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.
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The members of the Governance and Nominating Committee, who are
all independent and unrelated, are JOHN S. MCCALLUM (Chair), FRANK J. CROTHERS,
HARRY MCWATTERS, RONALD D. MUNKLEY, DAVID G. NORRIS 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 all incentive compensation
plans and arrangements including the 2006 Stock Option Plan, the Short-Term
Incentive plan, the Performance Share Unit Plan and any other stock option,
stock appreciation rights, restricted share, or other form of incentive
compensation plans. |
The members of the Human Resources Committee, who are all
independent and unrelated, are ROY P. RIDEOUT (Chair), IDA
GOODREAU, RONALD D. MUNKLEY , DAVID G. NORRIS and MICHAEL A.
PAVEY.
Audit Committee
Mandate
The text of the Corporation’s Audit Committee Mandate is detailed below.
Objective
The 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, 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;
“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 (3) or more Directors, each of
whom is 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 (4)
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 (2) 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. |
A quorum at any meeting of the Committee
shall be three (3) 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 the selection, implementation and maintenance of appropriate accounting and
financial reporting principles and policies and 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 Canadian Auditing Standard
– 260.
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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 notes thereto, the
interim MD&A and earnings media 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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2.6. |
The Committee shall be responsible for the
oversight of the Internal Auditor.
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2.7. |
The Committee shall monitor and report on the
development of the Enterprise Risk Management Program. |
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Oversight of the Audit Committee Mandate and Policies
On a periodic basis, the Committee shall review and report to
the Board on the Audit Committee Mandate as well as on the following policies:
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3.1. |
Reporting Allegations of Suspected
Improper Conduct and Wrongdoing Policy;
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3.2. |
Derivative Financial Instruments and
Hedging Policy;
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3.3. |
Pre-Approval of Audit and Non-Audit
Services Policy;
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3.4. |
Hiring of Employees from Independent
Auditing Firms Policy;
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3.5. |
The Internal Audit Role and Function
Policy; and
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3.6. |
any other policies that may be
established, from time to time, relating to accounting and financial reporting
and disclosure processes; oversight of the external audit of the Corporation's
financial statements; and oversight of the internal audit function.
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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.
Other
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The Committee shall perform such other functions as may, from
time to time, be assigned to the Committee by the Board.
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The Committee may approve, in circumstances that it considers appropriate, the
engagement by the Committee or any Director of outside advisors or persons
having special expertise at the expense of the Corporation.
Pre-Approval Policies and Procedures
The Audit Committee has established a policy which requires
pre-approval of all audit and non-audit services provided to the Corporation
and its subsidiaries by the Corporation's External Auditor. The Pre Approval of
Audit and Non-Audit Services Policy describes the services which may be
contracted from the External Auditor and the limitations and authorization
procedures related thereto. This policy defines services such as bookkeeping,
valuations, internal audit and management functions which may not be contracted
from the External Auditor and establishes an annual limit for permissible
non-audit services not greater than the total fee for audit services. Audit
Committee pre-approval is required for all audit and non-audit services
Education and Experience
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. Members of the Audit Committee are:
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Fortis Audit Committee
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| Name |
Relevant Education and
Experience |
PETER E.
CASE (Chair)
Kingston, Ontario |
Mr. Case retired in February 2003
as Executive Director, Institutional Equity Research at CIBC World Markets. He
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. |
DOUGLAS J. HAUGHEY
Calgary, Alberta |
Mr. Haughey is President and Chief
Executive Officer of Provident Energy Ltd. He graduated from the University of
Regina with a Bachelor of Administration and from the University of Calgary
with a Master of Business Administration. Mr. Haughey also holds an ICD.D
designation from the Institute of Corporate Directors.
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JOHN S. McCALLUM
Winnipeg, Manitoba |
Mr. McCallum is a Professor of
Finance at the University of Manitoba. He graduated from the University of
Montreal with a Bachelor of Arts (Economics) and a Bachelor of Science
(Mathematics). Mr. McCallum was awarded a Master of Business Administration
from Queen's University and a PhD in Finance from the University of Toronto. |
DAVID G. NORRIS
St. John's, Newfoundland and Labrador |
Mr. Norris has been a financial and
management consultant since 2001, prior to which he was Executive
Vice-President, Finance and Business Development, Fishery Products
International Limited. He graduated with a Bachelor of Commerce from Memorial
University of Newfoundland and a Master of Business Administration from
McMaster University.
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MICHAEL A. PAVEY
Moncton, New Brunswick |
Mr. Pavey retired as Executive Vice President and
Chief Financial Officer of Major Drilling Group International Inc. in September 2006. Prior to
joining Major Drilling Group International Inc. in 1999, he held senior executive positions with
a major western Canadian integrated electric utility. Mr. Pavey graduated from University of Waterloo
with a Bachelor of Applied Science (Mechanical Engineering) and from McGill University with
a Master of Business Administration.
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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 consolidated financial
statements.
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