Corporate Governance

The board of directors (the "Board") of the Corporation considers good corporate governance practices to be an important factor in the overall success of the Corporation. On June 30, 2005, National Instrument 58-101 - Disclosure of Corporate Governance Practices and National Policy 58-201 - Corporate Governance Guidelines Practices (as amended from time to time, collectively, the "Corporate Governance Rules") came into force. Under the Corporate Governance Rules, the Corporation is required to disclose information relating to its corporate governance practices. The Corporation is committed to adopting and adhering to corporate governance practices that either meet or exceed applicable corporate governance standards. The Corporation believes that its corporate governance practices should be compared to the highest standards currently in force and applicable to it as well as to best market practices.

In addition, the Corporation believes that director, officer and employee honesty and integrity are important factors in ensuring good corporate governance, which in turn improves corporate performance and benefits all shareholders. To that end, the Board has adopted a Code of Ethics and Conduct, which code applies to all directors, officers and employees of the Corporation and its subsidiaries, and a Financial Management Code of Ethics and Conduct, which code applies to senior management and senior financial and accounting personnel of the Corporation and its subsidiaries. Any deviations from the Code of Ethics and Conduct are required to be reported to an employee's supervisor and, if appropriate, the Chief Financial Officer of the Corporation and the Board. Any deviations from the Financial Management Code of Ethics are required to be reported to the Vice-President, Performance and Risk Management, the Chief Executive Officer (the "CEO") and/or the Chair of the Audit Committee of the Board.

Board Composition

The Board currently is comprised of seven members. A majority of the Board is comprised of independent directors. Messrs. David R. Beatty, Brendan Calder, Peter F. Cohen, Bernard I. Ghert and Michael D. Harris are considered by the Board to be independent directors within the meaning of the Corporate Governance Rules as each has "no direct or indirect material relationship" with the Corporation. The other two Board members are not independent directors within the meaning of the Corporate Governance Rules: Jay S. Hennick and Steven S. Rogers are members of management of the Corporation and a subsidiary company, respectively. In deciding whether a particular director is or is not an independent director, the Board examined the factual circumstances of each director and considered them in the context of many factors. The nominees for election to the Board at the Meeting are the current members of the Board.

The Board has always recognized the importance of independent leadership on the Board, as evidenced by its designation of Peter F. Cohen, an independent director, as Lead Director in February 2003. In May 2005, Mr. Cohen was appointed Chairman of the Board, thereby separating the roles of Chairman and CEO. Mr. Hennick, the Corporation's previous Chairman, continues as the CEO of the Corporation. As Chairman of the Board, Mr. Cohen provides leadership to directors in discharging their mandate, including by leading, managing and organizing the Board consistent with the approach to corporate governance adopted by the Board from time to time, promoting cohesiveness among the directors and being satisfied that the responsibilities of the Board and its committees are well understood by the directors. The Chairman of the Board is responsible for taking all reasonable measures to ensure that the Board fully executes its responsibilities and that directors clearly understand and respect the boundaries between the responsibilities of the Board and of management. The Board does not have a written mandate, but rather has developed a formal position description for the Chairman of the Board. The position description for the Chairman of the Board provides, among other things, that the Chairman will: (i) ensure that all business required to come before the Board is brought before the Board such that the Board is able to carry out all of its duties to manage or supervise the management of the business and affairs of the Corporation; (ii) ensure the Board has the opportunity, at each regularly scheduled meeting, to meet separately without non-independent directors and management personnel present; and (iii) in conjunction with the relevant committee of the Board (and its Chair), review and assess the directors' meeting attendance records and the effectiveness and performance of the Board, its committees (and their Chairs) and individual directors.

Board and Committee Process

In addition to having a Board comprised of a majority of independent directors, the Corporation has adopted a variety of structures to allow for the independence of the Board from management. Those structures include the appointment in May 2005 of Peter F. Cohen, an independent director, as Chairman of the Board with a mandate to assist the Board in fulfilling its duties effectively, efficiently and independent of management, the practice of having the independent members of the Board or its committees meet as a group in executive sessions (with no members of management, including the CEO, present) prior to or after regularly scheduled meetings of the Board or committees thereof and otherwise as those directors may determine, and members of the Board and its committees having the opportunity to initiate discussions with senior management without the CEO present so that they may freely discuss any concerns they may have, and the ongoing monitoring of the relationship between the Board and its committees and management by the Nominating and Corporate Governance Committee, which is composed entirely of independent directors. The Board believes that it and its committees have functioned, and continue to function, independently of management.

The Corporation's CEO reports formally to the Board, and, where appropriate, to its committees, as well as less formally through discussions with members of the Board and its committees, to advise the Board and its committees on a timely basis of courses of action that are being considered by management and are being followed. The Board exercises its responsibility for oversight through the approval of all significant decisions and initiatives affecting the Corporation. The Board has developed a formal position description for the CEO. The position description for the CEO provides that the CEO has the primary responsibility for the management of the business and affairs of the Corporation. As such, the CEO establishes the strategic and operational orientation of the Corporation and, in so doing, provides leadership and vision for the effective overall management, profitability, increase in shareholder value and growth of the Corporation and for conformity with policies agreed upon by the Board. The CEO is directly accountable to the Board for all activities of the Corporation.

Management, working with the Board and the Nominating and Corporate Governance Committee, provides an orientation program for new directors and a continuing education program for all directors to familiarize and update them with respect to the Corporation and its businesses. Prior to agreeing to join the Board, new directors are given a clear indication of the workload and time commitment required. The Chairman of the Board ensures the orientation program is carried out as directed by the Nominating and Governance Committee. New directors to the Corporation have generally been executives with extensive business experience. Orientation for these individuals is provided through a review of past Board materials and other private and public documents concerning the Corporation and visits to certain of the Corporation's businesses and offices. On a continuing basis, management provides periodic presentations for the Board to ensure that directors are aware of Corporation operations, major business trends and industry practices, and directors are free to contact the CEO, the President, the Chief Financial Officer and other members of management at any time to discuss any aspect of the Corporation's businesses.

The Board, either directly or through Board committees, is responsible for overseeing the business and affairs of the Corporation and for approving the overall direction of the Corporation, in a manner which is in the best interests of the Corporation and its shareholders. At least four meetings of the Board are scheduled each year at which the directors review in detail the financial statements, operating reports, forecasts, budgets and reports from the committees of the Board and from management. The frequency of meetings as well as the nature of agenda items changes depending upon the state of the Corporation's affairs and in light of opportunities or issues that the Corporation may face.

Board Committees

The Board has three standing committees: the Audit Committee, the Executive Compensation Committee and the Nominating and Corporate Governance Committee. The roles of these committees are outlined below. Each committee reviews and assesses its mandate at least annually and has the authority to retain special legal, accounting or other advisors. From time to time ad hoc committees of the Board may be appointed. As the Board has plenary power, any responsibility which is not delegated to management or a Board committee remains with the Board.