Corporate governance at Transat
Transat A.T. Inc. believes that a good corporate governance system is a valuable asset that encourages performance and supports the value of shareholder equity. Transat's Board of Directors and senior executives follow new corporate governance trends, guidelines and regulations very closely.
Proactive and avant-garde corporate governance is a cornerstone for the efficient management of the Corporation and practices must stay abreast of the changing business world and regulatory framework. To keep in step with these changes, Transat has undertaken to review its corporate governance rules regularly, to meet the requirements of regulatory authorities and to reflect any related change. For a more detailed explanation of this topic, please refer to the Management Proxy Circular for January 21, 2008, which contains a description of the Corporation's practices regarding its various legal obligations. The Corporation believes that good corporate governance is an important asset that promotes and enhances performance and protects the value of shareholder equity.
1. A corporate governance manual
In addition to a well-established system of corporate governance practices, the Corporation has given the Corporate Governance and Nominating Committee a mandate to oversee the development of the Corporate Governance Manual (hereinafter the “Manual”), which was adopted by the Board on February 4, 2003. The latest update incorporating new trends and regulations was adopted by the Board on December 13, 2007.
The Board assumes responsibility for all corporate management and is vested with all powers and authority necessary to manage and control the affairs of the Corporation. The role and mandate of the Board is defined in the Manual, which also provides that the Board must:
- supervise and contribute to the Corporation's strategic planning process, while taking into consideration the identification of the opportunities or risks for the Corporation, its mission and its objectives;
- plan for the hiring, compensation and development of directors, as well as planning for their succession;
- evaluate the skills of the President and Chief Executive Officer and of the senior executives of the Corporation;
- act in the best interests of all shareholders and provide an adequate and efficient communications policy;
- where necessary, intervene in management decisions and decide on any issue of importance to the Corporation, based on its judgment in order to protect shareholder equity; and
- ensure compliance with legislation and regulatory standards.
Because the Manual is an evolving document, the Board ensures that it meets with changing regulatory standards. In addition to the Manual, the Corporation, through its Corporate Governance and Nominating Committee, has developed a Code of Ethics that reflects the Corporation's commitment to ethics. The Code of Ethics primarily reflects the importance the Corporation gives to meeting its objective of maintaining proactive corporate governance practices.
The Corporate Governance and Nominating Committee closely monitors evolving corporate governance guidelines and best practices. Each year, it also reviews the overall performance of the Board of Directors.
The Committee regularly reviews its corporate governance practices in light of developing requirements and practices in this area. As new provisions come into effect, the Committee reassesses the Corporation’s practices and, where necessary, recommends changes in accordance with the requirements of National Instrument 58-101 Disclosure of Corporate Governance Practices adopted by the Canadian Securities Administrators (CSA).
2. Committees of the Board
The Board of Directors works in conjunction with the Executive Committee, the Audit Committee, the Human Resources and Compensation Committee and the Corporate Governance and Nominating Committee. The Board and each of its Committees have charters, which are renewed annually; they state their respective mandates and define the roles and responsibilities of members, including each Chair.
3. National instruments of the Canadian Securities Administrators and obligations in respect of the monitoring of financial markets in Canada
The Corporation ensures that it closely follows new governance trends and new rules regarding corporate governance and securities.
In January 2004, the CSA issued its rules on corporate governance, internal controls and audit committees. These rules propose the best corporate governance practices that reflect recent legislative and regulatory developments in this area. Moreover, the rules on continuous disclosure have been reinforced; the Corporation ensures that it complies with the rules and monitors all modifications in this area. The Corporation takes all necessary measures to comply with them.
The adoption and publication of the Code of Ethics is one example of the Corporation's rules of practice regarding rules in force.
4. Audit committee rules
The new CSA audit committee rules set forth requirements regarding the composition, independence standards and responsibilities of audit committees, as well as information disclosure obligations with respect to matters related to audits and the continuous-disclosure requirement.
The Corporation continues to take all necessary measures to comply with the CSA rules and to remain in the vanguard of on governance trends.