Director - Role and Responsibilities
Mission Statement: To be an innovative provider of insurance products and
services that enhance the viability and competitive position of the legal profession.
The Directors, acting as a Board, bear responsibility for the stewardship of the corporation. To discharge that responsibility the Board supervises the management of the business and the affairs of the corporation including the oversight or monitoring of all significant aspects of the operation. Every Director has the duty of guiding the corporation's affairs in such a manner as to achieve the corporation's objectives and is expected to exercise the degree of care, diligence, and skill that a reasonably prudent person would exercise in comparable circumstances. The Board takes responsibility for:
- Corporate performance: ensuring that corporate management is continuously and
effectively striving for above-average performance, taking account of risk
- Appointment of CEO and human resource issues: appointing and rewarding (or removing) CEO on the basis of performance and approving key appointments reporting to CEO. Review key executive performance and approve compensation policy and succession plans.
- Strategic direction and policy: reviewing and approving management's proposed strategy, approving major decisions (including the launch of new product lines) and, where appropriate, making recommendations to the shareholder, ensuring that policies on key issues are in place and are appropriate and reviewing compliance.
- Budgeting and planning: approving budgets and other performance goals, reviewing performance against goals and taking corrective actions.
- Risk management: monitoring all categories of risk affecting the corporation's operations, approving risk-management strategies, and assessing risk management performance.
- Regulatory compliance and financial monitoring: through an independent audit committee, requiring and monitoring regulatory compliance, appointing auditors, overseeing audit process and reviewing and approving financial reports. Ensure that financial systems will produce accurate and timely information and have appropriate controls.
- Ensuring its own effectiveness: establishing committee structures to assist effective operations of Board, regularly reviewing and assessing its own performance, and monitoring the effectiveness of the corporation's Corporate Governance Framework and governance systems and policies.
- Setting an appropriate cultural tone: through its support for the corporation's vision, mission and values and corporate social responsibility statement and its adherence to the Code of Business Conduct, promoting a culture of integrity, exemplary business conduct, and due regard for the fair treatment of customers while acting in a commercially reasonable manner.
Every Director has a duty to make an objective and constructive contribution towards the effective direction of the corporation's affairs. Director's functions include the following:
- maintaining an objective interest in the agenda and topics placed before the Board;
- ensuring that the Board receives comment, advice or criticism from the corporation's auditors, actuaries or other specialists whose role it is, specifically, to advise the Board;
- making a unique contribution, by way of expertise, judgement or particular contacts which would not otherwise be available to the Board;
- assisting the Chair in the selection, assessment and remuneration of the Directors and senior management;
- acting in an advisory role for specific projects within the corporation, if the director's experience is applicable, and to become involved as a member of appropriate board committees, by invitation; and
- questioning information presented to the Board where this is incomplete or departs from the expected, and ensuring that the rationale for decision-making is justified.
Qualities that a Director should possess to discharge the duties outlined above include:
- Business and Board experience: The Director will have a breadth of business experience and outlook, often at a board level, in successful organizations, including experience with governance issues;
- Mental capacity for long-term thinking and planning, and an ability to analyze a situation fairly quickly;
- Financial comfort: The Director will have financial sense, and a working familiarity with corporate financial statements, accounts and reporting systems;
- Ability to communicate in a clear and productive manner which moves forward the understanding and resolution of an issue;
- Non-conflicting involvements: The important attribute is the ability to allocate sufficient time so as to discharge, responsibly and diligently, the obligations of the appointment;
- Compatible philosophy: A Director must have a business philosophy which is in keeping with the operation of a regulated insurance corporation with complex financial and operational goals;
- Demonstrated competence in an appropriate functional background: A particular functional background may be useful, but not if it unbalances the Board. A continuing involvement with business helps to keep one in touch with current realities. Competence will be assessed based on level of expertise, professional qualifications and knowledge of, or relevant experience in, the subject functional area. Directors are selected for their knowledge, skills and experience in at least some of the following:
- Insurance industry
- Finance and accounting
- Regulatory framework
- Personnel management
- Strategic planning, and
- Marketing/communication/network of contacts;
- Independence: Independence, both financial and intellectual, is essential so that views can be expressed without constraint;
- Honesty and integrity demonstrated through the Director's actions, including the conduct of the Director's
personal and professional responsibilities. A Director should not have (i) a criminal record or a history
of inappropriate conduct involving inter alia dishonesty, misappropriation or fraud, (ii) any
irregular or reproachable conduct regarding their own personal financial situation or that of any entity by
whom they were previously employed or retained in a leadership role,1 or (iii) been declared by a relevant
regulatory authority to be in breach of compliance or to lack integrity in a comparable role.
Every Director must:
- comply promptly with all requests for information (personal or otherwise) necessary to fulfill management operational needs and corporate regulatory obligations, including attending to provide fingerprint samples and consenting to criminal record and credit checks;
- comply with the conflict of interest policy for directors, including (where applicable) removing oneself, and then abstaining, from engagements opposing the interests of LAWPRO or other lawyer professional liability or title insurance programs, whether as counsel or expert witness;
- attend orientation training for new directors and such on-going training arranged or approved by the Chair from time to time;
- participate in evaluations or other programs to assess Director qualifications and competencies and/or Board effectiveness, as directed by the Chair.
It is expected that within a reasonable time the Director will have acquired:
- a sound knowledge of the nature and extent of the LAWPRO business and more generally, the insurance industry;
- an awareness of the economic, political and social environment in which the business is conducted;
- an understanding of the availability of financial resources and the level of current and proposed investments; and
- an introduction, through the CEO, to senior persons responsible for the corporation's operational management.
On-going Monitoring of Qualifications
If at the time of joining the Board, or thereafter due to a change in circumstances, a Director believes he or she may not have the qualifications stated herein, the Director shall notify the Chair of the Board (or the Vice Chair in the absence of the Chair).
Where such a report is received or for any other reason the Chair believes a Director does not meet the qualifications stated herein, the Chair will consult with the subject Director, and following additional consultation with the Vice Chair of the Board and Chair of Governance Committee, make a report to Governance Committee if the Chair of the Board believes a change in Board composition is appropriate. Governance Committee may make any recommendation to the Board it deems appropriate. In urgent circumstances, the issue may be taken by the Chair directly to the Executive Committee of the Board.
Where appropriate, depending on the circumstances, the Chair will also consider, and give instructions regarding, any necessary external reporting to regulatory or other authorities.2
Any duties of the Chair contained in this paragraph will be fulfilled by the Vice Chair if the Chair is unavailable or is in a conflict.
Reviewed by Governance Committee: May 31, 2017
Adopted by Board: June 28, 2017
1 Indicators of inappropriate financial dealings include, inter alia, being the target
of significant collection proceedings, personal bankruptcy, or bankruptcy/insolvency of a business entity
where the Director had a leadership role.
2 For example, the Quebec regulator requires notice of any material issue signifying a lack of integrity.