated Group (as defined below) beyond women among other relevant criteria), when determining the optimum composition and balance for the Board; review potential candidates from a variety of backgrounds and perspectives, having in mind the Corporation’s diversity objectives; and, in order to support the specific objective of gender diversity, ensure that appropriate efforts are made to include women in the list of candidates being considered for a Board position.

The Board recognizes that gender diversity is a significant aspect of diversity and acknowledges the important role of women in contributing to diversity of perspective in the Boardroom. As such, the Corporation’s Diversity Policy includes an objective of having not less than 30 per cent of the seats on the Corporation’s Board of Directors held by women by the completion of the Corporation’s annual shareholder meeting to be held in 2025. The Corporation has not adopted an objective regarding the representation of members of the other Designated Groups on the Board.

There are currently four women (28.57 per cent), no “members of visible minorities” (0 per cent), no “persons with disabilities” (0 per cent) and no “Aboriginal peoples” (0 per cent) (each as defined in the Employment Equity Act (Canada), the “Designated Groups”) on the Board. Out of the individuals nominated for election at the Annual Meeting of Shareholders, four (28.57 per cent) are women and there are no nominees part of the other Designated Groups. The Diversity Policy provides that the Committee will assess the effectiveness of the Board nomination process at achieving the Corporation’s diversity objectives on an annual basis. The Corporation’s publicly traded subsidiaries, Lifeco and IGM, have publicly disclosed that there were 5 women (out of 18) and 5 women (out of 15) being nominated for election to their respective Board of Directors representing in total 30.30 per cent of their combined nominees.

The Governance and Nominating Committee and the Board believe that, in addition to the factors discussed above, continuity of membership is critical to the Board’s efficient operation. Accordingly, the Board has not adopted policies imposing an arbitrary term or retirement age limit in connection with individuals nominated for election as Directors of the Corporation, as it does not believe that such limits are in the best interests of the Corporation. Such limits fail to take into account the special characteristics of issuers such as Power Corporation and its group companies, that operate in a highly complex and technical environment. In such a context, the Corporation believes that a lengthy Board tenure, not limited by arbitrary determinations, is vital to the Directors’ understanding of the Corporation’s diverse businesses, and those of its group companies, and to their bringing a substantive contribution to the Board. The Corporation’s Governance and Nominating Committee annually reviews the composition of the Board, including the age and tenure of individual directors. The Board strives to achieve a balance between the desirability to have a depth of institutional experience from its members on the one hand, and the need for renewal and new perspectives on the other hand. 

After considering the appropriate size of the Board and the qualifications and attributes that the existing Directors possess, including the level of representation on the Board by Directors who are independent, and after giving consideration to the Diversity Policy, the Governance and Nominating Committee may determine that it would be in the best interests of the Corporation to nominate an individual that is not already a director of the Corporation, for election to the Board. In such situations, the Governance and Nominating Committee identifies a list of targeted qualifications and attributes and conducts its own search by inviting suggestions for potential candidates from the Directors of the Corporation. The Committee also engages one or more external advisors to identify further qualified candidates, and requires that any such external advisor take account of the objectives of the Corporation’s Diversity Policy.

The Committee has recommended that the 14 individuals set out under “Election of Directors – Nominees for Election to the Board” in the Corporation’s 2022 Management Proxy Circular be nominated for election as Directors of the Corporation at the Annual Meeting of Shareholders.

The Corporation has adopted a form of proxy which gives shareholders the ability to vote for or withhold from voting for each individual Director proposed for election to the Board of Directors of the Corporation. The Board has not adopted a “Majority Voting Policy” (as defined by the Toronto Stock Exchange (the “TSX”)) for the election of Directors. The Board strongly believes that sound corporate governance is essential to the well-being of the Corporation. The adoption of measures such as a Majority Voting Policy, however, may be inappropriate when such measures do not recognize differences among companies, such as the presence of a controlling shareholder. It is the Board’s view that a Majority Voting Policy for the election of Directors does not serve a useful purpose for the shareholders of a controlled company, like the Corporation. This view has been accepted by the TSX, which permits controlled companies, like the Corporation, to rely on an exemption from the requirement for TSX-listed companies to adopt majority voting policies. In addition, the current process for the election of Directors of the Corporation complies with corporate and securities laws.

