Erdene is committed to promoting ethical conduct in the operation of its business. The company understands that effective governance practices must be embedded in the culture and operations of the company. This philosophy is captured in written policies and procedures, which play an integral role in ensuring Erdene maintains its standards. These policies and procedures have been adopted by the Board of Directors, and are intended to ensure the integrity of company performance. Erdene’s officers and employees are required to perform each of their duties with integrity, and in compliance with the rules which govern the company’s business.
The following describes the company’s system of corporate governance.
The Board remains committed to ensuring the long-term viability and profitability of the company, as well as the well-being of its employees and of the communities in which it operates. The Board of Directors is responsible for the stewardship of Erdene through the supervision of the business and management of the company. This mandate is accomplished directly and through five committees, the Audit Committee, the Compensation Committee, the Corporate Governance and Disclosure Policy Committee, the Pre-Clearance Committee, and the Technical Committee.
The strategic planning and business objectives developed by Erdene’s management are submitted to and reviewed by the full Board of Directors, both on a formal annual basis and an ongoing basis through regular interim reports from management. The Board also reviews and approves the annual financial statements, annual report, budget, management proxy information circulars, material press releases, decisions as to material acquisitions not within the budget, and the grant of stock options.
Given the size and relative stability of the company’s Board of Directors, there is no formal program for the orientation and education of new recruits to the Board. Erdene does, however, ensure that all new directors receive a complete package outlining the securities law obligations and restrictions on Board members and the company, as well as a copy of all its policies.
The Board meets a minimum of four times a year and more frequently if required.
Four of the Board’s five directors are “independent” within the meaning of applicable securities legislation. An independent director is defined to be a director who has no direct or indirect relationship with the Corporation which could, in the view of the Board, be reasonably expected to interfere with the exercise of a member’s independent judgment.
The Board is satisfied that it maintains adequate and appropriate independence from management. All directors, each of whom has considerable business experience, are expected and encouraged to exercise their independent judgment. To facilitate this, all of the members of the Audit Committee and the Corporate Governance and Disclosure Policy Committee are unrelated directors.
There are five standing committees of the Board: the Audit and Risk Management Committee; the Compensation Committee; the Corporate Governance and Disclosure Policy Committee; the Pre-Clearance Committee and the Technical Committee. The Board may, from time to time, establish ad hoc committees to address special business issues.
The Audit and Risk Management Committee presently consists of three directors: Anna Biolik, Ken MacDonald (Committee Chair) and Layton Croft, all of whom are independent of management. The Audit and Risk Management Committee is responsible for monitoring the company’s accounting and financial reporting processes and the systems in place to manage the principal operational risks faced by Erdene, including internal control and management of information systems. This committee is responsible for overseeing the Corporation’s processes for identifying and managing financial, technical and businesses risks.
The Audit and Risk Management Committee is also responsible for reviewing and approving the interim consolidated financial statements and for reviewing and recommending the annual consolidated financial statements to the Board of Directors for approval, and renewing and appraising the audit efforts of the Corporation’s external auditor. All of the members of the Audit and Risk Management Committee are expected to have the ability to read and understand a balance sheet, an income statement and a cash flow statement. At least one member is required to have the ability to analyze and interpret a full set of financial statements, including the notes attached thereto in accordance with International Financial Reporting Standards. The Audit and Risk Management Committee meets a minimum of four times per year.
View the Company’s Audit and Risk Management Committee Charter here.
The Compensation Committee presently consists of two directors: Ken MacDonald (Committee Chair) and Cameron McRae. The mandate of the Compensation Committee is to review the performance, compensation and succession planning of the executive officers of Erdene and to ensure the proper administration of the company’s Incentive Stock Option and Deferred Stock Unit Plans. This committee is also responsible for reviewing and recommending all executive benefits plans and executive prerequisites for approval by the Board of Directors. The Compensation Committee meets twice a year.
View the Company’s Compensation Committee Charter here.
The Corporate Governance and Disclosure Policy Committee presently consists of two directors: Anna Biolik (Committee Chair) and Layton Croft. This committee oversees the development and maintenance of the corporate governance practices of the Corporation and guides all regulatory disclosure requirements and the company’s disclosure practices, including its Insider Trading Policy. This committee is responsible for ensuring that appropriate systems, processes and controls for disclosure are in place and to review all news releases and core disclosure documents before their release or filing.
