Governance Committee Mandate

Introduction and Purpose

The Governance Committee (the “Committee”) is a standing committee appointed by and responsible to the Board of directors of CIRO (the “Board”). The Committee is responsible for:

reviewing the governance policies, principles and practices of CIRO and making recommendations regarding the Board’s approach to governance matters;
managing and overseeing the process for nominating new directors to the Board with a view to ensuring that the Board reflects the national character of CIRO and draws upon the diversity and expertise of its members;
planning for succession of the chair of the Board (the “Board Chair”);
managing and overseeing the process for evaluating the overall performance of the Board and its committees on an annual basis;
ensuring that there is an effective process in place for the identification and management of real, potential or perceived conflicts of interest;
appointing individuals to CIRO Investor Advisory Panel; and
the performance of such other duties as the Board may delegate or direct from time to time.

Membership

The Committee will consist of at least five directors and may include the Board Chair.
All of the Committee members, including the chair of the Committee (the “Committee Chair”), will at all times be Independent Directors, as defined in the by-laws of CIRO (the “By-Laws”).
The members of the Committee, including the Committee Chair, will be appointed by the Board for one-year terms.
Any member of the Committee may be removed or replaced at any time by the Board (for clarity, subject to the requirements provided for in paragraphs 1 through 3 of this section above) and shall automatically cease to be a member of the Committee upon ceasing to be a director.

Meetings and Reporting to the Board

The Committee will meet regularly and as often as it deems necessary to carry out its responsibilities, but not less than four times a year. Meetings may be called by the Committee Chair or a majority of the members of the Committee.
Meetings are chaired by the Committee Chair, who is responsible for leadership of the Committee and reporting to the Board. If the Committee Chair is not present at any meeting of the Committee, one of the other members of the Committee who is present shall be chosen by the Committee to preside at the meeting.
Attendance by invitation at all or a portion of Committee meetings is determined by the Committee Chair or the Committee’s members, and would normally include the Chief Executive Officer, and such other officers or support staff as may be deemed appropriate. The Board Chair may attend and speak at all meetings of the Committee, whether or not the Chair is a member of the Committee. Each meeting may include a closed in camera session at which only members of the Committee are present.
A majority of the Committee members will constitute a quorum. The act of the majority of the Committee members present at any meeting at which a quorum is present will be the act of the Committee.
The Committee shall maintain written minutes of its meetings, which will be filed with the meeting minutes of the Board.
A written resolution signed by all Committee members entitled to vote on that resolution at a meeting of the Committee is as valid as one passed at a Committee meeting.
The Committee will periodically report to the Board on the Committee’s activities and recommendations, and will report each year with respect to the Committee’s overall activities in compliance with this mandate.
All matters dealt with by the Committee shall be treated as being confidential, subject to reporting to the Board or as the subject matter otherwise requires.
The Committee may obtain, at CIRO’s expense, advice and assistance from internal resources and external advisors or professionals as the Committee may determine to be necessary to carry out its responsibilities.

Specific Responsibilities

The Committee’s specific responsibilities include the following:

Board Composition and Director Nominations

Review and make determinations annually with respect to the independence of the members of the Board, having regard to the definition of independence in CIRO’s Recognition Orders (as defined in the By-Laws), and when necessary, make recommendations to the Board with respect thereto.
Review annually the qualifications, skills and competencies required of Board members, having regard to the Board skills matrix, in order to carry out the Board’s mandate, and make recommendations to the Board for any changes to the composition of the Board that the Committee deems appropriate.
Monitor the effectiveness of the Board and its committees, including their overall size, structure and composition, and make recommendations to the Board with respect thereto.
Identify and recommend to the Board, in accordance with CIRO’s By-laws and the Recognition Orders, qualified candidates to be elected to the Board and subject to satisfaction of a “fit and proper” person assessment. The Board may retain an independent search firm to assist with identifying candidates, if the Committee deems appropriate.
Determine the criteria and eligibility of any proposed nominees in accordance with CIRO’s By-laws and the Recognition Orders with a view to ensuring that the Board, as a whole, reflects the skills, experience, expertise and judgement necessary to effectively oversee the regulatory and other operations of CIRO and to appropriately represent the public interest. In this regard, the Committee will consider the following factors:
1. appropriate geographic representation across Canada;
2. appropriate mix of skills, competencies, individual diversity and characteristics to contribute to a well-functioning Board able to service its mandate having regard to any applicable diversity and inclusion policies of CIRO;
3. the business interests of the candidate or entities with which the candidate is associated;
4. the extent of overlap and/or integration of the boards and/or management between members and entities with which the candidate is associated; and
5. the appropriate resolution of any real, potential or perceived conflicts of interest.
Maintain an evergreen list of potential qualified nominees for election to the Board, having regard to the criteria above.
Recommend directors for appointment to committees of the Board.
Appoint individuals to CIRO Investor Advisory Panel in accordance with CIRO “Investor Advisory Panel Terms of Reference”.

