Fortis Inc. (the "Corporation") does not have an executive committee of the
Board. Each committee has a written mandate which sets out in detail the
activities or areas of the Corporation’s business to which the committee is
required to devote its attention. All committees are currently composed of
independent and unrelated directors.
Governance and Nominating Committee
The mandate of the Governance and Nominating Committee requires
the committee, among other things, to:
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(i)
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develop and recommend to the Board the
Corporation’s approach to corporate governance issues;
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(ii) |
propose to the Board new nominees for
election to the Board;
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(iii) |
carry out procedures specified by the
Board for assessing the effectiveness of the Board, the directors, and each
Board committee;
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(iv)
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approve the engagement of an outside
expert, or experts, by an individual director at the Corporation’s expense; and
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(v)
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review and make recommendations to the
Board with respect to the adequacy and form of the compensation of directors. |
The members of the Governance and Nominating Committee, who are
all independent and unrelated, are JOHN S. MCCALLUM (Chair),
BRUCE CHAFE, LINDA L. INKPEN, HARRY
MCWATTERS and ROY P. RIDEOUT.
Human Resources Committee
The mandate of the Human Resources Committee requires the
committee, among other things, to:
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(i)
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assist and advise the Board and CEO in
appointing senior management;
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(ii) |
monitor programs for
training and developing senior management and planning for succession within
the ranks of senior management;
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(iii) |
oversee the form and adequacy of the
compensation and benefits provided by the Corporation to its senior management;
and
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(iv)
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administer the Corporation’s stock option
plans. |
The members of the Human Resources Committee, who are all
independent and unrelated, are ROY P. RIDEOUT (Chair), BRUCE
CHAFE, GEOFFREY F. HYLAND, DAVID G. NORRIS
and MICHAEL A. PAVEY.
Audit Committee
Mandate
Objective
The Audit Committee shall provide assistance to the Board by
overseeing the external audit of the Corporation’s annual financial statements
and the accounting and financial reporting and disclosure processes and
policies of the Corporation.
Definitions
In this mandate:
“AIF” means the Annual Information Form filed by the Corporation;
“Committee” means the Audit Committee appointed by the Board pursuant
to this mandate;
“Board” means the board of directors of the Corporation;
“CICA” means the Canadian Institute of Chartered Accountants or any
successor body;
“Corporation” means Fortis Inc.;
“Director” means a member of the Board;
“Financially Literate” means having the ability to read and understand
a set of financial statements that present a breadth and level of complexity of
accounting issues that are generally comparable to the breath and complexity of
the issues that can reasonably be expected to be present in the Corporation’s
financial statements;
“External Auditor” means the firm of chartered accountants, registered
with the Canadian Public Accountability Board or its successor, and appointed
by the shareholders of the Corporation to act as External Auditor of the
Corporation;
“Independent” means free from any direct or indirect material
relationship with the Corporation which could, in the view of the Board,
reasonably interfere with the exercise of a Member’s independent judgment as
more particularly described in Multilateral Instrument 52-110;
“Internal Auditor” means the person employed or engaged by the
Corporation to perform the internal audit function of the Corporation;
“Management” means the senior officers of the Corporation;
“MD&A” means the Corporation’s management discussion and analysis
prepared in accordance with National Instrument 51-102F1 in respect of the
Corporation’s annual and interim financial statements; and
“Member” means a Director appointed to the Committee.
Composition and Meetings
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1. |
The Committee shall be appointed annually
by the Board and shall be comprised of three or more Directors; all of whom are
Independent and Financially Literate and none of whom is a member of Management
or an employee of the Corporation or of any affiliate of the Corporation.
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2. |
The Board shall appoint a Chair of the
Committee on the recommendation of the Corporation’s Governance and Nominating
Committee, or such other committee as the Board may authorize.
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3. |
The Committee shall meet at least four
times each year and shall meet at such other times during the year as it deems
appropriate. Meetings of the Committee shall be held at the call (i) of the
Chair of the Committee, or (ii) of any two Members, or (iii) of the External
Auditor.
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4. |
The President and Chief Executive Officer,
the Vice President, Finance and Chief Financial Officer, the External Auditor
and the Internal Auditor, shall receive notice of, and (unless otherwise
determined by the Chair of the Committee) shall attend all meetings of the
Committee.
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5. |
At any meeting of the Committee, a quorum
shall be a simple majority of the Members.
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6. |
The Chair of the Committee shall act as
chair of all meetings of the Committee at which the Chair is present. In the
absence of the Chair from any meeting of the Committee, the Members present at
the meeting shall appoint one of their Members to act as Chair of the meeting.
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7. |
Unless otherwise determined by the Chair
of the Committee, the Secretary of the Corporation shall act as secretary of
all meetings of the Committee.
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Oversight of the External Audit and the Accounting and Financial
Reporting and Disclosure Processes and Policies
The primary purpose of the Committee is oversight of the
Corporation’s external audit and the accounting and financial reporting and
disclosure processes and policies on behalf of the Board. Management of the
Corporation is responsible for maintaining appropriate accounting and financial
reporting principles, policies, internal controls and procedures that provide
for compliance with accounting standards and applicable laws and regulations.
Management is responsible for the preparation and integrity of the financial
statements of the Corporation.
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Oversight of the External Audit
The oversight of the external audit pertains to the audit of the
Corporation’s annual financial statements.
