Good Governance Guides

Good Governance Guide: No 1.5

Category: Structure
Subject: Roles, Responsibilities & Function of the Chair, CEO and CFO
Source: Chartered Secretaries Canada

The Chair
The Chair of the Board is accountable to the Board of Directors for the fulfillment of the responsibilities of the office of Chair as outlined in the Corporation’s by-laws and will lead the Board in establishing effective corporate governance processes and practices.

The role and responsibilities of the Chair of the Board will include:

• To assume principal responsibility for the operation and functioning of the Board of Directors (To provide overall leadership to the Board without limiting the principle of collective responsibility and the ability of the Board to function as a unit. )
• Fulfilling his or her Board leadership responsibilities in a manner that will ensure that the Board is able to function independently of management. This should include ensuring that the appropriate procedures are in place for the Board to meet regularly without management present, and to allow for Directors to engage outside advisors at the expense of the Company in appropriate circumstances, subject to the approval of the Governance Committee
• Consulting with the Board and the Corporate Secretary to set board agendas that are based on the responsibilities of the Board and reflect current priorities
• Chairing Board meetings effectively, including ensuring that appropriate briefing materials are delivered in a timely fashion, encouraging full participation and discussion by individual Directors, stimulating debate, facilitating consensus, and ensuring that clarity regarding decisions is reached and duly recorded
• Ensuring compliance with the governance policies of the Board regarding conduct of board meetings, managing and reporting information and other policies related to the conduct of the Board’s business
• Taking a leadership role in ensuring effective communication and relationships between the Corporation, shareholders, stakeholders and the general public

The Chief Executive Officer (CEO)
The Chief Executive Officer is accountable to the Board of Directors of Company “X” or Association “Y” for the achievement of corporate objectives within specified executive limitations.

Responsibilities of the Chief Executive Officer will include:

• The development and recommendation of corporate strategies, and business and financial plans for the approval of the Board of Directors.
• Managing the operations of the business in accordance with the strategic direction set by the Board and within operational policies as determined by the Board in relation to the conduct of the business
• Reporting management information back to the Board in a manner and time so that the Board may effectively monitor and evaluate corporate performance against stated objectives and within executive limitations, including:
  • Submitting monitoring and performance information required by the Board in a timely and accurate fashion, and based on industry benchmarked standards;
  • Ensuring that the Board is aware of relevant trends, anticipated adverse media and analyst coverage, material external or internal changes, and any changes in the assumptions upon which any board decision or approval has previously been made;
  • Advising the Board if, in the Chief Executive Officer’s opinion, the Board is not in compliance with its own policies, or legal and/or regulatory requirements, in particular, in the case of behaviour of one or more Directors which is detrimental to best interests of the Corporation or to the working relationship between the Board and the Chief Executive Officer;
  • Developing a list of risk factors and informing the Board of what mechanisms are in place to address the identified risks;
  • Providing the Board with information, both internal and external, that the Board may require in order to make fully-informed decisions regarding the operation of the business;
  • Dealing with the Board as a whole except when: (a) fulfilling individual requests for information; or (b) responding to officers or committees duly charged by the Board; and
  • Reporting in a timely manner an actual or anticipated non-compliance with any Board approved policy or decision.

The Chief Financial Officer (CFO)
The Chief Financial Officer of the Company will have an indirect accountability relationship to the Board of Directors and will be responsible for the timeliness and integrity of the financial reporting and information presented to the Board.

The Chief Financial Officer will also be responsible for acting as the chief advisor to the Audit Committee of the Board of Directors.