Governance - Crown Investments Corporationpub/Documents/Asset Management... · 2016-07-21 ·...

Governance

31C I C A N N U A L R E P O R T 2 0 1 5 - 1 6

BOARD OF DIRECTORS

The CIC Board of Directors consists of electedGovernment officials appointed to the Board by the Lieutenant Governor-in-Council pursuant to TheCrown Corporations Act, 1993. The CIC Board makesdecisions in its own right, provides advice andrecommendations to the Provincial Cabinet, andfunctions as a key committee to Cabinet.

The CIC Board oversees the strategic direction andrisk management of the CIC Crown sector. The Boardis guided in this role by overall Government directionprovided in the annual provincial budget. In 2015,the Government’s strategic vision, “KeepingSaskatchewan Strong”, set a long-term path formaintaining a secure and stable base for economicgrowth and the quality of life it brings to the Province.The Board’s key responsibility is to ensure that alldirection provided to the Crown sector is aligned with the Government’s vision.

BOARD RESPONSIBILITIES

The CIC Board is committed to the Government’svision and to ensuring alignment of the CIC Crownsector through the following activities:

• sets strategic priorities for the Crown sector;• oversees and ensures that risks are properly

managed and appropriate authorities and controlsare in place;

• provides strategic oversight to subsidiary Crowncorporations by reviewing annual business plans,setting performance expectations, allocating capitalwithin the sector, as well as monitoring andevaluating performance; and

• provides strategic oversight to CIC management bysetting corporate strategic direction, identifyingrisks and opportunities, approving CIC’s businessplans and budgets, and monitoring and evaluatingcorporate performance.

BOARD COMMITTEES

The CIC Board does not have separate nominating,compensation or audit and finance committees.

• CIC Board members are appointed by theLieutenant Governor-in-Council, therefore there

is no nominating committee. • The CIC Board acts as a compensation committee

by approving an executive compensationframework (pg. 39) that applies to the executives ofCIC and all subsidiary Crown corporations. TheChair of the CIC Board provides oversight of CIC’sCEO and evaluates the annual performance of theCEO.

• The CIC Board acts as an audit and financecommittee by approving CIC’s financial statementsand by meeting with external auditors and theProvincial Auditor without management present.

BOARD APPOINTMENTS & RENEWAL

The appointment and removal of members of the CICBoard, as well as the designation of the Chair andVice-Chair, are the prerogatives of the LieutenantGovernor-in-Council. The Minister of CrownInvestments must be a member of the CIC Board andis appointed as the CIC Board Chair. Pursuant to TheCrown Corporations Act, 1993, members hold officefor a term not greater than three years or until asuccessor is appointed. Member appointments can berenewed. There are seven members on the CIC Board.The Board members are all non-independentdirectors.

Governance

32 C I C A N N U A L R E P O R T 2 0 1 5 - 1 6

HONOURABLE DON McMORRIS, CHAIR

Deputy PremierMinister of Crown InvestmentsMinister Responsible for Saskatchewan Government InsuranceMinister Responsible for Saskatchewan Liquor and Gaming AuthorityMinister Responsible for Public Service CommissionMinister Responsible for Lean InitiativeSaskatchewan Opportunities Corporation

• Mr. McMorris was originally elected to the Saskatchewan Legislature in 1999 in the constituencyof Indian Head-Milestone. He was re-elected in 2003, 2007, 2011, and in 2016.

• In June 2014, he was appointed Minister of Crown Investments and Minister Responsible forSaskatchewan Government Insurance, Saskatchewan Liquor and Gaming Authority, Public ServiceCommission, and the Lean Initiative.

• Mr. McMorris served as Minister of Health from 2007 until May of 2012 when he was appointed Ministerof Highways and Infrastructure. He is among one of Canada’s longest serving Health Ministers. In May2015, Mr. McMorris was appointed Deputy Premier.

• Prior to his election to the Saskatchewan Legislature, Mr. McMorris worked with the Saskatchewan SafetyCouncil, the Prairie View School Division, and managed the family farm in the Lewvan area.

HONOURABLE NANCY HEPPNER, VICE-CHAIR

Minister of Highways and InfrastructureMinister Responsible for Saskatchewan Gaming CorporationSaskatchewan Grain Car Corporation

• Ms. Heppner was first elected to the Saskatchewan Legislature through a 2007 by-election in theconstituency of Martensville. She was re-elected in the 2007, 2011, and in 2016 provincial elections.

