TD Bank 2003 Annual Report Download - page 102

TD BANK FINANCIAL GROUP ANNUAL REPORT 2003 • More About Us100
Committee
Corporate
Governance
Committee
Members*
John M. Thompson
(Chair)
Marshall A. Cohen
Henry H. Ketcham
Brian F. MacNeill
Edward S. Rogers
Michael D. Sopko
Key Responsibilities
Responsibility for Corporate Governance of TDBFG:
•Set the criteria for selecting new directors;
•Identify individuals qualified to become Board members and recommend to the
Board the director nominees for the next annual meeting of shareholders;
•Develop and recommend to the Board a set of corporate governance principles
aimed at fostering a healthy governance culture at TDBFG;
•Review and recommend the compensation of the directors of TDBFG;
•Ensure TDBFG communicates effectively with its shareholders, other interested parties
and the public through a responsive communication policy;
•Oversee the evaluation of the Board and committees.
Management
Resources
Committee
Brian F. MacNeill
(Chair)
Marshall A. Cohen
Pierre H. Lessard
Wilbur J. Prezzano
Donald R. Sobey
John M. Thompson
Responsibility for Management’s Performance Evaluation,
Compensation and Succession Planning:
•Set performance objectives for the President and CEO, which encourage TDBFG’s
long-term financial success in a way that is also compatible with depositors’ interests,
and regularly measure the President and CEO’s performance against these objectives;
•Determine the President and CEO’s recommended compensation in consultation with
independent advisors who help us set competitive compensation for the President and
CEO that meets TDBFG’s hiring, retention and performance objectives;
•Review candidates for President and CEO and recommend the best candidate to the
Board as part of the succession planning process for the position of President and CEO;
•Oversee the selection, evaluation, development and compensation of other members
of senior management;
•Produce a report on executive compensation for the benefit of shareholders, which
is published in TDBFG’s annual proxy circular.
How Does the Board Ensure that it is Independent
of Management?
Independence is Key
Our Board of Directors understands the need for independence
from management. In addition to ensuring the Board composition
enhances its independent functioning, the Board has implemented
the following:
•The Board meets independently of management at every
regularly scheduled meeting;
•The Board and its committees have the authority to hire and
fire their own independent advisors;
•A strong independent Chairman of the Board with a clear
mandate to provide leadership;
•A policy requiring all directors to hold Bank shares worth six
times the annual retainer;
•The provision of high-quality information for directors – orien-
tation for new directors, meaningful educational presentations
on a continual basis, access to management and sufficient
time to review material in advance of meetings.
Board members understand that independence requires
more – it requires preparation for meetings, understanding the
issues, strength, integrity and an inquiring mind.
COMMITTEES OF THE BOARD OF DIRECTORS
We have four committees of the Board of Directors. They are the
Corporate Governance Committee, the Management Resources
Committee, the Risk Committee and the Audit Committee. Each
committee operates under a written charter that sets out the
requirements regarding committee composition and the responsi-
bilities of the committee. The key responsibilities taken from the
charter for each committee and the members of each committee
are set out on the next two pages.
All committee members are directors who are not current or
former executives of TDBFG. Each committee is chaired by a non-
management director. The committee chair spends significant
additional time on the duties of the committee and meets more
extensively with members of management. The committee chairs
set the agenda for committee meetings. The committee chairs
also report to the full Board following each committee meeting.
In addition, the committees review their charters each year
to ensure they meet or exceed the regulatory obligations as
well as the obligations to shareholders. The committees evaluate
themselves each year to ensure that they are meeting their
responsibilities under their charters and operating effectively.
Based on the results of the evaluation of the effectiveness of the
Board and the committees in 2002, the Board decided to split
one committee into two, forming the Audit Committee and the
Risk Committee. The movement to two committees permits addi-
tional time for the important tasks assigned to each committee.
Committees can meet independently of management at any
time and each committee has established its own additional
practices with respect to these meetings. For example, the Audit
Committee meets independently with each of the Chief Financial
Officer, the shareholders’ auditors, the head of Internal Audit and
on its own at each of its regularly scheduled quarterly meetings.
Each committee also has unfettered authority to retain its own
independent consultant to provide expert advice to the committee.
Below we have set out the key responsibilities from the
charter and the members of each committee. There is additional
information regarding our committees in our other corporate
governance disclosure (see page 98, Other Places to Find
Information about Corporate Governance at TDBFG).