STATEMENT OF CORPORATE GOVERNANCE PRACTICES
Effective June 2005, National Policy 58-201 -- Corporate Governance Guidelines set out an amended series of guidelines for effective corporate governance. The guidelines address matters such as the constitution and independence of corporate boards, the function to be performed by boards and their committees and the effectiveness of their board members. National Instrument 58-101 - Disclosure of Corporate Governance Practices ("NI-58-101
") requires the disclosure by each listed corporation of its approach to corporate governance with reference to the guidelines, as it is recognized that the unique characteristics of individual corporations will result in varying degrees of compliance.
THE BOARD OF DIRECTORS
The Board is responsible for overseeing the management of the Company and the conduct of the Company's affairs generally. As of the Annual and Special Meeting of Shareholders held on March 27, 2014, the Board consists of five directors.
NI 58-101 defines an "independent director" as a director who has no direct or indirect material relationship with the Company. A "material relationship" is defined as a relationship which, in the view of the Board, could be reasonably expected to interfere with such member's independent judgment.
The Board is currently composed of six directors. The five independent directors are Michael Newbury, J. Birks Bovaird, Gordon McKinnon, Yvan Champagne and Dr. Samuel Peralta
(who is also a special strategic advisor to the Board. The other director, H. Vance White
is considered to be non-independent by virtue of his role as an officer with the Company. H. Vance White is also President and CEO of the Company.
Certain directors of the Company are also directors of other reporting issuers (or equivalent) in a Canadian jurisdiction or a foreign jurisdiction. The following is a list of those other directorships:
|Name of Director
||Other reporting issuer (or equivalent in a foreign jurisdiction)
|H. Vance White
|J. Birks Bovaird
Energy Fuels Inc.
||Canadian Orebodies Inc.|
Capha Pharmaceuticals Inc.
Fox River Resources Corp.
MacDonald Mines Exploration Ltd.
|Dr. Samuel Peralta
||Cobalt Blockchain Inc.|
ORIENTATION AND CONTINUING EDUCATION
The Company does not provide formal continuing education to its directors. The Board regularly receives advice from its solicitors, auditors and other advisers regarding current developments and best practices as to corporate and and securities law matters. In addition, historically, those individuals recruited to the Board are professionals and business people who have extensive experience in the mineral resources exploration industry, or with other public companies, and are therefore able to draw on that experience to make valuable contributions to the management of the Company.
ETHICAL BUSINESS CONDUCT
The role of the Board is to oversee the conduct of the Company's business, to set corporate policy and to supervise management, which is responsible to the Board for the day-to-day conduct of business.
However, given the size of the Company, all material transactions are addressed at Board level.
The Board discharges six specific responsibilities as part of its overall stewardship responsibility.
- Strategic Planning Process: Given the Company's size, the strategic plan is elaborated directly by management, with input from, and the assistance of, the Board.
- Managing Risk: The Board directly oversees most aspects of the business of the Company and thus does not require the elaboration of systems or the creation of committees to effectively monitor and manage the principal risks of all aspects of the business of the Company.
- Appointing, Training and Monitoring Senior Management: No formal system of selection, training and assessment of management has been established; however, the Board monitors management's performance, which is measured against the overall strategic plan, through reports and regular meetings with management.
- Communication Policy: It is and always has been the unwritten policy of the Board to communicate effectively with its shareholders, other stakeholders and the public generally through statutory filings and mailings, as well as news releases. The Company's shareholders are provided the opportunity to make comments to the Board by telephone or written communications, or at shareholder meetings. In addition, in August of 2007, the Board adopted a disclosure policy with the objective of ensuring that communications to the investing public about the Company are in compliance with all applicable regulatory requirements, are timely, factual and accurate, and are broadly disseminated in accordance with all applicable legal and regulatory requirements. The policy provides guidance on the disclosure of material information, a process for the review of Company documents, confidentiality requirements, and other requirements concerning press releases, designation of spokespersons, and other communication with third parties. Information relating to the Company is filed on the System for Electronic Data Analysis and Retrieval ("SEDAR") and can be accessed on the internet at www.sedar.com, as well as on the Company's website at www.noblemineralexploration.com.
- Insider Trading Policy: The Company's insider trading policy regulates trading in the Company's securities by directors, officer, employees, and certain third party contractors. The policy also imposes restrictions in the disclosure and use of material non-public information concerning the Company.
- Ensuring the Integrity of the Company's Internal Control and Management System: The Company has adopted a number of policies to assist the Board in effectively tracking and monitoring the implementation and operation of approved strategies. Such policies include a whistle-blower and complaints policy describing how to submit complaints, who manages the complaints, and how confidentiality is maintained.
NOMINATION OF DIRECTORS
The Board performs most of the function of a nominating committee with respect to the appointment and assessment of directors. The Board believes that this is a practical approach at this stage of the Company's development and given the small size of the Board.
While there are no specific criteria for Board membership, the Company attempts to attract and maintain directors with business knowledge and a particular knowledge of mineral exploration and development or other areas such as finance which would assist in guiding the Company's officers in the performance of their roles.