• Ms. Heppner has served as the Minister of Environment, Minister of Central Services, MinisterResponsible for Saskatchewan Water Corporation, Saskatchewan Watershed Authority, the Water AppealBoard, the Public Service Commission, and the Lean Initiative.

• Ms. Heppner graduated from the Saskatoon Business College in 1994, has worked as a bookkeeper andmanaged a family-owned business in Rosthern until starting her own business in 1999.

HONOURABLE KEVIN DOHERTY, BOARD MEMBER

Minister of FinanceMunicipal Financing Corporation of SaskatchewanBoard of Revenue CommissionersPublic Employees’ Pension BoardPublic Service Superannuation BoardSaskatchewan Pension PlanThe Municipal Employees Pension Commission

• Mr. Doherty was originally elected to the Saskatchewan Legislature in November 2011 in theconstituency of Regina Northeast, and was re-elected in 2016.

• He has served as Minister of Advanced Education, Minister of Parks, Culture and Sport, MinisterResponsible for SaskTel, and Minister Responsible for the Provincial Capital Commission. In May 2015,Mr. Doherty was appointed Minister of Finance.

• Prior to November 2011, Mr. Doherty served as the Vice-President of Corporate Relations at SaskPower,worked as a Division Director for Investors Group, the Director of Government Relations for BayerHealthcare, and as the Manager of Provincial Relations for Glaxo Wellcome.

CIC BOARD MEMBERS

Governance


HONOURABLE GORDON WYANT, Q.C., BOARD MEMBER

Minister of Justice and Attorney GeneralMinister Responsible for SaskBuildsHighway Traffic BoardFinancial and Consumer Affairs AuthorityLaw Reform Commission of SaskatchewanOffice of Residential TenanciesProvincial Mediation BoardPublic and Private Rights BoardSaskatchewan Human Rights CommissionSaskatchewan Legal Aid CommissionAutomobile Injury Appeal CommissionSaskBuilds Corporation

• Mr. Wyant was first elected to the Saskatchewan Legislature in the October 2010 by-election in theconstituency of Saskatoon Northwest. He was re-elected in 2011 and 2016.

• In May 2012, Mr. Wyant was appointed Minister of Justice and Attorney General and Deputy GovernmentHouse Leader. In June 2014, he was appointed Minister Responsible for SaskBuilds.

• Since 2000, Mr. Wyant has been an active public servant. He was elected Saskatoon City Councillor forWard 5 in 2003, 2006 and 2009. He has served on numerous committees of Saskatoon City Councilincluding as Chair of the Planning and Operations Committee since 2006. Mr. Wyant has served on twostanding committees of the Federation of Canadian Municipalities.

HONOURABLE JIM REITER, BOARD MEMBER

Minister of Government RelationsMinister Responsible for First Nations, Métis and Northern AffairsMinister Responsible for SaskEnergy IncorporatedMinister Responsible for Saskatchewan TelecommunicationsEmergency Management OrganizationSaskatchewan Assessment Management AgencySaskatchewan Municipal BoardTechnical Safety Authority of Saskatchewan

• Mr. Reiter was first elected in 2007 as the MLA for Rosetown-Elrose and was re-elected in 2011, and in2016. Mr. Reiter has served as Minister of Highways and Infrastructure and as the Minister Responsiblefor Saskatchewan Transportation Company. In May 2012, he was appointed Minister of GovernmentRelations and Minister Responsible for First Nations, Métis and Northern Affairs. Responsibility forSaskEnergy was added in 2014 and for SaskTel in 2015.

• Mr. Reiter has extensive experience in municipal government. He has served as Director, Vice-President,and President of the Rural Municipalities Association, as well as Executive Director.

Governance


KEVIN PHILLIPS, BOARD MEMBERMLA, Melfort

• Mr. Phillips was first elected to the Saskatchewan Legislature in 2011 in the Melfort constituency, andwas re-elected in 2016.

• Mr. Phillips is a member of the Crown and Central Agencies Standing Committee, the Red Tape ReductionCommittee and Government Deputy Whip.

