Corporate Governance

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 of March 23, 2016, the Desmarais Family Residuary Trust exercised, through holding corporations, control over shares carrying approximately 59.19 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 (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. Formal checklists cannot replace real care, responsibility and personal engagement.

The Board believes that the Corporation’s governance system is effective and is appropriate to its circumstances, and that there are in place appropriate 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. 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.

(Source: March 2016 Management Proxy Circular)

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) 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, the Instruments go on to 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. In the view of the Board, the determination of director independence should be based upon whether or not the director is independent of the corporation’s management, and whether or not the director has any other relationships with the corporation which could reasonably be expected to interfere with the exercise of the director’s independent judgment. In the Board’s view, that is a question of fact that should be determined by the issuer’s board of directors on a case-by-case basis without reference to any presumptions such as those which are currently contained in the Instruments.

One of the most important functions of a board of directors is to oversee management in the drive to achieve long-term shareholder returns. A financially strong and long-term oriented controlling shareholder can have a significant positive impact on a corporation’s long-term returns, benefiting all shareholders and the corporation as a whole. The benefits can include the ability to encourage and support management in the pursuit of long-term strategies and the provision of directors who are experienced and knowledgeable about the business of the corporation. In the case of our corporate group, many of these attributes are provided through a governance model which has been developed over many years, and which includes a group of directors on the boards of our subsidiaries who are also Directors and/or officers of the Corporation or Power Financial. These Directors have no relationship with the subsidiaries other than as directors and shareholders, and the full-time job of a number of officers of the Corporation is to focus on and become knowledgeable about the affairs of our subsidiaries. The effect of the “deeming provision” regarding director independence, if followed, would be to deny the Corporation, all of its shareholders, and its corporate group the benefit of this governance model and prevent the Corporation and Power Financial from participating fully in the oversight function at their subsidiaries.

Any concerns which may exist in a controlled company situation about conflicts of interest or self-dealing should, in the view of the Board of Directors, 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 in the section entitled Resolution of Conflicts. Each of our publicly traded subsidiaries also has such a committee.

The CSA has acknowledged the concerns expressed by some reporting issuers as to whether the CSA’s view of director independence is appropriate to companies such as the Corporation and its publicly traded subsidiaries which have a majority shareholder. Thus, the Policy stated at the time of its implementation that the CSA “intend(s), over the next year, to carefully consider these concerns in the context of a study to examine the governance of controlled companies” and that it “will consider whether to change how this Policy…treat(s) controlled companies”. On December 19, 2008, the CSA published “Request for Comment: Proposed Repeal and Replacement of NP 58-201 Corporate Governance Guidelines, NI 58-101 Disclosure of Corporate Governance Practices, and NI 52-110 Audit Committees and Companion Policy 52-110 CP Audit Committees” (the Proposal) which included, among other things, the replacement of the current prescriptive approach to independence, and use of deeming rules, with a more principles-based approach. Although the Board of Directors was encouraged by the new direction proposed by the CSA, the CSA subsequently decided not to proceed with its proposed revisions as then-published. The CSA has indicated that it is still considering potential changes to the corporate governance regime. The Corporation encourages the CSA to continue its review of the “independence” definition as it relates to majority shareholders and to proceed with appropriate revisions at an early opportunity.

Assessment of Independence

The Board of the Corporation is currently composed of 12 Directors. In the Board’s view, the following 9 Directors (constituting more than a two thirds majority of the Board), namely Pierre Beaudoin, Marcel R. Coutu, Gary A. Doer, Anthony R. Graham, J. David A. Jackson, Isabelle Marcoux, Christian Noyer, T. Timothy Ryan, Jr. and Emőke J.E. Szathmáry 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.

Paul Desmarais, Jr., Chairman and Co-CEO, and André Desmarais, a Deputy Chairman, President and Co-CEO, being executive officers of the Corporation, are not independent. R. Jeffrey Orr, President and Chief Executive Officer of Power Financial, being an executive officer of a subsidiary of Power Corporation, is not independent.

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. Discussions are led by an independent Director who provides feedback subsequently to the Chairman of the Board. These discussions are currently led by Mr. Graham, who also chairs the Compensation Committee of the Board. All independent Directors are encouraged by the Chairman of the Board to have open and candid discussions with the Chairman or with the Co-CEOs.

The Board has adopted a policy relating to meetings of independent Directors at Board and Committee meetings. Since March 18, 2015, the Directors on the Board who are independent of management have met at every regularly scheduled Board meeting without members of management present. Accordingly, there were four such meetings held during 2015. The Audit Committee, the Related Party and Conduct Review Committee, and the Compensation Committee are composed entirely of Directors who are independent both in the Board’s view and within the meaning of the Instruments. Under the policy, each of these committees is to meet without members of management as follows: Audit Committee — at least four times per year, and Related Party and Conduct Review Committee and Compensation Committee — at every meeting.

