Statement of Corporate Governance Practices
In accordance with disclosure requirements, the Board of Directors of Lions Gate Metals Inc. (the "Company") has adopted the following corporate governance practices:
The goal of the Company is to create shareholder value through the development of its properties in North America.
The Board of Directors has responsibility for the stewardship of the Company, specifically to oversee the operation of the Company and supervise management.
The Board acts in accordance with the British Columbia Business Corporations Act, the Company's Articles of Incorporation and By-laws, the policies of the TSX Venture Exchange (TSX-V), and securities rules in the Province of British Columbia.
Every Board director is part of the process of establishing policies for the Company and its subsidiaries.
(a) The Strategic Planning Process. The Board participates in strategic planning by considering and, if deemed appropriate, adopting plans proposed and developed by management, with management having the primary responsibility for developing a strategic plan.
(b) Principal Risks. The Board considers the risks inherent in the mining industry and receives periodic assessments from management as to these risks and the Company's strategies to manage these risks.
(c) Succession Planning. The Board reviews the personnel needs of the Company from time to time, having particular regard to succession issues relating to senior management. The training and development of personnel is generally left to management. The Board appoints the President, Chief Executive Officer and Chairman, as well as the Audit Committee members and officers each year at its first meeting of Directors immediately following the Annual General Meeting.
(d) Communications Policy. The Board assesses from time to time how effectively the Company communicates with shareholders, and has a Corporate Disclosure Policy. The Company meets or exceeds all requirements to disseminate material information in a timely manner based on the TSX-V policies. The Company meets with brokers and portfolio managers and attends investment conferences in Canada and overseas. The Company has a website with detailed information on its properties and corporate structure and offers parties an electronic means of communicating with the Company.
(e) Integrity of Internal Control. The Board, through the Audit Committee and in conjunction with its auditors, assesses the adequacy of the Company's internal control systems. This process is undertaken on an annual basis during preparation of the year end financial audit. The Audit Committee also reviews and assesses the financial statements on a quarterly basis and reviews annually the Corporate Disclosure and Insider Trading Policy.
The Board of Directors presently consists of six (6) directors. Gordon Keevil, John Tapics, and Richard Schroeder are considered to be outside, unrelated and independent directors. These directors do not have any direct or indirect material relationship with the Company (other than shareholdings) which could, in the view of the Company's Board, reasonably interfere with the exercise of a director's independent judgment.
The remaining directors include Arni Johannson, Michael Sweatman, and John Icke. Mr. Johannson and Mr. Sweatman are both considered to be inside and related as they are members of management, while John Icke is considered related by virtue of his position as CEO of a company with significant shareholdings of the Company.
The Board currently consists of three unrelated and outside directors: Gordon Keevil, John Tapics, and Richard Schroeder.
Mr. Keevil became a director in May 2011 and has over 25 years of technical and corporate experience related to the management and operation of resource companies. Gordon focused his professional efforts towards junior listed companies involved in mineral exploration and development where he was responsible for all aspects of corporate, financial and operational management.
Mr. Tapics became a director in April 2011 and has over 30 years of mining and electricity industry experience including four years as President and CEO of the Alberta Electric System Operator responsible for operating Alberta's electricity market, transmission planning and system operations as well as eleven years as an Officer of TransAlta Corporation, in charge of the Generation, and the Transmission and Distribution Business units.
Mr. Schroeder became a director in July 2011 and is considered a financial expert. Prior to joining Lions Gate, Mr. Schroeder, CA, was a partner of Ernst & Young LLP since 2005.
The Board is satisfied that, in view of the size and composition of the Board, no formal procedures are required to assess the performance of the Board, its committees or individual directors.
Orientation and education of new members of the Board is conducted informally by management and members of the Board. The orientation provides background information on the Company's history, performance and strategic plan.
The Board has considered its size with a view to the impact of size upon its effectiveness and has concluded that the number of directors as presently constituted is appropriate for the Company given the complexity and current stage of development of the Company's business. The Board as presently constituted includes considerable experience as well as financial experience.
The Audit Committee provides independent review and oversight of the Company's financial reporting process, the system of internal control and management of financial risks, and the audit process, including the selection, recommendation, oversight and compensation of the Company's external auditors. Meetings of the audit committee are held at least on a quarterly basis. Special meetings may be convened by any member of the committee, by either the CFO or CEO of the Company, or by the external auditors, as required.
The Audit Committee is comprised of three unrelated and outside independent directors: Gordon Keevil, John Tapics, and Richard Schroeder, Audit Committee Chair.
The Board of Directors has assumed the responsibility for developing the Company's approach to governance issues and responding to governance guidelines.
The Company has not formally developed position descriptions for the Board and the Chief Executive Officer; however, the Board is satisfied that senior management is fully aware of their responsibilities and those matters that are within their mandate.
The Board has functioned, and is of the view that it can continue to function, independently of management, as required. Mr. Arni Johannson, Chairman, and Mr. Michael Sweatman, CFO, are members of management as well as directors of the Company. In view of the size of the Company, management representation on the Board, and the nature of its business, it is essential that those having an intimate knowledge of the Company's operations be present during important Board discussions. Notwithstanding the foregoing, if the Board believed it was appropriate and meaningful, it would formalize a process whereby the Board could meet without management present at the meeting.
The Board has adopted a Code of Business Conduct and Ethics. A copy of the Code and Policy can be found on the Company website at www.LionsGateMetals.com
The Board appoints a Compliance Officer who is responsible for investigating and resolving all reported complaints and allegations concerning violations of the Code of Business Conduct. The Compliance Officer has direct access to the Audit Committee and the Board and the Compliance Officer is required to report to the Board at least annually on compliance activity.