Nominating, Compensation and Governance Committee:
J. Birks Bovaird (Chair)
The Nominating, Compensation and Governance Committee of the Board was established in September of 2007. All three directors are independent directors under MI 52-110. The mandate of this committee is to establish appropriate levels of compensation for the directors, officers, contractors and consultants of the Company.
Michael Newbury (Chair)
J. Birks Bovaird
Composition of the Audit Committee
National Instrument 52-110 ("NI 52-110
") requires the Company, as a venture issuer, to disclose in its management information circular certain information concerning the constitution of its audit committee (the "Audit Committee
") and its relationship with its Independent Auditor. As defined in NI 52-110, a majority of the members of the Audit Committee are independent.
All members of the Audit Committee are considered to be financially literate.
Mr. Michael Newbury
is a banker and project finance specialist with experience in the operation and financing of natural resource projects, primarily mining projects. He is also a director and officer of a number of junior mining companies. His background in project finance provides him with significant experience in relation to the preparation, audit and analysis of financial statements of corporations such as the Company, as well as with the internal controls and procedures for financial reporting that are in place within such corporations.
Mr. Birks Bovaird:
For a majority of his career, Mr. Bovaird's focus has been the provision and implementation of corporate financial consulting and strategic planning services. He was previously the Vice President of Corporate Finance for one of Canada's major accounting firms. He presently is the Chairman of Energy Fuels Inc. the premier US based integrated uranium miner listed on the Toronto Stock Exchange (TSX:EFR) and New York Stock Exchange (NYSE:UUUU). He is Chairman of GTA Resources and Mining Inc. as well as a member of the audit committee (TSX:GTA). He has previously been involved with numerous public resource companies, both as a member of management and as a director.
Birks is an independent director and is a graduate of the Canadian Director Education Program and holds an ICD.D designation.
Mr. Gordon McKinnon
graduated with an Honours Bachelor degree in Management and Organizational Studies from the University of Western Ontario in 2006. He currently serves as President, CEO and a Director of Canadian Orebodies Inc. Mr. McKinnon was a co-founder of Mineral Streams Inc., a private mineral royalty company that was recently sold to AuRico Metals Inc. for $6.85M. Mr. McKinnon also sits on the board of directors for Phoscan Chemical Corporation, FPS Pharma Inc., and Noble Mineral Exploration Inc. He was previously Manager of Corporate Development with Baltic Resources Inc., a company which was acquired for over $70 million.
There have been no recommendations of the Audit Committee, since the commencement of the Company's most recently completed financial year, which the Board has not adopted.
Audit Committee Oversight
There have been no recommendations of the Audit Committee, since the commencement of the Company's most recently completed financial year, which the Board has not adopted.
Pre-Approval Policies and Procedures
The Audit Committee has not adopted specific policies and procedures for the engagement of non-audit services.
Charter of the Audit Committee of the Board of Directors
The Audit Committee (the "Committee
") is appointed by the Board of Directors (the "Board
") of the Corporation.
The Committee has the authority to conduct any investigation appropriate to its responsibilities, and it may request the external auditors as well as any officer of the Corporation, or outside counsel for the Corporation, to attend a meeting of the Committee or to meet with any members of, or advisors to, the Committee. The Committee shall have unrestricted access to the books and records of the Corporation and has the authority to retain, at the expense of the Corporation, special legal, accounting, or other consultants or experts to assist in the performance of the Committee's duties.
The Committee shall review and assess the adequacy of this Charter annually and submit any proposed revisions to the Board for approval.
In fulfilling its responsibilities, the Committee will carry out the specific duties set out in Part III of this Charter.
II AUTHORITY OF THE AUDIT COMMITTEE
The Committee shall have the authority to:
A Independent Auditors
- engage independent counsel and other advisors as it determines necessary to carry out its duties;
- set and pay the compensation for advisors employed by the Committee; and
- communicate directly with the external auditors.
B Financial Accounting and Reporting Process
- The Committee shall recommend to the Board the external auditors to be nominated, shall set the compensation for the external auditors, provide oversight of the external auditors and shall ensure that the external auditors report directly to the Committee.
- The Committee shall be directly responsible for overseeing the work of the external auditors, including the resolution of disagreements between management and the external auditors regarding financial reporting.
- The Committee shall review the external auditors' audit plan, including scope, procedures and timing of the audit.
- The Committee shall review the results of the annual audit with the external auditors, including matters related to the conduct of the audit.
- The Committee shall obtain timely reports from the external auditors describing critical accounting policies and practices, alternative treatments of information within generally accepted accounting principles that were discussed with management, their ramifications, and the external auditors' preferred treatment and material written communications between the Corporation and the external auditors.
- The Committee shall pre-approve all non-audit services not prohibited by law to be provided by the external auditors.
- The Committee shall review fees paid by the Corporation to the external auditors and other professionals in respect of audit and non-audit services on an annual basis.