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1.1. |
The Committee is responsible for the
evaluation and recommendation of the External Auditor to be proposed by the
Board for appointment by the shareholders.
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1.2. |
In advance of each audit, the Committee
shall review the External Auditor’s audit plan including the general approach,
scope and areas subject to risk of material misstatement.
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1.3. |
The Committee is responsible for approving
the terms of engagement and fees of the External Auditor.
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1.4. |
The Committee shall review and discuss the
Corporation’s annual audited financial statements, together with the External
Auditor’s report thereon, and MD&A with Management and the External Auditor
to gain reasonable assurance as to the accuracy, consistency and completeness
thereof. The Committee shall meet privately with the External Auditor. The
Committee shall oversee the work of the External Auditor and resolve any
disagreements between Management and the External Auditor.
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1.5. |
The Committee shall use reasonable
efforts, including discussion with the External Auditor, to satisfy itself as
to the External Auditor’s independence as defined in the CICA Assurance
Handbook Section 5751.
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1.6. |
The Committee shall be responsible for the
oversight of the Internal Auditor.
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Oversight of the Accounting and Financial Reporting and
Disclosure Processes
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2.1. |
The Committee shall recommend the annual
audited financial statements together with the MD&A for approval by the
Board.
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2.2. |
The Committee shall review the interim
unaudited financial statements with the External Auditor and Management,
together with the External Auditor’s review engagement report thereon.
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2.3. |
The Committee shall review and approve
publication of the interim unaudited financial statements together with the
interim MD&A and earnings press release on behalf of the Board.
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2.4. |
The Committee shall review and recommend
approval by the Board of the Corporation’s AIF, Management Information
Circular, any prospectus and other financial information or disclosure
documents to be issued by the Corporation prior to their public release.
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2.5. |
The Committee shall use reasonable efforts
to satisfy itself as to the integrity of the Corporation’s financial
information systems, internal control over financial reporting and the
competence of the Corporation’s accounting personnel and senior financial
management responsible for accounting and financial reporting.
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Oversight of Policies
The Committee shall review and report to the Board on policies
relating to the accounting and financial reporting and disclosure processes and
the oversight of the external audit of the Corporation’s financial statements.
In particular, the Committee shall review and report on policies dealing with:
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3.1. |
the establishment and implementation of
procedures for the receipt, retention and treatment of complaints received
regarding accounting, internal control or auditing matters and the confidential
and anonymous submission of concerns regarding questionable accounting or
auditing matters;
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3.2. |
the delegation of authority to the
Committee regarding the use of financial derivative instruments and designation
of hedging relationships;
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3.3. |
the Corporation’s pre-approval of audit
and non-audit services provided by the External Auditor; and,
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3.4. |
the review, approval and monitoring of
hiring personnel from the External Auditor.
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Other
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The Committee shall perform such other functions, including the
periodic review of this mandate, as may from time to time be assigned to the
Committee by the Board.
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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 authorize compensation for any such counsel or advisors engaged
by the Committee.
Reporting
The Chair of the Committee, or another designated Member, shall
report to the Board at each regular meeting on those matters which were dealt
with by the Committee since the last regular meeting of the Board.
The education and experience of each Audit Committee Member that
is relevant to such Member’s responsibilities as a Member of the Audit
Committee are set out below. As at December 31, 2007, the members of the Audit
Committee, who are all independent and unrelated, are outlined below.
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Fortis Audit Committee
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| Name |
Relevant Education and
Experience |
DAVID G. NORRIS (Chair)
St. John’s, NL |
Mr. Norris graduated with a
Bachelor of Commerce from Memorial University of Newfoundland and a Master of
Business Administration from McMaster University. Mr. Norris has been a
financial and management consultant since 2001, prior to which he was Executive
Vice-President, Finance and Business Development, Fishery Product International
Limited. |
PETER E. CASE
Freelton, ON |
Mr. Case retired in February 2003
as Executive Director, Institutional Equity Research at CIBC World Markets. Mr.
Case was awarded a Bachelor of Arts and a Master of Business Administration
from Queen’s University and a Master of Divinity from Wycliffe College,
University of Toronto. |
BRUCE CHAFE
St. John’s, NL |
Mr. Chafe is a Chartered Accountant
and was appointed Fellow of the Chartered Accountants in 1990. He is a retired
senior partner of Deloitte & Touche LLP.
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JOHN S. McCALLUM
Winnipeg, MN |
Mr. McCallum is a Professor of
Finance at the University of Manitoba. Mr. McCallum graduated from the
University of Montreal with a Bachelor of Arts (Economics) and a Bachelor of
Science (Mathematics). He was awarded a Master of Business Administration from
Queen’s University and a PhD in Finance from the University of Toronto. |
The Board has determined that each of the Audit Committee
Members is independent and financially literate. Independent means free from
any direct or indirect material relationship with the Corporation which, in the
view of the Board, could reasonably be expected to interfere with the exercise
of a Member’s independent judgment as more particularly described in
Multilateral Instrument 52-110 – Audit Committees. Financially literate means
having the ability to read and understand a set of financial statements that
present a breadth and level of complexity of accounting issues that are
generally comparable to the breath and complexity of the issues that can
reasonably be expected to be raised by the Corporation’s financial
statements.
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