1. Purpose
The members of the Board of Directors (the “Board”) of MI Developments Inc. (the “Company”) have the duty to supervise the management of the business and affairs of the Company. The Board, directly and through its committees and the chair of the Board (the “Chair”), shall provide direction to senior management, generally through the Chief Executive Officer, to pursue the best interests of the Company.
2. Composition
2.1 General
The composition and organization of the Board, including the number, qualifications and remuneration of directors; the number of Board meetings; Canadian residency requirements; quorum requirements; meeting procedures; and notices of meetings are governed by applicable laws, rules and regulations and the Articles and By-laws of the Company.
Each director must have an understanding of the Company’s principal operational and financial objectives, plans and strategies, and financial position and performance. Directors must have sufficient time to carry out their duties and not assume responsibilities that would materially interfere with, or be incompatible with, Board membership. Directors who experience a significant change in their personal circumstances, including a change in their principal occupation, are expected to promptly advise the chair of the Corporate Governance and Nominating Committee.
2.2 Independence
A majority of the Board must be independent within the meaning of the provisions of National Policy 58-201 – Corporate Governance Guidelines of the Canadian Securities Administrators and the applicable rules and regulations of the United States Securities and Exchange Commission and the New York Stock Exchange, each as may be amended from time to time.
2.3 Chair of the Board
The Chair of the Board shall be an independent director.
3. Duties and Responsibilities
The Board shall have the specific duties and responsibilities outlined below.
3.1 Strategic Planning
(a) Strategic Plans
The Board will adopt a strategic plan for the Company. At least annually, the Board shall review and, if advisable, approve the Company’s strategic planning process and the Company’s annual strategic plan. In discharging this responsibility, the Board shall review the plan in light of management’s assessment of emerging trends, the competitive environment, the opportunities and risks of the business, and business practices in the industry.
(b) Business and Capital Plans
At least annually, the Board shall review and, if advisable, approve the Company’s annual business and capital plans as well as policies and processes generated by management relating to the authorization of major investments and significant allocation of capital.
3.2 Risk Management
(a) General
The Board shall periodically review reports provided by management of principal risks associated with the Company’s business and operations, review the implementation by management of appropriate systems to manage these risks and review reports by management relating to the operation of, and any material deficiencies in, these systems.
(b) Verification of Controls
The Board shall verify that internal, financial, non-financial and business control and management information systems have been established by management.
3.3 Human Resource Management
(a) General
At least annually, the Board shall review a report of the Compensation Committee concerning the Company’s approach to executive compensation.
(b) Succession Review
The Board shall develop and review periodically the succession plans of the Company for the Chair, the Chief Executive Officer and other executive officers, including the appointment, training and monitoring of such persons.
(c) Integrity of Senior Management
The Board shall, to the extent feasible, satisfy itself as to the integrity of the Chief Executive Officer and other executive officers of the Company and that the Chief Executive Officer and other senior officers strive to create a culture of integrity throughout the Company.
3.4 Corporate Governance
(a) General
The Board shall periodically review reports of the Corporate Governance and Nominating Committee concerning the Company’s approach to corporate governance.
(b) Director Independence
The Board shall periodically review reports of the Corporate Governance and Nominating Committee that evaluate the director independence standards established by the Board (including the definition of independence and the proportion of independent directors) and the Board’s ability to act independently from management in fulfilling its duties.
(c) Ethics Reporting
The Board has adopted a written Code of Conduct and Ethics (the “Code”) applicable to directors, officers and employees of the Company. The Board shall periodically review reports of the Audit Committee relating to compliance with, or material deficiencies from, the Code and approve changes it considers appropriate. The Board shall review reports from the Audit Committee concerning investigations and any resolutions of complaints received under the Code.
(d) Board of Directors Charter Review
At least annually, the Board shall review and assess the adequacy of its Charter to ensure compliance with any rules and regulations promulgated by any regulatory body and approve any modifications to this Charter as considered advisable.
3.5 Communications
(a) General
The Board has adopted a Disclosure Policy for the Company. The Board, in conjunction with the Chief Executive Officer and General Counsel, shall periodically review the Company’s overall Disclosure Policy, including measures for receiving feedback from the Company’s stakeholders, and management’s compliance with such policy. The Board shall, if advisable, approve material changes to the Company’s Disclosure Policy.
(b) Shareholders
The Company endeavors to keep its shareholders informed of its progress through an annual report, annual information form, quarterly interim reports and periodic press releases. In addition, the Company shall maintain on its website a contact email address that will permit shareholders to provide feedback directly to the Chair of the Board.
4. Committees of the Board
The Board has established the following committees: the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee. Subject to applicable law, the Board may establish other Board committees or merge or dissolve any Board committee at any time.
4.1 Committee Charters
The Board has approved charters for each established Board committee and shall approve charters for any Board committee created in the future.
4.2 Delegation to Committees
The Board has delegated to the applicable committee those duties and responsibilities set out in each Board committee’s charter.
4.3 Committee Composition
The Board shall appoint, annually or as required, the members and a chair of each committee, after receiving recommendations from the Corporate Governance and Nominating Committee.
5. Meetings and Resources
The Committee may, to the extent permissible by Applicable Requirements, designate a subcommittee to review any matter within this Charter as the Committee deems appropriate.
5.1 Meeting Participation
Each director is encouraged to use his or her best efforts to attend all meetings of the Board and the committees of the Board of which such director is a member. Directors will be expected to have read and considered the materials sent to them in advance of each meeting and to actively participate in the meetings.
5.2 Service on Other Boards
Directors may serve on the boards of other public companies so long as these commitments do not materially interfere and are compatible with their ability to fulfill their duties as a member of the Board. Directors must advise the Chair in writing in advance of accepting an invitation to serve on the board of another public company.
5.3 Access to Management and Outside Advisors
The Board shall have unrestricted access to management and employees of the Company. The Board shall have the authority to retain external legal counsel, consultants or other advisors to assist it in fulfilling its responsibilities and to set and pay the respective reasonable compensation of these advisors. The Company shall provide appropriate funding, as determined by the Board, for the services of these advisors.
6. Meetings and Resources
6.1 Position Descriptions for Directors
The Board has approved position descriptions for the Chair and the chair of each Board committee. At least annually, the Board shall review such position descriptions.
6.2 Position Description for Chief Executive Officer
The Board has approved a position description for the Chief Executive Officer, which includes delineating management’s responsibilities. The Board has also approved the corporate goals and objectives that the Chief Executive Officer has responsibility for meeting. The Board shall periodically review a report of the Compensation Committee reviewing this position description and such corporate goals and objectives.
