SCHEDULE A to the CODE OF CODUCT AND ETHICS
This Conflict of Interest Policy (the "Policy") for the National Ballet of Canada (the "Company") is designed to protect the Company’s interests when it is contemplating entering into or continuing a transaction or arrangement that might benefit the private interest of a voting member of the board of directors (such board of directors, the "Board," and such member, a "Board Member") or a member of a Board committee who is not a Board Member (a "Non-Board Committee Member") (a Board Member or a Non-Board Committee Member being referred to as a “Member”). Members shall not engage in any transaction or arrangement with the Company that involves an actual or perceived conflict of interest, except in compliance with this Policy.
This Policy is intended to supplement, but not replace, any applicable provincial or federal laws governing conflicts of interests applicable to the Company.
To assist the Members in performing the duties imposed on them by the Company or provincial and federal law with respect to their oversight responsibilities and fiduciary obligations to the Company and to the public, the Board adopts the following Policy by resolution:
I.DUTIES OF MEMBERS
a. Duty of Loyalty. Members owe a duty of loyalty to the Company which requires that, in serving the Company, they act and reach decisions solely in the interests of the Company rather than in their personal interests or in the interests of others. This duty of loyalty requires the immediate disclosure to the Company of any actual or perceived conflict of interest. Members may not use their position as Members or information they have about the Company, or the Company's property, in a manner that allows them to secure a pecuniary benefit or other personal gain for themselves or their related parties at the expense of the Company. A Member shall not use Company information for his or her personal benefit and/or the benefit of a related party, or use such information or his or her position as a Member to the detriment of the Company. Each Member is required to avoid conflict or the appearance of a conflict between the interests of the Company and the interests of another person, corporation or institution. This obligation also requires that the Board be fully informed about any transactions or arrangements into which the Company enters and with respect to which a Member may have an interest.
b. Duty of Care. Every Member shall discharge his or her duties in good faith and with the degree of care that an ordinarily prudent person in a like position would exercise under similar circumstances. This requires using common sense, being diligent and attentive to the Company's management and needs, and making thoughtful decisions in the best interest of the Company.
Members may act on behalf of the Company only within the scope of authority prescribed by the Company’s articles and bylaws, corporate resolutions, Board policies and applicable law. Members individually have no authority to bind the Company.
c. Corporate Opportunities. No Member shall take personal advantage of a business opportunity that is offered to the Company or to the Member by virtue of his or her position with the Company, unless the full Board determines (after full disclosure and a disinterested and informed evaluation) not to pursue that opportunity.
II.PROCEDURES FOR CONFLICT DISCLOSURE, EVALUATION & RESOLUTION
a. Duty to Disclose. Each Member shall complete the attached Acknowledgement and Disclosure Form annually, and on change of circumstances, which shall be submitted to the Secretary of the Company and reviewed by the Governance and Nominating Committee (the “Governance Committee”). In addition, immediately upon learning of a financial interest between the Company and a Member or any related party with respect to such an individual, and prior to the start of any negotiations with regard to a transaction or arrangement, the Member shall promptly disclose in writing all material facts of the financial interest to the Chair of the Board (the “Board Chair”), who shall then forward such disclosure to the Governance Committee. Furthermore, all such disclosures, including without limitation those involving a transaction or arrangement being considered by the Board or any Board committee (e.g., the Audit and Finance Committee or any other Board committee, as the case may be, whose scope encompasses the substantive matter in question), shall be made to all members of the Governance Committee. A Member who is in doubt as to the existence of a financial interest is encouraged to disclose all facts pertaining to the transaction or arrangement prior to the start of any negotiations in accordance with the provisions of this paragraph.
b. Determining Whether a Conflict of Interest Exists.
1.Financial Interest. The Governance Committee will evaluate the disclosures to determine whether they involve actual conflicts of interest and may attempt to develop alternatives to remove the conflict from the situation. Whenever the members of the Governance Committee are engaged in the discussion of, or voting on, a conflict of interest, whether at a meeting or within any correspondence (whether written, electronic, or otherwise), any Member who is a member of the Governance Committee and who has disclosed the financial interest shall not be present at any meeting (or shall leave such meeting), and shall be removed from any correspondence (whether written, electronic, or otherwise) among the Governance Committee members. At the option of the Governance Committee, a Member may be present prior to the discussion or vote to make a presentation to the Governance Committee, disclose additional facts, or respond to questions. However, interested individuals shall not, in any situation, attempt to influence improperly the deliberation or voting on the matter giving rise to the conflict. In the event the Governance Committee elects to have a meeting in connection with the disclosure of the financial interest, the existence of a quorum shall not be broken by the non-participation of a Member who has disclosed the financial interest.
c. Appeal. Within fifteen (15) days of receiving notice of the determination and final vote of the Governance Committee that a financial interest is a conflict of interest, a Member may appeal the determination by submitting a written request for review to the Board. The Board shall have sole discretion as to whether and how to review any such determination, and all decisions of the Board shall be final and not subject to further appeal.
d. Addressing the Conflict of Interest. The Company may enter into a transaction or arrangement in which a Member has a financial interest only if such Member has disclosed such financial interest in accordance with this Policy and all of the following are true:
- A majority of disinterested Board Members or applicable Committee members approve the transaction or arrangement after determining, in good faith and after reasonable inquiry, that the transaction or arrangement is fair and reasonable to the Company and in its best interest;
- In cases of an existing or ongoing account, arrangement, relationship or transaction, the applicable Committee(s) regularly evaluates the benefits and appropriateness of the account, arrangement, relationship or transaction to ensure it has been and continues to be handled within acceptable standards outlined in this Policy; and
- The transaction or arrangement furthers the Company's charitable purposes, and does not result in private inurement, an excess benefit transaction or impermissible private benefit under applicable laws.
e. Compliance. If a Member has reasonable cause to believe that another Member or the Company has failed to comply with this Policy, such Member shall notify the Board Chair, who shall inform the Member of the basis for such belief and afford such party the opportunity to explain to the Governance Committee the alleged failure to disclose. After hearing the response of the Member and making such further investigation as may be warranted in the circumstances, if the Governance Committee determines that the Member has in fact failed to comply with this Policy, it shall take appropriate action, which may include recommending removal from office or discharge in accordance with the law.
The records of any Board or Governance Committee meeting or other correspondence in which a financial interest or conflict of interest is discussed shall contain all of the following:
- the name of the Member who disclosed a financial interest or was otherwise found to have a conflict of interest;
- the nature of the financial interest; if necessary, any action taken to determine whether a conflict of interest was present; the Governance Committee's decision as to whether a conflict of interest existed; and a decision on whether the transaction shall be approved notwithstanding the conflict;
- the names of the persons who were present for, or otherwise participated in, discussions and votes relating to the transaction or arrangement, and a record of any votes taken in connection with the proceedings.
Each Member shall annually sign a statement which affirms such person (a) has received a copy of the Policy, (b) has read and understands the Policy, (c) agrees to comply with the Policy, and (d) understands the Company is charitable and to maintain its charitable designation must engage primarily in activities which accomplish one or more of its charitable purposes.
To ensure the Company operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted by the Board.
VI.USE OF OUTSIDE EXPERTS
When conducting periodic reviews as provided for in Section V, the Board may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the Board of responsibility for ensuring periodic reviews are conducted.
Effective Date: July 1, 2018
Scheduled Review Date: June 1, 2019
Approved by: The Board of Directors
Date: June 28, 2018