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Guidelines for Corporate Governance

Director Ethics And Code Of Conduct

Our directors are expected to carry out their duties honestly, with integrity and in good faith. They are expected to demonstrate the highest ethical standards and to be accountable for their decisions. Directors are required to comply with all applicable rules concerning conflicts of interest, which can be found in the Governance Rules and Practices Manual.

Every director is required to file a disclosure statement at the start of his or her appointment. After that, each director must file an annual disclosure statement, which is reviewed by the Chair, the President & CEO, the Corporate Secretary and our external auditors. In addition, any director may review the statements upon request to the Corporate Secretary.

Our by-laws require that we report annually in writing on the directors’ compliance with these conflict of interest guidelines. We confirm that all directors complied in all material respects with the rules concerning conflicts of interest in 2017.

Disclosure

Although we are not a listed company, we choose to report against National Policy 58-201, Corporate Governance Guidelines, and the accompanying National Instrument 58-101, Disclosure of Corporate Governance Practices.

Guideline Disclosure
1. The Board of Directors
Disclose independent directors and whether or not majority are independent.
  • Directors who are not independent and explain.
  • If independent directors hold regularly scheduled meetings at which members of management are not in attendance.
  • If the Chair of the Board is an independent director, the identity of the Chair and his or her responsibilities.
  • Disclose the attendance record of directors.
  • All directors are independent with the exception of the President & CEO, who is an employee and executive officer of Vancouver Airport Authority.
  • Independent directors held an in camera session, without the presence of management, at every regular Board and Committee meeting in 2017. This included eight regular Board meetings and 20 Committee and 13 Task Force meetings. In addition, the Finance and Audit Committee, which consists entirely of independent directors, holds separate in-camera sessions with the External Auditor and the Internal Auditor at each meeting they attend.
  • Mary Jordan, the Chair, is an independent director. The Chair’s Terms of Reference can be found at Tab 4 in the Board’s Governance Rules and Practices Manual.
  • The Governance Committee reviews the Chair’s Terms of Reference annually.
  • The Governance Committee reviews director attendance annually. In 2017, there were 28 meetings of the full Board and Board Committees as well as the Annual Public Meeting, two Board Workshops and the Board Retreat. The Board had an average attendance rate of 96 per cent.
2. Board Mandate
  • Disclose the text of the Board’s written mandate.
  • The Administrative Guidelines and Terms of Reference for the Board of directors can be found at Tabs 2 and 3, respectively, in the Board’s Governance Rules and Practices Manual
3. Position Descriptions
  • Whether the Board has developed written position descriptions for the Chair and the Chair of each Board Committee.
  • Whether the Board and CEO have developed a written position description for the CEO.
  • The Terms of Reference for the Chair (Tab 4), Guidelines for Committees (Tab 15b) and Terms of Reference for each individual Committee (Tabs 15c to 15f) can be found in the Board’s Governance Rules and Practices Manual. The latter two effectively guide the Committee Chairs.
  • The Terms of Reference for the President and CEO can be found at Tab 5 in the Board’s Governance Rules and Practices Manual
4. Orientation and Continuing Education
  • What measures the Board takes to orient new directors regarding the role of the Board, its committees and its directors and the nature and operation of the corporation’s business.
  • What measures the Board takes to provide continuing education for its directors and how the Board ensures its directors maintain the skill and knowledge necessary to meet their obligations as directors.
  • The Orientation program includes an Aviation 101 course for all new directors including an introduction to the industry, presentations from each Vice President and an overview of key issues facing Vancouver Airport Authority in the near to medium term. The orientation program also includes a briefing on the governance structure and executive compensation program. An orientation checklist is prepared for each new director and the completed list is circulated to the Governance Committee. The Education and Development program is reviewed annually by the Governance Committee.
  • In terms of ongoing development, the Board receives periodic sessions with either outside or internal experts on topics of importance to the industry. Directors are also informed of external seminars.
5. Ethical Business Conduct
  • Whether the Board has adopted a written code of conduct, how an interested party may obtain a copy and how the Board monitors compliance with its code.
  • Any steps the Board takes to ensure directors exercise independent judgment in considering transactions and agreements in respect of which a director or executive officer has a material interest.
  • Any other steps the Board takes to encourage and promote a culture of ethical business conduct.