• Mr. Phillips has worked in business and advertising. Mr. Phillips served on the boards of the CanadianCommunity Newspaper Association and the Saskatchewan Weekly Newspapers Association. Mr. Phillipsserved for five years as Mayor of Melfort and has also served as Vice-Chair of the Saskatchewan UrbanMunicipalities Association SUMAssure Reciprocal Insurance Company.

LARRY DOKE, BOARD MEMBERMLA, Cut Knife–Turtleford

• Mr. Doke was first elected to the Saskatchewan Legislature in 2011 in the constituency of Cut Knife–Turtleford, and was re-elected in 2016.

• Mr. Doke serves as a member of the Standing Committee on the Economy and Deputy Chair for PublicAccounts.

• Mr. Doke has previously been a business owner. He is an active member volunteering in his community.The end of July 2016 marks a total of 20 years’ service as a municipal councilor for both city and ruralmunicipalities.

BOARD OF DIRECTORS – TENURE

During 2015-16, a total of 15 Board meetings were held by the CIC Board.

• CIC Board members are provided with meeting materials in advance of meetings;• As a standing agenda item, the Board holds in-camera sessions without management present where all CIC

Board members can participate; and• Board members do not receive remuneration (retainers or per diems) for their participation on the CIC Board.

Director Position Term on the Board1

Honourable Don McMorris Chair May 25, 2012 to March 31, 2016

Honourable Nancy Heppner Vice-Chair June 11, 2014 to March 31, 2016

Honourable Kevin Doherty Member June 11, 2014 to March 31, 2016

Honourable Gordon Wyant, Q.C. Member June 11, 2014 to March 31, 2016

Honourable Jim Reiter Member May 21, 2015 to March 31, 2016

Kevin Phillips Member June 5, 2014 to March 31, 2016

Larry Doke Member May 21, 2015 to March 31, 2016

Herb Cox Member May 25, 2012 to May 21, 2015

1 To the end of the reporting period.

Organizational Structure

OPERATING DIVISIONS

At year-end, CIC had 46 positions within its three divisions:

The President & CEO is responsible for all aspects of leadership at CIC. TheCommunications and Human Resource Units report directly to the President. The Division:

• provides support and leadership in Crown communications through delivering policyadvice and information sharing;

• facilitates internal CIC communications; • supports a high-functioning organization by delivering human resource support and

leadership; and• undertakes strategic initiatives related to the Crown sector.

Provides analysis and recommendations to the CIC Board on a wide range of Crown sectorbusiness issues. Specifically, the Division supports:

• strategic Shareholder direction to the Crown sector;• oversight of Crown corporation performance management and capital allocation plans;• sector-wide financial reporting and forecasting;• management of CIC’s internal corporate budget and financial transactions;• internal audit function for CIC and smaller subsidiary Crown corporations;• corporate administration services and information management; and• prudent management and divestiture of the remaining CIC Asset Management Inc. (AMI)

investments.

Provides advice and guidance to CIC, the CIC Board and the Crown corporations and theirBoards on a wide range of policy issues. The Division:

• provides legal advisory services to CIC and the CIC Board;• develops and manages leading practices in corporate governance, including corporate

secretarial services and procedural advisory services to the Crown corporation Boards,leading-edge director training and development, and continuous governanceimprovements;

• oversees Crown sector human resource policies and programs, including: Crownexecutive compensation framework, sector-wide human resource policies, application ofthe collective bargaining framework, the Gradworks Internship Program, INROADS, andthe Aboriginal Bursary Program; and

• oversees public policy initiatives, including the Saskatchewan Immigrant Investor Fundand the Saskatchewan Rate Review Panel.

President’s Office

Finance & Administration

Human Resource Policy, Governance & Legal

Capital Pension & Benefits Administration (CPBA)(to June 30, 2015) - As per Cabinet direction, the Capital Pension Plan(CPP) contributory fund was successfully amalgamated with the Public Employees’ Pension Plan in June 2015. The CPBA divisionof CIC was then wound down. The Retirement Annuity Fund (RAF) component of CPP will remain with CIC. CIC is responsible forensuring there are sufficient assets available to pay those members who purchased life insurance annuities. The RAF is closed tonew entrants. CIC has contracted administration of the RAF to the Public Employees Benefit Agency (PEBA). CIC continues tosponsor the Benefit Plan (group benefits) and has contracted its administration to PEBA.