Chairman of the Board

The Board believes it is appropriate in a management and holding company such as Power Corporation, with a controlling shareholder, that the positions of the Chairman of the Board and Co-CEO overlap and for such individuals to be associates of our controlling shareholder. Power Corporation is at the top of our corporate group structure and is the company in which the controlling shareholder exercises majority voting control directly. Power Corporation, in turn, exercises majority voting control, directly and indirectly, through the chain of ownership of its subsidiaries (including Power Financial, IGM and Lifeco, each of which has separate individuals serving as CEO and as Chairman of the Board). It is at the Power Corporation level that many important decisions affecting the corporate group are discussed and made and it is important for the controlling shareholder to be directly involved, both at the management and Board level, in those decisions.

The Board has implemented structures and procedures to provide assurance that the Board can act independently of management. More than a two-thirds majority of the Board is independent both within the meaning of the Instruments and in the Board’s view. The Audit Committee, the Related Party and Conduct Review Committee and the Compensation Committee are constituted entirely with Directors who are independent both in the Board’s view and within the meaning of the Instruments. The Governance and Nominating Committee includes Directors who are independent both in the Board’s view and within the meaning of the Instruments.

(Source: March 2016 Management Proxy Circular)

It is the duty of the Board to supervise the management of the business and affairs of the Corporation with a view to the best interests of the Corporation, including its shareholders as a whole. In discharging this duty, the Board establishes procedures for the identification and resolution of conflicts that might arise between the interests of Power Corporation and the interests of its controlling shareholder.

Power Corporation has established a Related Party and Conduct Review Committee composed entirely of Directors who are independent of management and independent of the Corporation’s controlling shareholder. The mandate of the Related Party and Conduct Review Committee is to review proposed transactions, if any, with related parties of the Corporation and to approve only those transactions that it deems appropriate.

Each of Great-West Life, London Life and Canada Life is a regulated financial institution. They are prohibited from entering into certain related party transactions. They are also each required by law to have a conduct review committee that establishes procedures for the review of certain permitted proposed related party transactions to ensure that any such transactions are on terms and conditions at least as favourable to those companies as market terms and conditions. These conduct review committees are composed of Directors who are independent of the management of Great-West Life, London Life and Canada Life and who are neither officers nor employees of the Corporation, Power Financial or any of their affiliates. Similarly, Lifeco and IGM have also established their own conduct review committees composed entirely of Directors who are independent of management and who are neither officers, employees nor Directors of Power Corporation or Power Financial. Power Financial has also established its own related party and conduct review committee composed entirely of Directors who are independent of management and who are neither officers, employees nor Directors of Power Corporation.

For a description of the Board’s procedures in respect of transactions involving Directors or officers of Power Corporation, see also Ethical Business Conduct.

(Source: March 2016 Management Proxy Circular)

The mandate of the Board, which it currently discharges directly or through one of the four Board Committees, is to supervise the management of the business and affairs of the Corporation, and includes responsibility for approving strategic goals and objectives, review of operations, disclosure and communications policies, oversight of financial reporting and other internal controls, corporate governance, Director orientation and education, senior management compensation and oversight, and Director nomination, compensation and assessment.

The primary mandate of the Audit Committee is to review the financial statements of the Corporation and public disclosure documents containing financial information and to report on such review to the Board, to be satisfied that adequate procedures are in place for the review of the Corporation’s public disclosure documents that contain financial information, to oversee the work and review the independence of the external auditors, and to review any evaluation of the Corporation’s internal control over financial reporting.

The primary mandate of the Compensation Committee is to approve compensation policies and guidelines for employees of the Corporation, to approve compensation arrangements for executives of the Corporation, to recommend to the Board compensation arrangements for the Directors and for the Co-CEOs, to oversee the management of incentive compensation plans and equity compensation plans, to consider the implications of any risks associated with the Corporation’s compensation policies and practices, and to review succession plans for senior management.

The primary mandate of the Related Party and Conduct Review Committee is to recommend to the Board procedures for the consideration and approval of transactions with related parties of the Corporation and to review and, if deemed appropriate, to approve such transactions.

The primary mandate of the Governance and Nominating Committee is to oversee the Corporation’s approach to governance issues, to recommend to the Board corporate governance practices consistent with the Corporation’s commitment to high standards of corporate governance, to recommend to the Board candidates for election as Directors and for appointment to Board Committees, and to assess the effectiveness and contribution of the Board, of Board Committees, and of individual Directors.

(Source: March 2016 Management Proxy Circular)

The Audit Committee, the Related Party and Conduct Review Committee, and the Compensation Committee are composed entirely of Directors who are independent both in the Board’s view and within the meaning of the Instruments.