  • The Code of Conduct for directors and Rules Concerning Conflicts of Interest can be found at Tab 7 in the Board’s Governance Rules and Practices Manual. In addition, all directors are subject to Vancouver Airport Authority’s new Code of Ethics, which serves as a reference guide for key issues.
  • The Finance and Audit Committee is charged with ensuring that the conflict of interest guidelines are strongly maintained and reviews this matter annually.
  • Each director is required to file an annual disclosure statement. The statements are reviewed by the Chair, President and Corporate Secretary and available for review by any director upon request to the Corporate Secretary.
  • The by-laws require an annual statement on directors’ compliance with its conflict of interest guidelines.
  • Should a director engage in an activity which may be construed as a conflict, the director must make full disclosure to the Chair, copying the Corporate Secretary, who will rule on the conflict in writing. It would be a very rare occurrence for a director or executive to have a material interest in a transaction or agreement being considered by the Board. Should this occur, the director or executive will not receive written material and will recuse him or herself from the Board discussion and decision making.
  • The Chair has appointed the Corporate Secretary to serve as the Designated Officer for the administration of rules for Vancouver Airport Authority employees concerning Conflict of Interest. The Conflict of Interest Policy and form is circulated annually to all budget holders, all members of the Supply Management Department and other key employees.
  • The Board adopted a formal Whistleblower Policy in 2004 and revised the Policy in 2009; copies of the Policy are available upon request to the Corporate Secretary. In addition to internal channels for reporting, the Whistleblower Policy includes an option to report via a third party confidence phone line or website.
  • Periodic reminders of the Whistleblower Policy are distributed to employees and to third-party vendors.
6. Nomination of Directors
  • The process by which the Board identifies new candidates.
  • Whether or not the Board has a nominating committee composed entirely of independent directors.
  • If the Board has a nominating committee, describe the responsibilities, powers and operation of the nominating committee.
  • The Board may appoint up to five directors from the Community at large. The Governance Committee, which is composed entirely of independent directors, acts as the Nominating Committee and is responsible for the recruitment and recommendation of candidates to the Board for its consideration to fill at-large positions.
  • The Governance Committee annually reviews a Director Skills and Experience Matrix to ensure that the matrix continues to be aligned with the strategic direction of the business. It then reviews the skills, knowledge and attributes of current directors—as well as their length of tenure—in order to identify current and upcoming gaps. It also considers the Board Diversity Policy.
  • The Governance Committee may engage assistance from an external consultant to help with this process.
  • For director positions nominated by nominating entities, the Chair reviews the Board Matrix with the entity and discusses the skills and experience currently required by the Board as well as our Diversity Policy and requests that the entity keep these in mind in making its nomination.
  • The Governance Committee’s Terms of Reference can be found at Tab 15d in the Board’s Governance Rules and Practices Manual.
7. Compensation
  • The process by which the Board determines the compensation for directors and officers.
  • Whether or not the Board has a compensation committee composed entirely of independent directors.
  • If the Board has a compensation committee, describe the responsibilities, powers and operation of the committee.
  • If a compensation consultant or advisor has, at any time since the beginning of the corporation’s most recently completed financial year, been retained to assist in determining compensation for any of the issuer’s directors and officers, disclose the identity of the consultant or adviser and summarize the mandate for which they have been retained.
  • See Executive and Board Compensation.
  • The Human Resources and Compensation Committee is composed entirely of independent directors.
  • The Human Resources and Compensation Committee’s Terms of Reference can be found in the Board’s Governance Rules and Practices Manual.
  • The Human Resources and Compensation Committee engaged Mercer to provide independent compensation advice with regard to the executive compensation plan. The mandate is summarized the Executive and Board Compensation page.
8. Other Board Committees
  • Disclose whether or not the Board has standing committees other than audit, compensation and nominating committees and describe their function.
  • The Board also has a Planning and Development Committee. Its Terms of Reference can be found in the Board’s Governance Rules and Practices Manual.
9. Assessments
  • Disclose whether or not the Board, its committees and individual directors are regularly assessed with respect to their effectiveness and contribution and describe the process used for the assessment.