CIC EXECUTIVE

BLAIR SWYSTUN, CFAPresident & CEO

Blair Swystun is a Chartered Financial Analyst charter holderand has a Masters in Business Administration. He has morethan 34 years of government experience and has been at CICsince 1996, most recently in the position of Senior Vice-President and Chief Financial Officer. Blair’s public servicecareer also includes various positions at SaskatchewanFinance. Blair is a member of numerous boards andinvestment funds.

DOUG KOSLOSKI, Q.C.Senior Vice-President & General Counsel Human Resource Policy, Governance & Legal

Doug Kosloski is a lawyer and has degrees in Finance andEconomics. He has over 20 years of service with theGovernment of Saskatchewan, joining CIC in 1998. Doug is a member of a number of boards and investment funds onbehalf of CIC. In 2014, Doug was appointed Queen’sCounsel.

CINDY OGILVIE, CPA, CAVice-President & CFOFinance & Administration

Cindy Ogilvie is a Chartered Professional Accountant. She has more than 22 years of service with the Governmentof Saskatchewan, joining CIC in 2001. Cindy became Vice-President and Chief Financial Officer in 2015. She is a member of a number of boards on behalf of CIC.

RON DEDMANVice-President of Special Projects

Ron Dedman is an electrical engineer with over 23 years ofexperience in government. He has served at senior levels inboth Ministries and Crown corporations. Ron is onsecondment from CIC leading Priority Saskatchewan.


CIC EXECUTIVE TEAM

Left to right:

Cole GoertzExecutive DirectorCommunications

Cindy Ogilvie Vice-President & CFO

Blair SwystunPresident & CEO

Brian GyoerickExecutive DirectorCrown Sector & CIC Human Resources

Ron DedmanVice-President Special Projects

Doug KosloskiSenior Vice-President& General Counsel

MANAGEMENT ORGANIZATION

PRESIDENT’S DIVISIONBlair Swystun, President & CEO• Ron Dedman, Vice-President, Special Projects• Clay Reich, Executive Director, Special Projects• Cole Goertz, Executive Director, Communications

HUMAN RESOURCE POLICY, GOVERNANCE & LEGAL DIVISIONDoug Kosloski Q.C., Senior Vice-President & General Counsel• Brian Gyoerick, Executive Director, Crown Sector & CIC Human Resources• Wendy Dean, Director, Corporate Secretariat

FINANCE & ADMINISTRATION DIVISIONCindy Ogilvie, Vice-President & CFO• Travis Massier, Corporate Controller• Pam Haubrich, Director, Performance Management & Financial Analysis• Kyla Hillmer, Director, Performance Management & Financial Analysis


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SUCCESSION PLANNING

CIC provides opportunities for professionaldevelopment at all levels. CIC’s corporate programs,policies and practices form a solid foundation forensuring the corporation is well positioned to retainthe knowledge and competencies required to carryout its mandated responsibilities. They include:

• leadership development for executive andmanagement team members;

• budgeted resources for employee development;• the requirement for a training and development

objective in the annual work plan of all teammembers as well as documentation of careerobjectives; and

• a Phased Retirement Policy to facilitate knowledgetransfer from employees planning to retire to thoseemployees who will take on their responsibilities.

CORPORATE POLICIES

CIC strives to maintain the highest legal and ethicalstandards in all its business practices. Each employeeis expected to act responsibly, with integrity andhonesty, and to comply with CIC’s code of conductand its underlying policies and objectives.

CIC operates under a complete, regularly updated andapproved set of corporate policies and procedures.

CIC requires all employees, including new employeesat time of hire, to annually confirm in writing thatthey have read, understand and agree to comply withthe policies relating to employee conduct:

• Employee Conduct Policy;• Personal Information Privacy Policy;• Acceptable Use of Computing Resources Policy;

and• Anti-Harassment Policy.

Executive Compensation


INDEPENDENT & OBJECTIVE

The CIC Board directed CIC to engage an external consultant to review Crown sector executive compensationpractices and assist in the development of an Executive Compensation Framework to ensure consistencywith best practices and ensure objectivity. The current Crown Sector Executive Compensation Framework(the “Framework”) was implemented in 2006.