The Governance and Nominating Committee is responsible for assessing the performance and effectiveness of the Board, Board Committees, and individual Directors from time to time, with a view to ensuring that they are fulfilling their respective responsibilities and duties. An evaluation is conducted at least annually to assist in assessing the overall performance of the Board and the Board Committees. While this evaluation is usually administered by the Corporation’s external legal counsel, in early 2022, the Board engaged an independent consultant to conduct an assessment of the effectiveness and performance of the Board and its standing committees. The independent consultant met individually with each Director to conduct confidential interviews to discuss governance processes and practices. The interviews covered, among other matters, the effectiveness of the Board, Board Committees and the operations of the Board, the adequacy of information provided to directors, Board structure, agenda planning for Board meetings, and oversight of strategic direction. The Directors were asked to consider what the Board did well and what opportunities there may be to improve the value that the Board adds to the Corporation’s business. The independent consultant synthesized its findings which were subsequently presented to the Governance and Nominating Committee and the Board. The Governance and Nominating Committee will monitor and periodically update the Board on these findings. The Board currently plans on engaging an independent consultant to conduct this assessment every few years, and otherwise having the Corporation’s external legal counsel conduct a confidential Board effectiveness survey annually. 

The Board is responsible for overseeing the succession planning processes of the Corporation with respect to senior management positions. The Corporation’s succession planning process, which is tailored to its particular circumstances as a holding company with a relatively small management team, includes the identification and consideration of suitable short- and long-term candidates to hold the applicable roles, on both an interim and permanent basis. The Board has mandated the Human Resources Committee to review at least annually, together with the Chief Executive Officer, and approve, the succession plans for the Chief Executive Officer and the other Named Executive Officers and certain other designated officers of the Corporation, with a view to ensuring the continuity of leadership required by the Corporation for the future. Candidates are considered based on various factors, including (where relevant) executive experience, market and industry expertise, geographic location, familiarity with the Corporation’s and its subsidiaries’ businesses, past performance with the Corporation, as well as past successes in achieving particular corporate goals. The Human Resources Committee also maintains a contingency plan for emergency situations related to illness, disability or other unplanned absences with respect to the Chief Executive Officer and other Named Executive Officer positions. In addition, the Human Resources Committee periodically reviews the Corporation’s talent management initiatives and monitors the development certain employees identified to the Human Resources Committee by the Board, in accordance with succession plans.

The Corporation has a Diversity Policy that outlines the Corporation’s approach to achieving and maintaining greater diversity on the Corporation’s senior management team. The policy provides that in fulfilling their roles of considering candidates for senior management appointments, the Chief Executive Officer of the Corporation considers candidates that are highly qualified based on their experience, education, expertise, judgment, personal qualities, and general and sector-specific knowledge; and review potential candidates from a variety of backgrounds and perspectives, having in mind the Corporation’s diversity objectives, including the specific objective of gender diversity. The Corporation’s Diversity Policy provides that the Chief Executive Officer of the Corporation will assess the effectiveness of the senior management appointment process at achieving the Corporation’s diversity objectives on an annual basis. Furthermore, the policy provides that the Corporation will engage, from time to time, with senior management of the Corporation’s publicly traded subsidiaries, through its representation on their boards, on the implementation of their respective diversity policies relating to the senior management appointment process.

The Corporation is committed to cultivating a diverse and inclusive culture, selecting the best person to fulfill senior management roles based on merit and suitability. The Corporation has not adopted a target regarding members of the Designated Groups in executive officer positions as such arbitrary targets are not in the best interests of the Corporation. The Board believes that diversity is important to ensure that the profiles of senior management provide the necessary range of perspectives, experience and expertise required to achieve effective management. The Board recognizes that gender diversity is a significant aspect of diversity and acknowledges the important role of women in contributing to diversity of perspective in senior management roles. Accordingly, the Corporation offers a variety of internal initiatives to its female employees such as career advancement counselling and sponsors the participation of its high performing female employees in external programs, including conferences and higher education programs, in order to prepare female employees for advancement to senior positions. 