The Governance and Nominating Committee includes Directors who are independent both in the Board’s view and within the meaning of the Instruments. The Board believes that it is normal and appropriate, especially in the case of a holding company with a controlling shareholder, like the Corporation, to have Directors who are related to the controlling shareholder (in this case, Paul Desmarais, Jr. and André Desmarais) as members of the Governance and Nominating Committee, as well as Directors who are independent and not related to the controlling shareholder.

(Source: March 2016 Management Proxy Circular)

The Board has adopted a Charter for itself and for each of its four committees. The mandates of all four committees are described in summary in the section Board of Directors.

(Source: March 2016 Management Proxy Circular)

As a holding company, the Corporation has the risks associated with being a significant shareholder in its subsidiary operating companies. The subsidiaries’ Boards are responsible for the risk oversight function at those companies. Officers of the Corporation are members of these Boards and Board Committees and therefore participate in the risk oversight function at the operating company level in their role as directors of those companies. As an indirect shareholder of companies operating in the financial services sector (including subsidiaries regulated and supervised by Office of the Superintendent of Financial Institutions and provincial regulators), the Corporation is well aware of the particular necessity for robust risk identification and risk management oversight.

As for risk oversight at the Corporation’s level, the Board considers identifying and managing risk, and taking a long-term view when making investments and managing the assets of the Corporation, to be of imperative importance. This approach is inextricably engrained within the culture of the Corporation and is supported by the Corporation’s controlling shareholder which has placed a premium on enduring viability, stability, diversification and cash flow, rather than on quarterly results. The Corporation believes that value is best achieved through a prudent approach to risk and through a governance model that focuses on the active oversight of our investments. The Board has overall responsibility for monitoring the implementation and maintenance by management of appropriate policies and controls to manage the risks associated with the Corporation’s businesses as a holding company. Additionally, while risk management is a general responsibility of each Committee of the Board, specifically in performing their respective duties, the Audit Committee addresses risks related to financial reporting, the Compensation Committee considers risks associated with the Corporation’s compensation policies and practices, the Governance and Nominating Committee oversees the Corporation’s approach to appropriately addressing potential risks related to governance matters, and the Related Party and Conduct Review Committee considers risks related to any proposed transactions with related parties of the Corporation.

(Source: March 2016 Management Proxy Circular)

Additional information relating to our Directors, 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, 2015, can be found in the Corporation’s 2016 Management Proxy Circular.

The Corporation believes that the interests of the Corporation, a holding company, are well served by the experience of and expertise in the affairs of its group companies that is brought to the Corporation by those Directors who also serve on the boards of subsidiaries. Their presence enriches the discussion and enhances the quality of governance of the Corporation’s Board and at the other group boards on which they serve.

(Source: March 2016 Management Proxy Circular)

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 for recommending to the Board those candidates who possess the qualifications, skills, business and financial experience, leadership roles, level of commitment and available time required of a Director to fulfill Board responsibilities.

Members of the Governance and Nominating Committee informally maintain an evergreen list of potential candidates and employ a skills matrix to assist with reviewing the skills and experience of director candidates and of the Board as a whole. The matrix outlines a complement of diverse qualifications, attributes, skills and experience that are viewed as being relevant to the proper functioning of the Board. The matrix includes industry-specific and business experience, as well as other areas of expertise and attributes, such as public sector, corporate social responsibility and geographic diversity, in order to ensure that the Board includes members with a broad range of complementary experience, knowledge and skills. The Committee recognizes that each Director will contribute differently to the Board and will each bring particular strengths in different areas of qualification. While the skills matrix is an important tool in assessing Board candidates, the Committee does not limit itself to considering only the specified areas of expertise or attributes in selecting Board members.

The Board also believes that diversity is important to ensure that Board members provide the necessary range of perspectives, experience and expertise required to achieve effective stewardship of the Corporation. 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. The Board is committed to nominating the best individuals to fulfill Director roles.

On March 18, 2015, the Board adopted a Diversity Policy, which includes provisions relating to the identification and nomination of women directors. The Policy 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, 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 nomination for a Board position. The 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 has not adopted a target regarding women on the Board as the Board believes that such arbitrary targets are not in the best interests of the Corporation.

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. This approach has served the Corporation well, and this is reflected in the increased turnover rate of Directors over the past few years, and in particular, the significant reduction of the size of the Board in 2012.

There are currently two women on the Board, representing 18 per cent of the Directors of the Corporation, the same as last year.

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 qualified independent 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 12 individuals set out under “Election of Directors – Nominees for Election to the Board” in the Corporation’s 2016 Management Proxy Circular be nominated for election as Directors of the Corporation at the Meeting.

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 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, since the controlling shareholder will necessarily cast a majority of the votes to be cast in an election of such a company’s directors. 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.

