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Corporate Governance The Fund’s corporate governance has been reviewed by Trustees and further strengthened. Actions included:
The Fund’s Trustees are accountable to Unitholders and committed to strong, effective and responsible corporate governance practices. TerraVest’s Trustees have put into place governance policies that are in line with today’s best practices for Canadian publicly owned income trusts. The Trustees are responsible for overseeing the business of the Fund by providing effective stewardship of its assets. In establishing a framework for governance, the Board of Trustees seeks to ensure that the Fund, its administrator and its portfolio companies, along with all employees, conduct business with honesty and integrity. During its review, Trustees focused on recent developments in corporate governance and guidelines established by various authorities, including National Policy 58-201 (Corporate Governance Guidelines) and National Policy 58-101 (Disclosure of Corporate Governance Practices), and National Policy 52-109 (Certification of Disclosure in Issuers Annual and Interim Filings). Through its governance practices, the Trustees have put in place practical mechanisms to protect assets and ensure the best interests of Unitholders are always served. In its deliberations, Trustees are always guided by the need to sustain the value of assets over the long term and to guide TerraVest’s management teams to deliver profitable growth. An important feature of TerraVest governance is the oversight role played by independent Trustees and independent Directors, who form a majority of the Board and the two committees – the Audit Committee and the Corporate Governance and Nominating Committee. Independent Trustees of the Fund and the Board of the Administrator maintain an appropriate degree of independence from management and play a deciding role in key aspects of the Fund’s governance, including establishing distributions to Unitholders. The Trustees seek to establish Unitholder distributions at sustainable levels that ensure sufficient funds are available to maintain assets and conservative debt levels. For acquisitions, the Fund’s practice is to obtain, where practicable, contractual arrangements that provide TerraVest with priority access to distributions made by portfolio companies ahead of minority investors. Trustees have attempted to create a balance between the entrepreneurial initiative and management flexibility required to operate efficiently and effectively with the controls necessary for good governance. Further details of the Fund’s governance policies and practices can be obtained in the 2006 Management Information Circular available here. |
