Governance of the Fonds de solidarité FTQ: an independent President of the Board of Directors and a majority of directors elected by shareholders

MONTREAL, Feb. 6, 2014 /CNW Telbec/ - The Fonds de solidarité FTQ announces that its Board of Directors has approved the recommendations of its Special Governance Committee created this past November following the presence of the Fonds before a parliamentary commission. The special committee, formed namely with a majority of independent members of the Board, namely consulted two experts on governance, Mr. Robert Parizeau and Mr. Yvon Allaire, respectively Co-Chairman of the Board of Directors of the Institute of Corporate Directors and President of the Institute for the Governance of Private and Public Institutions.

"While preserving the DNA of the Fonds which was born of and nourished by its union roots, the Fonds has taken a major step towards the adoption of best practices which will give the Fonds' shareholders more power," declared Mr. Daniel Boyer, Interim President of the Fonds' Board and FTQ President. "More than half of the Fonds' shareholders saving for retirement were recruited by workplace local representatives of the Fonds, all from union ranks in every corner of Québec."

The committee's key recommendations are the following:
	1.	Presidency of the Board of Directors AND all the Board's committees (including those authorizing Fonds régionaux and Fonds immobilier investments) reserved for a member independent of both the Fonds and the FTQ^1.
	2.	Reconfiguration of the Board of Directors in order (i) to reduce from 10 to 7 the number of directors nominated by the FTQ, (ii) to increase from 4 to 7 the number of directors independent of the Fonds and the FTQ^1, who from now on will be proposed for annual election to shareholders by a committee composed of a majority of independent individuals and (iii) to increase from 2 to 4 the number of directors coming from a public call for nominations and elected annually by the shareholders. In this way, the FTQ will no longer nominate the majority of members to the Board of Directors.

Composition of the Board of Directors of the Fonds de solidarité FTQ
	Before the reform	After the reform
Directors nominated by the FTQ	10	7
Independent directors	4^2	7^3
Directors elected by shareholders following a call for nominations	2	4
President and CEO	1	1
TOTAL	17	19

	3.	Enshrinement in the Fonds Act of the regulation adopted in 2009 requiring any investment to be approved by an investment committee made up of a majority of members independent from the Fonds and the FTQ^1; since 2009, this regulation has granted the independent members that authorize investments, including the Fonds immobilier, a veto. Furthermore, in order to increase the power of these Boards, the amount at which an investment must be submitted to the Board of Directors will increase from 5 million dollars to 25 million. Thus, the Board will only have to rule on a few major files annually and will further concentrate itself on strategic issues.
	4.	Creation of three new committees composed of a majority of members independent from the Fonds and the FTQ^1, these being (i) governance and ethics, (ii) human resources and (iii) risk management. The governance and ethics committee will be responsible in particular for: (i) the review of the seven independent candidates for annual election by shareholders, and the preparation of the list of candidates after due diligence, (ii) for the four other positions following a public call for nominations, to determine the minimum requirements for nomination and conduct due diligence before proposing candidates for the annual election to shareholders.
	5.	The duration of Board member mandates will be limited to 12 years.

In terms of ethics, the Fonds will proceed (i) to the revision of its codes of ethics in order to ensure that they meet best practices and (ii) to the outsourcing to KPMG of its anonymous ethics hotline.

The compliance of the Fonds immobilier and Fonds régionaux's with respect to best governance practices is also a priority for the Fonds. In fact, Fonds régionaux and Fonds immobilier bodies are already made up of a majority of independent members. The new governance and ethics committee will also look at governance issues of these in the coming year.

"By enshrining the principal of greater independence of the decision-making bodies from the Fonds, the FTQ expresses its respect toward the Fonds that it created and that it continues to accompany and support. It will ultimately be up to our shareholders to democratically decide the majority of the Board of Directors, as they will elect 11 of the 19 board members, including 7 who will not come from the FTQ. However, and whatever the majority, all of the measures proposed today will ensure that the Fonds have a greater independence and that all powers will be better balanced," declared Mr. Pierre-Maurice Vachon, President of the Special Governance Committee and Fonds Independent Director.

The Fonds intends to quickly submit to the Government of Québec modifications to its law. Other regulatory changes will require modifications to be made in collaboration with the Autorité des marchés financiers.

About the Fonds de solidarité FTQ

The Fonds de solidarité FTQ helps drive the Québec economy. With net assets of 9.7 billion dollars as of November 30 2013, the Fonds is a development capital fund that channels the savings of Quebecers into investments in all sectors of the economy to help create and maintain jobs and further Québec's development. The Fonds is a partner, either directly or through its network members, in 2,400 companies. With over 615,000 shareholders-savers, the Fonds helps create, maintain or protect over 170,000 jobs. For more information, visit www.FondsFTQ.com.

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¹ Including FTQ-affiliated unions.
² Nominated by the Board.
³ From now on, elected following a recommendation of the governance and ethics committee formed by a majority of independent individuals.

 

SOURCE: Fonds de solidarité FTQ

Information for journalists only:
Patrick McQuilken
Senior Advisor, Media Relations and Communications
Fonds de solidarité FTQ
Telephone: [phone]
Mobile: [phone]
email: [email protected]

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