Women, “members of visible minorities”, “persons with disabilities” and “Aboriginal peoples” (each as defined in the Employment Equity Act (Canada)) do not currently occupy any of the executive officer positions with the Corporation, although the Corporation has three officers who are members of visible minorities. Furthermore, as at December 31, 2021, 43 per cent of management roles were held by women. The Corporation’s publicly traded subsidiaries, Lifeco and IGM, have each publicly disclosed that women currently hold five executive officer positions, at such subsidiaries (including their respective principal subsidiaries). As a result, women hold a total of 10 executive officer positions within the Corporation’s group companies (including its publicly traded subsidiaries and their respective principal subsidiaries), representing 31.25 per cent of the total number of executive officer positions at such entities. Currently, there are four “members of visible minorities” (representing 12.5 per cent of the executive officers of the Corporation and its publicly traded subsidiaries), no “persons with disabilities” and no “Aboriginal peoples” (each as defined in the Employment Equity Act (Canada)) in executive officer positions at the Corporation and its publicly traded subsidiaries.

Power Corporation engages with its shareholders on an ongoing basis, in a variety of ways, tailored to its particular context as a holding company. By engaging with a broad range of stakeholders through open dialogue, both formally and informally, senior management gains a better understanding of key topics and can make better decisions on important issues.

There are many ways for stakeholders to engage with the Corporation:

In addition, Power’s website provides extensive information about the Board, the Board Committees and their charters, and Power’s governance framework.

For shareholder questions relating to the payment of dividends, change of address and share certificates, registered shareholders can contact Computershare, the Corporation’s transfer agent and registrar at:

Computershare Investor Services Inc.
Shareholder Services
100 University Avenue, 8th Floor
Toronto, Ontario, Canada M5J 2Y1
Telephone: 1-800-564-6253 (toll-free in Canada and the U.S.) or 514-982-7555

Non-registered shareholders should contact their intermediary.

The Board has adopted a written Code of Business Conduct and Ethics (the Code of Conduct) that governs the conduct of the Corporation’s and its wholly owned subsidiaries' Directors, officers and employees. A copy of the Code of Conduct is available on SEDAR (www.sedar.com) and on the Corporation’s website, or may be obtained by contacting the Corporation’s General Counsel and Secretary.

The Board oversees compliance with the Code of Conduct through the Corporation’s General Counsel and Secretary who monitors compliance with the Code of Conduct. Directors, officers and employees who believe that a violation of the Code of Conduct or any law, rule or regulation has been or is likely to be committed have an obligation to promptly report the relevant information to an appropriate supervisor or, in the case of Directors and senior officers, to the General Counsel and Secretary. Alternatively, in any case, the violation or potential violation may be reported to the Chairman, the Chief Executive Officer or any member of the Audit Committee, as appropriate, in accordance with the Corporation’s procedures.

Directors of the Corporation are required to confirm annually, their understanding of, and agreement to comply with, the Code of Conduct (which contains the Corporation’s conflict of interest policy). Officers and employees of the Corporation are required to complete annually an online training course on the Code of Business Conduct and its related policies and procedures. The online training course contains testing to demonstrate that employees understand the Code and the other policies of the Corporation. There have been no material change reports filed that pertain to any conduct of a Director or executive officer that constitutes a departure from the Code of Conduct.

In order to ensure that Directors exercise independent judgment in considering transactions and agreements in respect of which a Director or an executive officer has a material interest, the Director or executive officer having a conflict of interest must declare his/her interest and, if requested by any other Director, excuse himself or herself from the meeting during the consideration of that particular matter. Such Director may not vote on such a matter.

There have been no material change reports filed that pertain to any conduct of a Director or executive officer that constitutes a departure from the Code of Conduct.

The Corporation has also a Third Party Code of Conduct to set forth its expectations of all third parties in their dealings with, or on behalf of the Corporation as well as a Corporate Social Responsibility Statement and an Environmental Policy, which, together with the Third Party Code of Conduct, are available on its dedicated Corporate Social Responsibility website. The Corporation has also adopted an Anti-Bribery Policy and a Lobbying Policy.

In addition, the Corporation has a Related Party and Conduct Review Committee, the role of which is described in the Board Committee Charters section.