Terms of Reference – Board of Directors
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1. Introduction and Purpose
The New Brunswick Investment Management Corporation Act (the “Act”) establishes
the Corporation with the objects to:
- Act as a trustee for certain funds specified in the Act
- Provide investment counseling services and other services
- Promote the development of the financial services industry and
capital markets in New Brunswick, and
- Carry out such other activities or duties as may be authorized
or required by the Act or the Lieutenant-Governor in Council.
The Act also establishes a Board of Directors. Section 10 provides that “The
Board shall administer the affairs of the Corporation on a commercial basis and
all decisions and actions of the Board are to be based on sound business
practices.”
These terms of reference are designed to clarify the Board’s responsibilities.
2. Board Responsibilities
In addition to meeting the requirements established by the New Brunswick
Investment Management Corporation Act and our by-laws, the Board of
Directors of the NBIMC will provide effective stewardship and strategic
leadership for the organization by fulfilling the following key governance
responsibilities:
2.1 Mission, Vision and Values
- Periodically review and continually support the Mission, Vision and Values of the NBIMC
- Ensure NBIMC values are clearly stated, widely shared and provide a framework for
decision-making throughout the organization, e.g. code of conduct and conflict of interest
policies in place to support values
2.2 Relationship with the President
- Select and recommend the appointment of the President
- Monitor and evaluate the President’s performance annually
- Approve the President’s compensation (including salary adjustments and
Incentive Compensation Awards) annually
- To the extent feasible, ensure itself as to the integrity of the President
and that the President and senior management are fostering a culture of integrity
throughout the organization
- Provide advice and counsel to the President in the execution of the President’s duties
2.3 Corporate Plans and Performance
- Provide strategic direction in the development, and final approval of the strategic plan for the NBIMC
- Approve the process for the development and approval of strategic and annual business plans
- Ensure alignment between the NBIMC Strategic Plan and the Annual Business Plan through the approval
of each Annual Business Plan (including allocation of resources in the budget)
- Monitor the performance of the NBIMC against its plan(s)
- Review results of external reviews of operations and monitor appropriate follow-up plans
- Monitor compliance of the organization with legal requirements
2.4 Investments
- Set the investment policy for the funds outlined in the Act
- Approve delegation of risk limits to Management and approve transactions exceeding
those delegated authorities
2.5 Financial Oversight
- Monitor and review financial results on a quarterly basis
- Approve annual audited financial statements
- Review and approve the annual plan and budget for the expenditure and fee recovery
structure of the Corporation
- Review and approve material transactions as required under the by-laws and the Key
Vendor Selection Policy
- Ensure the financial performance of the NBIMC is adequately and promptly reported
and the financial results are reported fairly and in accordance with generally accepted
accounting principles
- Appoint external auditor annually
2.6 Risk Management
- Understand the principal risks facing the NBIMC and the systems that management
has put into place to mitigate/manage those risks
2.7 Internal Controls and Management Information Systems
- Ensure, through the President, that effective management information systems,
processes and internal controls are in place at all levels of the organization
2.8 Human Resources Oversight
- Approve any changes to the compensation framework for the NBIMC’s management and employees
- Review employee benefits and approve material changes* when warranted
- Approve salary ranges for all positions and review and approve the President’s proposed
salary adjustments for and Incentive Compensation Awards to all employees within the organization
- Review and approve the executive compensation disclosure in the Annual Report
- Approve major changes to organizational structure
- Review and approve (a) position descriptions for officers and (b) the appointment of officers
- Ensure, through the President, that the NBIMC develops and maintains a long-term,
comprehensive, human resource plan
- Ensure that policies and systems are in place to foster a work environment that attracts
and retains talented people
- Ensure that a succession plan is in place for the President’s position and that the President,
in turn, has a succession plan in place for senior leadership and other key positions within the
organization
*Material for these purposes means any change that produces a change in the relevant costs that
exceeds the lower of 10% of current costs and $200,000, as well as any change of strategic
importance to the organization.
2.9 Communications, Stakeholder Relations and Accountability
- Ensure that the NBIMC has policies and systems in place to:
- protect and continuously enhance the NBIMC’s brand and reputation
- maintain strong and effective relations with all stakeholders, including
the provincial government and fund sponsor organizations
- monitor the effectiveness of the NBIMC stakeholder relations and
communications policies and systems
- Approve the Annual Report which contains the information required by the Act and regulations
2.10 Board Effectiveness and Efficiency
- Contribute to the nomination of high quality, diverse and competent leadership for the
Board, through a rigorous nominations process, supported by an annual skills gap assessment
- Ensure that directors have a thorough initial orientation followed by ongoing
opportunities to increase their capabilities as directors of the NBIMC
- Annually establish goals for the work of the Board and organize/adapt the Board committees
and meeting agendas to accomplish these goals
- Annually evaluate the performance of the Board, its Chair and its Committees
- Foster an effective relationship with the President and recognize the distinct roles
- Regularly review By Laws, Governance Policies and Board practices in the context of
evolving standards of governance
3. Delegation
3.1 Delegation to Management
The Board operates by delegating to Management certain of its authorities, including
spending authorizations, and by reserving certain powers to itself.
3.2 Delegation to Board Committees
Subject to the by-laws and the Act, the Board may constitute, seek the advice of, and
delegate powers, duties and responsibilities to Board Committees.
The Board may not delegate to Board Committees the power to:
- Adopt, amend or repeal by-laws
- Establish the NBIMC Investment Policies.
- Fill a vacancy in a Board Committee or in the office of the auditor of the NBIMC
- Appoint officers and/or fix their remuneration pay ranges.
- Approve NBIMC’s annual financial statements and any other financial statements
issued by the organization
3.3 Crisis Management
The Board delegates the responsibility to manage immediate crises affecting the leadership
and reputation of the organization to an ad hoc committee comprised of the Board Chair and
each of the Committee Chairs. It is understood that the entire Board will be advised of
the situation as soon as reasonably practicable and that every effort will be made to respect
the collective decision-making authority of the full Board.
3.4 Risk Management
Management is responsible for ensuring that there is a robust and reliable framework and
system in place to identify, evaluate, manage, monitor and report risks facing the Corporation.
The Board’s role is to understand the Corporation’s principal business risks and the systems
that have been put into place by Management to protect the organization against damage or
loss due to risks. The Board will:
- review and approve the risk management framework, principles and policies recommended
by Management
- review on a regular basis the Corporation’s risk management process
- obtain reasonable assurance by discussions with and comprehensive reports from
Management, the internal auditor and external advisors as appropriate, that:
- the Corporation has adequate and reliable systems and procedures for the
identification, evaluation, management and monitoring of risks facing the
Corporation, and that
- the risk management systems and procedures are properly designed and
effectively implemented.
The Board as a whole provides overall risk oversight. In addition, the various Board
Committees provide oversight with respect to categories in the Corporation’s Risk Management
Framework that fall within their mandates.
The Board, as a whole, retains risk management oversight in the following areas:
- Mission and Vision
- Strategy, Corporate Plans and Performance
- Investments
- Quality
- Accountability
It is supported in its risk management oversight in the following areas by the
following board committees:
| Stewardship Responsibility |
Board Committee |
| Relationship with the President |
Human Resources and Compensation Committee |
| Financial Oversight |
Audit Committee |
| Internal Controls and Information Systems |
Audit Committee |
| Risk Management |
Audit Committee |
| Human Resources Oversight |
Human Resources and Compensation Committee |
| Communications and Stakeholder Relations |
Governance Committee |
| Board Effectiveness and Efficiency |
Governance Committee |