To maintain a meaningful degree of competitiveness with the external market, the CIC Board undertakesreviews of the Framework. External consultants are engaged to conduct reviews to assess the degree towhich Crown executive compensation aligns with the Framework’s stated philosophy and the externalmarket. Based on the results of the most recent review, the CIC Board approved changes which refined theFramework and more closely reflect market comparators. The changes were effective January 1, 2013.

2015-16 EXECUTIVE COMPENSATION

FRAMEWORK

CIC has designed and administers executive compensation consistent with the CIC Board and Cabinet’sCrown Sector Executive Compensation Framework and is committed to a “total compensation” (e.g. basesalary, pay at risk, benefits and pension) perspective.

Crown sector compensation maintains a meaningful degree of competitiveness with the relevant externallabour markets, targeting to achieve +/- 10% of the 50th percentile of market comparators (i.e. the middle of the market).


63%

11%

10%

8%

2%

3%

2%

Base Salary

Short-Term Incentive Pay

Vacation & Flex Days

Pension & Retiring Allowance

Vehicle Allowance

General Benefits

Flexible Credit Account


+CORPORATE OBJECTIVES

Balanced Scorecard (refer to pg. 26)

Financial objectives such as:• Consolidated ROE• Consolidated debt/equity ratio• Operating efficiency

STI PAY IF:

• 80% of the financial objectives are met; and

• 80% of the corporate objectives are met, including the financial objectives

INDIVIDUAL OBJECTIVES

Such as: • Leadership development• Effective communicationwith stakeholders

• Advance key projects=

COMPENSATION

Each of CIC’s Executives receives a comprehensive group benefits package and is eligible for an annual short-term incentive program in addition to their base pay.

As required by The Crown Employment Contracts Act, the CEO and direct reports of the CEO, including allexecutive members, report the details of their compensation and benefits to the Clerk of Executive Council.These filings are available for public review.

Consistent with CIC Board and Cabinet approved ranges, the CIC base salary ranges for 2015 were:

Position Base Salary RangeCEO $340,481 - $425,601Executive 1 $234,809 - $293,511Executive 2 $195,647 - $244,558

The Standing Committee on Crown and Central Agencies requires all Crown corporations to file an annualpayee list, which includes remuneration information for the Executive members. The Payee Disclosure Reportis available on CIC’s website (www.cicorp.sk.ca). The CIC Board reviews the details of these expenditurereports annually.

ELIGIBILITY FOR SHORT-TERM INCENTIVE PAY (STI)

Executive STI pay is based on both corporate and individual objectives and demonstrated results against thoseobjectives.




CIC’s corporate STI targets are directly linked to all, versus a subset of, CIC balanced scorecard (BSC) targets.Key areas of BSC responsibility specific to each executive member are weighted more heavily than other areasfor STI payout determination. Linking each executive to all BSC targets incents a collaborative, team approachto achieving corporate targets. The financial component is separately measured to focus CIC Executive onprotecting CIC and Crown sector financial sustainability and on providing an appropriate return to the people ofSaskatchewan.

The CIC Board receives quarterly progress reports regarding performance against BSC targets. STI targets arestretch goals and are objective, quantifiable, and within the span of control and/or influence of management. For the corporate component, CIC’s Executive STI measures and targets are established equivalent to the annualBSC measures and targets. STI targets may be more challenging than BSC targets, but cannot be less challengingthan the BSC targets.

Following the end of the fiscal year, each executive summarizes his/her performance for the year against the pre-set objectives and targets. A discussion between the CEO and each Senior Vice-President/Vice-Presidentoccurs regarding demonstrated results on both a corporate and individual basis. The CEO determines a finalperformance score for each Senior Vice-President/Vice-President. Similarly, the CIC Board Chair reviews anddiscusses the CEO’s annual performance results.

The CIC Board annually reviews and approves CIC’s Executive performance, including STI targets. The weighting ranges for each component are:

Position Corporate Weighting Individual WeightingCEO 90 – 80% 10 – 20%Executive 1 and Executive 2 85 – 70% 15 – 30%

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Governance - Crown Investments Corporationpub/Documents/Asset Management... · 2016-07-21 ·...

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Transcript of Governance - Crown Investments Corporationpub/Documents/Asset Management... · 2016-07-21 ·...