Entire section Custom print Link Text Only Rich Text Print
  Versions

 

Principle 6 The Board Shall Establish A Clear and Efficient Management Structure

6.1 Establishment of Management Structure. The board shall appoint officers whose authority shall include management and operation of current activities of the company, reporting to and under the direction of the board. The officers shall include at a minimum:

•   a CEO (see "Terms Used in This Code" at the end of this Code),
•   a chief financial officer,
•   a corporate secretary,
•   an internal auditor,

and shall also include such other officers as the board considers appropriate.

6.2 Titles, Authorities, Duties and Reporting Responsibilities. The board shall adopt by-laws prescribing each senior officer's title, authorities, duties and internal reporting responsibilities. This should be done with the advice of the Nominating Committee and in consultation with the CEO, to whom the other officers should normally report. These provisions shall include but should not be limited to the following:

•   the CEO shall have authority to act generally in the company's name, representing the company's interests in concluding transactions on the company's behalf and giving instructions to other officers and company employees,
•   the chief financial officer shall be responsible and accountable for the complete, timely, reliable and accurate preparation of the company's financial statements, in accordance with the accounting standards and policies of the company; and for presenting the board with a balanced and understandable assessment of the company's financial situation, and
•   the corporate secretary's duties shall include arranging, recording and following up on the actions, decisions and meetings of the Board and of the shareholders (both at annual and extraordinary meetings ) in books to be kept for that purpose,
•   The internal auditor's duties shall include providing an independent and objective review of the efficiency of the company's operations. This would include a review of the accuracy and reliability of the company's accounting records and financial reports as well as a review of the adequacy and effectiveness of the company's risk management, control, and governance processes.
Recommendation: The board should also specify any limits which it wishes to set on the authority of the CEO or other officers, such as monetary maximums for transactions which they may authorize without separate board approval.
Recommendation: The corporate secretary should be given general responsibility for reviewing the company's procedures and advising the board directly on such matters. Whenever practical, the corporate secretary should be a person with legal or similar professional experience and training.
Recommendation: At least annually the board shall review and concur in a succession plan addressing the policies and principles for selecting a successor to the CEO, both in emergencies and in the normal course of business. The succession plan should include an assessment of the experience, performance, skills and planned career paths for possible successors to the CEO.