The responsibility for proposing new nominees to the Board and for assessing directors on an ongoing basis is assumed by the full Board of Directors, and every director is entitled to bring the matter to the Board. While it is open to any director to propose new nominees to the Board for consideration, the Corporate Governance and Disclosure Policy Committee reviews the qualifications of candidates for Board membership and the slate of candidates for directors to be nominated for election by Shareholders at annual general meetings of Shareholders. The Corporate Governance and Disclosure Policy Committee meets a minimum of four times a year.
View the Company’s Corporate Governance and Disclosure Policy Committee Charter here.
The Corporation, supported by the Company’s Corporate Governance and Disclosure Policy Committee, believes that decisions regarding the nomination of Directors and the appointment of Executive Officers should be based on merit and remains committed to selecting the best persons to fulfill these roles. At the same time, the Corporation recognizes that diversity among its Directors and Executive Officers will support balanced debate which, in turn, will enhance decision making.
The Corporation recognizes “diversity” as any dimension that can be used to differentiate groups and people from one another including gender, ethnicity, disability and geographical backgrounds. The Corporation recognizes and acknowledges the important role that people from these diverse groups but with appropriate and relevant skills and experience, play in contributing to the Corporation’s stewardship and management.
View the Company’s Diversity Policy here.
The Pre-Clearance Committee presently consists of Peter Akerley, President and CEO (Committee Chair) and Robert Jenkins, Chief Financial Officer. This committee is responsible for pre-clearing trades in the company’s securities by the officers and directors of Erdene, and members of their families who reside with them, in accordance with the company’s Pre-Clearance Policy.
View the Pre-Clearance Policy here.
The Technical Committee presently consists of two directors: Peter Akerley (Committee Chair) and Cameron McRae, who individually have extensive experience in mining and mineral exploration. This committee assists management in reviewing technical matters relating to exploration, development, permitting, resources and reserves on mineral properties, as well as other technical and operational aspects of mining activities before they are submitted to the Board of Directors.
View the Company’s Technical Committee Charter here.
The Special Committee consists of Layton Croft and Ken MacDonald.
The Company and all its subsidiaries are committed to maintaining a high standard of legal and ethical business conduct.
View the full Code of Ethics and Business Conduct Policy here.
The Board and Management of Erdene are committed to open, full and fair communications with investors, which is reflected in its formal, written Disclosure Policy. The objective of the Disclosure Policy is to ensure that communications to the investing public about the company are accurate, timely, relevant and meets all regulatory requirements.
View the Company’s Disclosure Policy here.
Erdene has also adopted a social media policy, designed to guide the Corporation’s employees, officers and directors in creating, posting or otherwise contributing to blogs, social networks or other social media either through the Corporation’s social media accounts or on behalf of the Corporation, as well as personal use of social media.
View the Company’s Social Media Policy here.
The Company has adopted a stand-alone Whistleblower Policy, overseen by the Audit and Risk Management Committee and in coordination with the Corporate Governance and Disclosure Policy Committee. The Whistleblower Policy is designed to ensure all employees and other stakeholders, including external service providers will be made to feel comfortable and safe in anonymously reporting any improprieties, regardless of the level at which they may be committed.
Whistleblowers may submit a confidential report to [email protected] or via mail, to the attention of the Chair of the Audit and Risk Management Committee, to the following address:
170 Cromarty Drive, Suite 200
Dartmouth, Nova Scotia
Canada, B3B 0G1View the full Whistleblower Policy here
Without convening a special meeting for this purpose, the Board shall periodically perform an assessment exercise addressing its effectiveness, with input from Management. Board remuneration is to be divulged in all Proxy Solicitation Circulars sent to Shareholders prior to meetings.
The Corporation has adopted a majority voting policy that requires that any nominee for director who receives a greater number of votes “withheld” than “for” his or her election shall promptly tender their resignation to the chair of the Board of Directors following the meeting. The Policy applies only to uncontested elections, meaning elections where the number of nominees for director is equal to the number of directors to be elected. If a director does not tender their resignation in accordance with the Policy, the Board shall not re-nominate that director at the next election.
View the Majority Voting Policy here.
The Corporation has adopted an advanced notice policy to provide all shareholders with adequate time to consider and respond in an informed way to all proposed director nominations.
View the full Advanced Notice Policy here.
The corporate governance practices described above are subject to changes as Erdene evolves. The Board shall remain sensitive to corporate governance issues. It shall continuously seek to set up the necessary measures, control mechanisms, and structures to ensure effective discharge of its responsibilities without creating additional overhead costs and reducing the return on Shareholders’ equity.