  • This is an annual process to review Board, Committee and individual director effectiveness, which is set out in Tab 10 – The Board Evaluation Process in the Board’s Governance Rules and Practices Manual.
  • In 2017, the Board engaged Watson Inc. to conduct both a Board and Individual Director Peer Evaluation process.
  • The Board has adopted a three-year evaluation cycle which alternates between in-depth surveys, single-issue surveys and lighter surveys on Board functioning. In 2017, the Board conducted a single-issue survey following up on the implementation of recommendations arising from a Board Culture Workshop. The evaluation consisted of thought-starter questions and a one-on-one interview conducted by Watson.
  • The Individual Director Peer Evaluation results were tabulated by Watson and discussed with the individual director and the Board Chair only.
10. Director Term Limits and Other Mechanisms of Board Renewal
  • Disclose whether or not the Board has adopted term limits for the directors on its Board or other mechanism of Board renewal and, if so, include a description of those director term limits or other mechanisms of Board renewal.
  • Vancouver Airport Authority has adopted term limits. As set out in Section 1.4 of the corporate by-laws, directors may serve a maximum of nine years, three terms of three years each. The by-law includes a provision that allows it to appoint a director for an additional 10th year in circumstances where the turnover on the Board in a given year would be greater than two.
11. Policies Regarding the Representation of Women on the Board
  • Disclose whether the Board has adopted a written policy relating to the identification and nomination of women directors.
  • The Board’s Diversity Policy includes a target of half the Board membership being drawn from the four groups designated under applicable federal legislation: women, visible minorities, persons with disabilities and aboriginal peoples. Five seats on the Board are currently occupied by women.
12. Consideration of the Representation of Women in the Director Identification and Selection Process
  • Disclose whether and, if so, how the Board or nominating committee considers the level of representation of women on the Board in identifying and nominating candidates for election or re-election to the Board.
  • As set out in our Diversity Policy, the Governance Committee specifically instructs third-party search firms to identify women and other diversity candidates, where possible, who have the skill sets and experience required at a given time. It has successfully recruited women with experience in finance, the airline industry and the new economy/technology sector. We also encourage our nominating entities to consider women candidates along with other candidates who reflect the diversity of our community in their nomination processes.
13. Consideration Given to the Representation of Women in Executive Officer Appointments
  • Disclose whether and, if so, how the corporation considers the level of representation of women in executive officer positions when making executive officer appointments.
  • Vancouver Airport Authority has a policy that says we will strive to create a workplace that reflects the diversity of the communities we serve and this includes a commitment to diversity and inclusion in our management team. We support the Employment Equity Act and take measures to ensure fair employment practices across our organization. We are an equal opportunity employer and encourage applications from women, visible minorities, aboriginal peoples and persons with disabilities.
14. Board’s Targets Regarding the Representation of Women on the Board and in Executive Officer Positions
  • Disclose whether the corporation has adopted a target (percentage or range by a set date) regarding women on the corporation’s Board.
  • Disclose whether the corporation has adopted a target regarding women in executive officer positions of the corporation.
  • The Board Diversity Policy includes a target that half of the Board will be made of members from the four designated groups: women, visible minorities, persons with disabilities and aboriginal persons.
  • Vancouver Airport Authority has a long-term stretch target of 50 per cent of all management positions, including executive roles, being held by women. For executive roles, we have actively recruited into management positions below the executive ranks, which is a pool from which future corporate officers may be drawn. As of the end of December 2017, women accounted for 40 per cent of the management team, excluding those in executive positions. This exceeds the 30.9% representation of women in middle and other management roles across Canada.
15. Number of Women on the Board and in Executive Officer Positions
  • Disclose the number and proportion (in percentage terms) of directors on the Board who are women.
  • Disclose the number and proportion (in percentage terms) of executive officers, including all major subsidiaries of the corporation, who are women.
  • In 2017, there were five women, including the Chair, on the Board. This represents 36 per cent of the Board, which has a total of 14 directors. It exceeds the average of 22.6 per cent on Financial Post 500 Boards.
  • In 2017, there were four women Vice Presidents, which constituted 44 per cent of the nine officers of the company. This exceeds the 27.4 per cent representation of women senior managers across Canada.