Succession Planning

Oversee the succession process for the Board Chair and contingency plans in the event of the unexpected incapacitation or departure of the Board Chair.
On an annual basis, review and make recommendations to the Board on the appointment or re-appointment of the Board Chair.
Review succession plans for the chairs of each of the Board committees.
The Committee Chair will participate in meetings of the Human Resources Committee with respect to matters relating to CEO succession planning and report to the Committee with respect thereto.

Conflicts of Interest

Oversee the development and implementation of written policies and procedures for the identification and management of real, potential or perceived conflicts of interest, and periodically review and report to the Board as to the appropriateness of such policies and procedures and recommending to the Board for approval any amendments to such policies and procedures.
At the request of the Board or of a director, consider questions of any real, potential or perceived conflicts of interest of Board members and of senior management, and to advise the Board on the resolution of such real, potential or perceived conflict of interest.

General Governance

Monitor and review the overall effectiveness of CIRO’s governance, including:
1. conducting the Board’s governance review as set out in the Recognition Orders;
2. overseeing the process for cooperating and assisting with any reviews of CIRO’s functions conducted by each securities regulatory authority that recognizes CIRO as a self-regulatory organization or an independent third-party acting at the direction of any such regulatory organization;
3. periodically reviewing the appropriateness of CIRO’s governance guidelines, policies and practices, including the identification of governance priorities and the consideration of governance best practices, and making recommendations to the Board with respect to any changes thereto; and
4. annually reviewing the performance, mandate and membership of the Board and each committee of the Board and making recommendations to the Board with respect to such matters.
Ensure that CIRO’s governance practices and policies are transparent and communicated clearly to the public.
Review the quality of the relationship between the Board and management, and the Board’s ability to function independently of management.
Establish and oversee an appropriate process for evaluating the performance of the Board, its committees and each of the directors, on an annual basis, and to report on such evaluations to the Board.
Review the performance of incumbent directors (including the Board Chair) for purposes of determining whether to nominate such directors for re-election.
Review the compensation and expense policy for directors and make recommendations to the Board in respect thereof.
Ensure that there is an appropriate orientation and education program in place for new directors.
Ensure there are annual training programs in place for directors, senior management and staff of CIRO relating to CIRO’s public interest mandate and on developments and trends in corporate governance, industry matters and investor protection.
Oversee the development of and, where appropriate, approve policies and processes designed to ensure high ethical standards and integrity for staff and Board members, including reviewing and recommending to the Board for approval any changes to the codes of conduct applicable to the Board and employees of CIRO.
Periodically review the effectiveness of the policies and procedures for the confidential receipt, retention and treatment of complaints or concerns regarding ethical matters or conflicts of interest and for the protection from retaliation of those who report such complaints or raise such concerns in good faith.
Review any claims of indemnification pursuant to section 9.2 of the By-Laws.
Review and approve the use of Monetary Sanctions (as defined in the Recognition Orders) in accordance with the Recognition Orders.
Consider any other matter which, in the opinion of the Committee or at the request of the Board, would assist the directors to meet their responsibilities in regard to governance matters.
Review at least annually the adequacy of this mandate and recommend any proposed changes to the Board for approval.
Such other matters that are assigned to it, or to the Committee Chair, by the Board.