Route1’s corporate governance practices are consistent with National Instrument 58-201 – Disclosure of Corporate Governance Practices (“NI 58-201”). They are as follows:
Board of Directors
The Board is currently composed of the following eight directors: Tony P. Busseri, Peter F. Chodos, Louis De Jong, Michael F. Doolan, David Fraser, Michael D. Harris, John Marino and Edward M. Reeder. Six of the directors are Independent (as defined in Section 2.1 of NI 58-201). Mr.Busseri, as the Chief Executive Officer of the Corporation and Mr. Chodos as Executive Vice President and Chief Financial Officer, are not Independent.
The Board holds formal meetings as required at least once per fiscal quarter to consider the Corporation’s business and financial performance and to approve shareholder communications related to the Corporation’s financial performance. Additional meetings are held as needed to consider specific issues that arise from time to time.
Management also prepares reports to the Board in respect of operations and matters that require pre-approval by the Board. All items of a capital nature, as well as material expenditures, borrowings, annual operating budget and annual financial statements, require Board pre-approval. The Audit Committee reviews all disclosure of financial information such as annual and interim financial statements and related press releases prior to dissemination.
The Chief Executive Officer reports to the Board on the Corporation’s progress, comparing actual results to budgeted and forecasted results. Management is responsible for risk identification, risk management, succession planning, human resource management, and public communication, under the overall direction of the Chief Executive Officer who reports to and accepts direction in these areas from the Board. The Board of Directors reviews the performance of the Chief Executive Officer informally on an ongoing basis. The Board, directly and through the Audit Committee, assesses the integrity of the Corporation’s internal control and management information systems.
Orientation and Continuing Education
New directors are provided with information on the Corporation and its management. They are fully briefed by senior management in order to gain an in-depth understanding of the business and its issues.
Ongoing training and development of directors consists of similar components, including regular updates on the business, its products and services, its growth opportunities, and any issues it is confronting.
Ethical Business Conduct
The Corporation has a written Code of Business Conduct and Ethics that applies to all employees, officers and Directors and is designed to promote integrity and deter wrongdoing. The Code is available on SEDAR at www.sedar.com. The Corporation and the Board also operate in an environment that promotes ethical corporate behaviour, encouraging employees, shareholders and others to contact the Board and management and to maintain open lines of communication. In addition, the Independent members of the Board meet after each scheduled Board meeting without management involvement. The Board is responsible for monitoring compliance with the Code.
Nomination of Directors
The Independent Directors review and assess potential candidates for the Board of Directors and recommend suitable members to the entire Board of Directors.
The Board of Directors determine compensation for the Directors and the Officers of the Corporation based upon recommendations made by the Compensation, Corporate Governance and Nominating Committee. The current member of this Committee is David Fraser. He is Independent (as defined in Section 1.2 of NI 58-101).
The Committee sets the goals and corporate targets for the CEO upon which his compensation will be based. In conjunction with the CEO, the Committee also sets the goals and corporate targets upon which senior management compensation will be based. In undertaking its responsibilities, the Committee has made use of consulting firms in order to comprehensively research and benchmark market-based compensation matters including salaries, bonuses, equity, and employment agreements for the senior management and Directors of the Corporation.
The Corporation currently does not have any Board committees in addition to the Audit Committee and the Compensation, Corporate Governance and Nominating Committee.
The Board of Directors assesses itself and its committees on a regular basis to determine its level of effectiveness. Participation is expected at all board and committee meetings.