Stewardship of the Company
The goal of the Company is to create shareholder value through the development of its properties in North America.
The Board of Directors has responsibility for the stewardship of the Company, specifically to oversee the operation of the Company and supervise management.
The Board acts in accordance with the British Columbia Business Corporations Act, the Company's Articles of Incorporation and By-laws, the policies of the TSX Venture Exchange (TSX-V), and securities rules in the Province of British Columbia.
Every Board director is part of the process of establishing policies for the Company and its subsidiaries.
(a) The Strategic Planning Process. The Board participates in strategic planning by considering and, if deemed appropriate, adopting plans proposed and developed by management, with management having the primary responsibility for developing a strategic plan.
(b) Principal Risks. The Board considers the risks inherent in the mining industry and receives periodic assessments from management as to these risks and the Company's strategies to manage these risks.
(c) Succession Planning. The Board reviews the personnel needs of the Company from time to time, having particular regard to succession issues relating to senior management. The training and development of personnel is generally left to management. The Board appoints the President, Chief Executive Officer and Chairman, as well as the Audit Committee members and officers each year at its first meeting of Directors immediately following the Annual General Meeting.
(d) Communications Policy. The Board assesses from time to time how effectively the Company communicates with shareholders, and has a Corporate Disclosure Policy. The Company meets or exceeds all requirements to disseminate material information in a timely manner based on the TSX-V policies. The Company meets with brokers and portfolio managers and attends investment conferences in Canada and overseas. The Company has a website with detailed information on its properties and corporate structure and offers parties an electronic means of communicating with the Company.
(e) Integrity of Internal Control. The Board, through the Audit Committee and in conjunction with its auditors, assesses the adequacy of the Company's internal control systems. This process is undertaken on an annual basis during preparation of the year end financial audit. The Audit Committee also reviews and assesses the financial statements on a quarterly basis and reviews annually the Corporate Disclosure and Insider Trading Policy.
Board Independence
The Board of Directors presently consists of six (6) directors. Gordon Keevil, John Tapics, and Richard Schroeder are considered to be outside, unrelated and independent directors. These directors do not have any direct or indirect material relationship with the Company (other than shareholdings) which could, in the view of the Company's Board, reasonably interfere with the exercise of a director's independent judgment.
The remaining directors include Arni Johannson, Michael Sweatman, and John Icke. Mr. Johannson and Mr. Sweatman are both considered to be inside and related as they are members of management, while John Icke is considered related by virtue of his position as CEO of a company with significant shareholdings of the Company.
Individual Unrelated Directors
The Board currently consists of three unrelated and outside directors: Gordon Keevil, John Tapics, and Richard Schroeder.
Mr. Keevil became a director in May 2011 and has over 25 years of technical and corporate experience related to the management and operation of resource companies. Gordon focused his professional efforts towards junior listed companies involved in mineral exploration and development where he was responsible for all aspects of corporate, financial and operational management.
Mr. Tapics became a director in April 2011 and has over 30 years of mining and electricity industry experience including four years as President and CEO of the Alberta Electric System Operator responsible for operating Alberta's electricity market, transmission planning and system operations as well as eleven years as an Officer of TransAlta Corporation, in charge of the Generation, and the Transmission and Distribution Business units.
Mr. Schroeder became a director in July 2011 and is considered a financial expert. Prior to joining Lions Gate, Mr. Schroeder, CA, was a partner of Ernst & Young LLP since 2005.
Assessing the Board's Effectiveness
The Board is satisfied that, in view of the size and composition of the Board, no formal procedures are required to assess the performance of the Board, its committees or individual directors.
Orientation and Education of Directors
Orientation and education of new members of the Board is conducted informally by management and members of the Board. The orientation provides background information on the Company's history, performance and strategic plan.
Effective Board Size
The Board has considered its size with a view to the impact of size upon its effectiveness and has concluded that the number of directors as presently constituted is appropriate for the Company given the complexity and current stage of development of the Company's business. The Board as presently constituted includes considerable experience as well as financial experience.
The Audit Committee
The Audit Committee provides independent review and oversight of the Company's financial reporting process, the system of internal control and management of financial risks, and the audit process, including the selection, recommendation, oversight and compensation of the Company's external auditors. Meetings of the audit committee are held at least on a quarterly basis. Special meetings may be convened by any member of the committee, by either the CFO or CEO of the Company, or by the external auditors, as required.
The Audit Committee is comprised of three unrelated and outside independent directors: Gordon Keevil, John Tapics, and Richard Schroeder, Audit Committee Chair.
Approach to Corporate Governance
The Board of Directors has assumed the responsibility for developing the Company's approach to governance issues and responding to governance guidelines.
Position Descriptions
The Company has not formally developed position descriptions for the Board and the Chief Executive Officer; however, the Board is satisfied that senior management is fully aware of their responsibilities and those matters that are within their mandate.
Board Independence
The Board has functioned, and is of the view that it can continue to function, independently of management, as required. Mr. Arni Johannson, Chairman, and Mr. Michael Sweatman, CFO, are members of management as well as directors of the Company. In view of the size of the Company, management representation on the Board, and the nature of its business, it is essential that those having an intimate knowledge of the Company's operations be present during important Board discussions. Notwithstanding the foregoing, if the Board believed it was appropriate and meaningful, it would formalize a process whereby the Board could meet without management present at the meeting.
Ethical Business Conduct
The Board has adopted a Code of Business Conduct and Ethics. A copy of the Code and Policy can be found on the Company website at www.LionsGateMetals.com
The Board appoints a Compliance Officer who is responsible for investigating and resolving all reported complaints and allegations concerning violations of the Code of Business Conduct. The Compliance Officer has direct access to the Audit Committee and the Board and the Compliance Officer is required to report to the Board at least annually on compliance activity.