(Source: March 2016 Management Proxy Circular)

Director orientation and education is conducted under the aegis of the Chairman of the Board. Newly elected Directors are provided with a comprehensive orientation as to the nature and operation of the business and affairs of the Corporation and the Corporation’s major operating subsidiaries, as to the role of the Board and its Committees, and as to the contributions that individual Directors are expected to make. In order to orient new Directors as to the nature and operation of the Corporation’s business, they are also given the opportunity to meet with members of the Corporation’s executive management team and with members of the executive management teams of the Corporation’s major operating subsidiaries to discuss the Corporation’s businesses and activities. Directors are periodically updated in respect of these matters including by way of quarterly presentations to the Board at Board (from time to time, these presentations are made by an operating subsidiary’s chief executive officer) and Committee meetings, and working Board dinners, regarding the Corporation’s major operating subsidiaries and operating segments thereof in addition to the presentations by the Corporation’s auditors and other speakers. Also, Directors receive a comprehensive package of information prior to each Board and Committee meeting. As noted above, certain of the Corporation’s Directors also serve as Directors of the Corporation’s public and private company investments. Finally, Directors have access to the Corporation’s senior management and employees on an ongoing basis throughout their mandate.

(Source: March 2016 Management Proxy Circular)

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. Although the scope and focus of such review may vary from year to year, the review includes a confidential Board effectiveness survey, which is administered by the Corporation’s external legal counsel and completed by each of the Directors, soliciting feedback from Directors on matters including the operation of the Board and its Committees, the effectiveness of Board processes and the Board’s relationship to management, the adherence by the Board and the Governance and Nominating Committee to the Diversity Policy in nominating individuals for election to the Board, the adequacy of information provided to Directors, Board structure and agenda planning for Board and Board Committee meetings. The aggregated, anonymous survey results are reviewed by the Governance and Nominating Committee. The Chairman of the Committee reports the findings, including key recommendations, to the full Board for discussion.

(Source: March 2016 Management Proxy Circular)

The Board has approved written position descriptions for the Chairman of the Board and for the Chairman of each Board Committee. In general terms, the Chairman of the Board and the Chairmen of the Board Committees are responsible for ensuring that the Board or Committee is able to fulfill its duties and responsibilities in an effective manner, for planning and organizing the activities of the Board or of the Committee, for ensuring that delegated Committee functions are carried out and reported as necessary, for facilitating effective interaction with management, and for engaging outside advisers where necessary.

The Board has approved a written position description for the Co-CEOs. In general terms, the Co-CEOs are responsible for managing the strategic and operational performance of the Corporation in accordance with the goals, policies and objectives set from time to time by the Board, including developing for the Board’s consideration and approval the Corporation’s financial plan and developing sound operating strategies to implement such plan, for managing the day-to-day operations of the Corporation, for setting an operational environment that is performance driven, for assisting the Board with succession planning, and for representing the Corporation to its major stakeholders.

(Source: March 2016 Management Proxy Circular)

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. 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.

(Source: March 2016 Management Proxy Circular)

The Diversity Policy adopted on March 18, 2015 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 Co-Chief Executive Officers of the Corporation consider 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 Co-Chief Executive Officers 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 selecting the best person to fulfill senior management roles and, accordingly, has not adopted a target regarding women 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 aimed at its female employees, including flexible work arrangements and career advancement counselling. The Corporation has also adopted human resource policies aimed at reducing barriers to gender diversity in the Corporation’s senior ranks. Additionally, the Corporation 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.

As was the case last year, women do not currently occupy any of the executive officer positions with the Corporation, although the Corporation has one female officer. The Corporation’s publicly-traded subsidiaries, Lifeco and IGM, have publicly disclosed that women currently hold five and six executive officer positions, respectively, at such subsidiaries (including their respective principal subsidiaries). As a result, women hold a total of eleven executive officer positions within the Corporation’s group companies (including its publicly-traded subsidiaries and their respective principal subsidiaries), representing 18 per cent of the total number of executive officer positions at such entities.

(Source: March 2016 Management Proxy Circular)

The Board has adopted a written Code of Business Conduct and Ethics (the Code of Conduct) that governs the conduct of the Corporation’s Directors, officers and employees.

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 either of the Executive Co-Chairmen, the CEO or any member of the Audit Committee, as appropriate, in accordance with the Corporation’s procedures.

Directors and employees of the Corporation are required to confirm annually, and officers of the Corporation are required to confirm quarterly, their understanding of, and agreement to comply with, the Code of Conduct (which contains the Corporation’s conflict of interest policy). 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.

In addition, the Corporation has a Related Party and Conduct Review Committee, the role of which is described under Resolution of Conflicts.

The Corporation has adopted a Corporate Social Responsibility Statement and an Environmental Policy, which are available on its dedicated Corporate Social Responsibility website. The Corporation has also adopted an Anti-Bribery Policy.

(Source: March 2016 Management Proxy Circular)

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