- The Committee shall review and approve the Corporation's hiring policies regarding partners, employees and former partners and employees of the present and former auditors of the Corporation.
- The Committee shall monitor and assess the relationship between management and the external auditors and monitor and support the independence and objectivity of the external auditors.
C Other Responsibilities
- The Committee shall review the annual audited financial statements to satisfy itself that they are presented in accordance with generally accepted accounting principles and report thereon to the Board and recommend to the Board whether or not same should be approved prior to their being filed with the appropriate regulatory authorities. The Committee shall also review the interim financial statements. With respect to the annual audited financial statements, the Committee shall discuss significant issues regarding accounting principles, practices, and judgments of management with management and the external auditors as and when the Committee deems it appropriate to do so. The Committee shall satisfy itself that the information contained in the annual audited financial statements is not significantly erroneous, misleading or incomplete and that the audit function has been effectively carried out.
- The Committee shall review management's discussion and analysis relating to annual and interim financial statements, earnings press releases, and any other public disclosure documents that are required to be reviewed by the Committee under any applicable laws prior to their being filed with the appropriate regulatory authorities.
- The Committee shall meet no less frequently than annually with the external auditors and the Chief Financial Officer or, in the absence of a Chief Financial Officer, with the officer of the Corporation in charge of financial matters, to review accounting practices, internal controls and such other matters as the Committee, Chief Financial Officer or, in the absence of a Chief Financial Officer, with the officer of the Corporation in charge of financial matters, deems appropriate.
- The Committee shall be satisfied that adequate procedures are in place for the review of the Corporation's public disclosure of financial information extracted or derived from the Corporation's financial statements other than earnings press releases, and periodically assess the adequacy of these procedures.
- The Committee shall establish procedures for:
- the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters; and
- the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.
- The Committee shall inquire of management and the external auditors about significant risks or exposures, both internal and external, to which the Corporation may be subject, and assess the steps management has taken to minimize such risks.
- The Committee shall review the post-audit or management letter containing the recommendations of the external auditors and management's response and subsequent follow-up to any identified weaknesses.
- The Committee shall ensure that there is an appropriate standard of corporate conduct including, if necessary, adopting a corporate code of ethics for senior financial personnel.
- The Committee shall provide oversight to related party transactions entered into by the Corporation.
The Committee shall perform any other activities consistent with this Charter and governing law, as the Committee or the Board deems necessary or appropriate.
IV COMPOSITION AND MEETINGS
- The Committee and its membership shall meet all applicable legal, regulatory and listing requirements, including, without limitation, securities laws, the listing requirements of the TSX Venture Exchange, the Business Corporations Act (Ontario) and all applicable securities regulatory authorities.
- The Committee shall be composed of three or more directors as shall be designated by the Board from time to time, one of whom shall be designated by the Board to serve as Chair.
- The Committee shall meet at least quarterly, at the discretion of the Chair or a majority of its members, as circumstances dictate or as may be required by applicable legal or listing requirements. A minimum of two and at least 50% of the members of the Committee present either in person or by telephone shall constitute a quorum.
- If within one-half of an hour of the time appointed for a meeting of the Committee, a quorum is not present, the meeting shall stand adjourned to the same time on the next business day following the date of such meeting at the same place. If at the adjourned meeting a quorum as hereinbefore specified is not present within one-half of an hour of the time appointed for such adjourned meeting, such meeting shall stand adjourned to the same time on the next business day following the date of such meeting at the same place. If at the second adjourned meeting a quorum as hereinbefore specified is not present, the quorum for the adjourned meeting shall consist of the members then present.
- If and whenever a vacancy shall exist, the remaining members of the Committee may exercise all of its powers and responsibilities so long as a quorum remains in office.
- The time and place at which meetings of the Committee shall be held, and procedures at such meetings, shall be determined from time to time by, the Committee. A meeting of the Committee may be called by letter, telephone, facsimile, email or other communication equipment, by giving at least 48 hours notice, provided that no notice of a meeting shall be necessary if all of the members are present either in person or by means of conference telephone or if those absent have waived notice or otherwise signified their consent to the holding of such meeting.
- Any member of the Committee may participate in a meeting of the Committee by means of conference telephone or other communication equipment, and the member participating in a meeting pursuant to this paragraph shall be deemed, for purposes hereof, to be present in person at the meeting.
- The Committee shall keep minutes of its meetings which shall be submitted to the Board. The Committee may, from time to time, appoint any person who need not be a member, to act as a secretary at any meeting.
- The Committee may invite such officers, directors and employees of the Corporation and its subsidiaries as it may see fit, from time to time, to attend meetings of the Committee.
- Any matters to be determined by the Committee shall be decided by a majority of votes cast at a meeting of the Committee called for such purpose. Actions of the Committee may be taken by an instrument or instruments in writing signed by all members of the Committee, and such actions shall be effective as though they had been decided by a majority of votes cast at a meeting of the Committee called for such purpose. All decisions or recommendations of the Committee shall require the approval of the Board prior to implementation.
MNP LLP, Chartered Accountants
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