Innovotech Directors' Code of Business Conduct and Ethics
The following is an excerpt taken from Schedule B of the Innovotech Management Information Circular dated October 3, 2017.
Schedule B – CORPORATE GOVERNANCE
The Board has adopted the following written mandate:
The Board of Directors has responsibility for the overall stewardship for the Company, establishing the overall policies and standards for the Company in the operation of its business, and reviewing and approving the strategic plans. In addition, the Board monitors and assesses overall performance and progress in meeting the Company's goals. Day to day management is the responsibility of the Chief Executive Officer, President and senior management. To this end, the Board has adopted the following guidelines that identify the personal and professional conduct expected of the Directors and its corporate governance responsibilities.
The Board discharges its responsibilities directly through its committees, the Audit Committee, the Nominating and Corporate Governance Committee, the Compensation Committee, and the Environmental and Safety Committee. In addition to the Board's primary roles of overseeing the affairs of the Corporation, principal duties include, but are not limited to the following categories:
- The majority of the Board and all of its committee members, with the exception of the Environmental and Safety Committee and Corporate Governance Committee will be independent.
- All directors will act in the best interest of the Corporation and will put the interests of the Corporation ahead of any single stakeholder, shareholder or group.
- The Board will supervise management, not manage the business day-to-day.
- The Board has the responsibility for approving the appointment of the Chief Executive Officer and any other officers of the Corporation, and approving the compensation of the Chief Executive Officer and management of the Corporation following a review from the Compensation Committee.
- The Board will be responsible for reviewing, discussing and debating Innovotech's direction, choice of business opportunities and the management of the risk which these opportunities entail.
- The Board will ensure that there are objectives for management and with its committees will regularly review performance against these objectives.
- The Board will ensure there are plans for the orderly succession of management and that these plans are kept up to date.
- The Board will ensure that Innovotech communicates openly and effectively with its shareholders, other stakeholders and the public.
- The Board will approve operating and capital budgets and ensure that Innovotech has effective control and information systems to enable it to monitor progress and discharge all of its responsibilities.
- The Board will appoint and oversee the committees it requires and ensure Innovotech reports on corporate governance in each annual report.
- The Board is responsible for monitoring the performance and training of Management with respect to the operations of the Corporation.
- The Board will assess each year the size, performance, and effectiveness of the Board, its committees and its members and nominate new director candidates as required, based on recommendations from the Nominating and Corporate Governance Committee.
The Board of Directors intends to review its mandate on an annual basis. This review is initiated and conducted by the Nominating and Corporate Governance Committee. The Board assists management as requested regarding specific operational matters and assists management in establishing operational and financial development, goals and objectives. Board approval is required for any major operational or financial initiative. Expectations of management by the Board include standard best efforts and ethical conduct, timely reporting, timely preparation of documents and reports in preparation for meetings, competent fiscal and regulatory management.
Chairman of the Board and Chairman of the individual committees
The Board has developed written position guidelines for the Chairman of the Board but not specifically for the chairs of each Board committee.
Chief Executive Officer
As Chief Executive Officer, Dr. Timourian's employment contract provides the following responsibilities: (a) supervision and implementation of strategies to raise capital; (b) supervision and implementation of a plan to commercialize the Employer's technology, including but not restricted to the commencement, continuation and completion of clinical trials; (c) supervision and implementation of sales and marketing strategies for existing and new products; (d) supervision of development and implementation of communication and public relations strategies; (e) identification, development and implementation of new products, new business development strategies and opportunities; (f) supervision of all planning and budgeting processes and planning; (g) supervision and direction of the Chief Financial Officer and other designated employees in hiring, supervising, and training of all staff and administration of all personnel, including the development of personnel policies and procedures and salary administration; (h) dismissing personnel as required; (i) supervision and direction of production processes and all production labs and facilities; (j) direction and supervision of all financial matters of the Corporation including financial reporting to the Board; (k) providing advice and input to the Board and ensuring that the Corporation's policies, procedures and programs related to its business are compatible with all aspects of effective operations; (l) such other functions as may be necessarily related to the foregoing and such additional duties and functions as Dr. Timourian and the Corporation shall, from time to time, agree upon; and (m) initiating, supervising and managing all scientific and technological endeavours of the Corporation. The Chief Executive Officer reports directly to the Board.
The responsibilities and performance goals of the Chief Executive Officer, in addition to the contractual responsibilities described above, are set annually between the Board and the Chief Executive Officer and reviewed for monitoring purposes at least quarterly by the Compensation Committee and as needed by the Nominating and Corporate Governance Committee. Since a portion of the Chief Executive Officer's annual remuneration is dependent on meeting performance goals and objectives, a detailed analysis of the Chief Executive Officer's performance in meeting these goals and objectives is conducted annually by the Compensation Committee.
Orientation and Continuing Education
New directors will be given an orientation program which includes an information package, initial and subsequent meetings with management and the Chairman of the Board, tours of the Corporation's facilities and a seminar on the Corporation's science and potential products.
Any Director wishing to attend a continuing education course identifies to the Chairman the desire to attend such a course. The Chairman then approves or disapproves the request.
Ethical Business Conduct
The Board has adopted a written Code of Business Conduct and Ethics for the directors, officers and employees of the Corporation. It is posted on the Corporation's website.
The Board is responsible for setting the standards of business conduct contained in the Code of Business Conduct and Ethics and for updating the standards as it deems appropriate to reflect changes in the legal and regulatory framework applicable to the Corporation, the business practices in the Corporation's industry, the Corporation's own business practices, and the prevailing ethical standards of the communities in which the Corporation operates. While the Chief Executive Officer of the Corporation oversees the procedures designed to implement the Code of Business Conduct and Ethics to ensure that they are operating effectively, it is the individual responsibility of each director, officer and employee to comply with the Code of Business Conduct and Ethics. Those who violate the Code of Business Conduct and Ethics will be subject to disciplinary action.
If a conflict arises at a Board meeting, the affected Director declares the conflict and refrains from discussion or voting on the matter in question. Conflict of interest guidelines are observed concerning transactions and agreements in respect of which a director or executive officer has a material interest.
A "whistleblower" policy has been adopted by the Board.
Nomination of Directors
The Board first appointed a Nominating and Corporate Governance Committee in November 2004. It presently is comprised of Mr. Hirsche, Dr. Timourian and Mr. Grobbelaar. Mr. Hirsche is Chairman of the Nominating and Corporate Governance Committee. The members of the Nominating and Corporate Governance Committee are not all independent directors. The Nominating and Corporate Governance Committee adopted a charter in February 2006.
Pursuant to its charter, the Nominating and Corporate Governance Committee takes responsibility for establishing and reviewing the Corporation's system of corporate governance and its response to and compliance with any applicable regulatory guidelines. It is also responsible for preparing disclosure concerning corporate governance, and for developing and monitoring our general approach to corporate governance issues as they arise. Further, it assumes responsibility for assessing current members and nominating new members to the Board and ensuring that all Board members are informed of and are aware of their duties and responsibilities as directors. The Nominating and Corporate Governance Committee takes responsibility for the adoption of adequate policies and procedures to allow the Corporation to meet our continuous disclosure requirements, manage the Corporation's principal risks, review the strategic plan on a timely basis, develop and monitor corporate policies relating to trading in securities, ensuring the Board annually reviews organizational structure and succession planning, reviews areas of potential personal liability of directors and ensures reasonable protective measures are in place and causes the Board to annually review its definition of an independent director. The Nominating and Corporate Governance Committee met as needed for the year ended 2016 and communicated informally from time to time.
The Board expects new directors to abide by the same standards and time commitments described above for all other directors.