0 1 2 C a n a d ian p e n 17th Edition e r S tu a r t B o a Ind e x Canadian Spencer Stuart Board Index

Transcription

1 17th Edition Canadian Spencer Stuart Board Index Board Trends and Practices of Leading Canadian Companies 2012

2 contents About Spencer Stuart and the Canadian Board Index 2 Special Report Board Building in Canadian Financial Services: Changing Boards for Challenging Times 3 Board Composition Director Compensation Director Appointment Trends 10 > Directors with CEO Experience 11 > Directors with Relevant Industry Experience 12 > Directors with Financial Backgrounds 13 > Women Director Appointments 14 > International Directors 17 > First-Time Directors 18 > Active C-Level Executives 19 Board Chair Transitions 19 Separating Board Chair and CEO Roles 20 Board Size 21 Board and Committee Independence 22 Year in Review: CSSBI 100 Board Compensation in Total Director Compensation 25 Total Director Compensation by Industry 26 Annual Director Retainers 26 Meeting Fees and Committee Retainers 29 Flat Fee Compensation for Directors 31 Board Chair Compensation 32 Lead Director Compensation 34 Committee Chair Compensation 34 Travel Allowances 36 Board Organization, Process and Policies Appendices Board Committees 38 Board and Committee Meetings 39 Director Attendance 41 Board Performance Evaluations 41 Continuing Director Education 43 Majority Voting for Non-Independent Directors 44 Say on Pay Policies 44 Director Retirement Policies 45 Restrictions on Outside Board Service 45 Shareholding Requirements for CSSBI 100 Directors 46 Stock Options for CSSBI 100 Directors 47 Value of Independent CSSBI 100 Director Shareholdings 48 Comparative Board Data, 2012 CSSBI 100 Companies Canadian Spencer Stuart Board Analysis: Methodological Notes 60 Spencer Stuart Publications and Directors on the Move TM 61 1

3 about spencer stuart Spencer Stuart is one of the world s leading executive search firms. Privately held since 1956, Spencer Stuart applies its extensive knowledge of industries, functions and talent to advise select clients ranging from major multinationals to emerging companies to not-for-profit organizations to address their leadership requirements. Through 54 offices in 29 countries and a broad range of practice groups, Spencer Stuart consultants focus on senior-level executive search, board director appointments, succession planning and in-depth senior executive management assessments. We were the first global executive search firm to enter Canada in 1978, helping clients across the country achieve outstanding leadership solutions for their organizations from our offices in Toronto, Montreal, and Calgary. The premier firm for board counsel and recruitment, Spencer Stuart conducts well over half of all director assignments handled through executive search. For more than 25 years, our Board Services Practice has helped boards around the world identify and recruit independent directors, providing advice to board chairs, CEOs and nominating committees on important governance issues. In the past year alone, we have conducted more than 400 director searches. In Canada and the U.S. we are the firm of choice for leading large caps, multinationals and smaller organizations, conducting a significant number of our assignments for companies with revenues under $1 billion. In addition to our work with clients, Spencer Stuart has long played an active role in corporate governance by exploring both on our own and with prestigious institutions key concerns of boards and innovative solutions to the challenges facing them. Publishing the Canadian Spencer Stuart Board Index (CSSBI), now in its 17th edition, is just one of our many ongoing efforts: > Spencer Stuart co-founded the National Awards in Governance with the Conference Board of Canada, celebrating innovations and best practices in governance in the private, public and not-for-profit sectors. > Spencer Stuart published its first Alberta Board Index in 2012, examining the governance practices of a range of leading companies in that Western Canadian market. > We are Gold Sponsors of the Institute of Corporate Directors (ICD) and our consultants are frequent speakers at their events and seminars staged throughout the year across Canada. In partnership with the ICD, we prepare Directors on the Move, a regular feature of Director (the ICD s newsletter), providing a detailed compilation of new board director appointments across Canada. > Each year, we sponsor and participate in several acclaimed director education programs including: > The Annual Boardroom Summit, jointly sponsored by the New York Stock Exchange and Corporate Board Member; > The Annual Chairman & CEO Peer Forum hosted by Corporate Board Member; and > The Corporate Governance Conference at Northwestern University s Kellogg Graduate School of Management. 2

4 board building in canadian financial services: changing boards for challenging times Board Building in Canadian Financial Services: Changing Boards for Challenging Times Canada s financial institutions have gained worldwide attention we took a closer look at the composition of their boards For the 2012 edition of the Canadian Spencer Stuart Board Index, we place a spotlight on the boards of 26 of Canada s most significant financial institutions (see page 8 for the list), divided equally among the private and public sectors. This includes Canada s largest banks, insurance companies, pension investment organizations, and a number of other financial institutions that are Crown Corporations. Taken together, these institutions play a crucial role in the lives of Canadians and the country as a whole. Our financial system, and many of its institutions, have been positioned as world-leading, notably in the wake of the collapse of major financial players around the world and the ensuing economic and market challenges. Against this backdrop, the need for effective and strategic board governance in Canada s financial services sector has never been more critical in helping to safeguard the interests of shareholders and stakeholders nationally. For our study, we analyzed each board across a range of key competencies that we believe can be important for effective governance oversight at financial institutions. In total, the backgrounds of the 328 directors serving on the 26 boards as of November 2012 were analyzed. Throughout, we highlight the differences and similarities between boards within the public and private sectors, the apparent gaps, and the implications for ongoing board building. Getting top management financial services experience on these boards is a work in progress Questions have been raised about the levels of relevant financial services experience on the boards of Canada s financial institutions. The premise is that depth of top management ( C-level ) financial services experience allows for better oversight by these boards, particularly in challenging times. Our analysis shows that the level of C-level financial services experience, gained either in a direct or allied financial services enterprise, varies both between and within the private and public sector sets of boards. There is considerably more C-level financial services industry depth on the boards of the private sector financial institutions which, interestingly, comes after a notable level of board re-development for many. Fifteen years ago, almost no directors on the boards of these same private sector financial institutions had C-level financial services experience. By 2012, more than three-quarters (77%) of these 13 boards had at least three directors who could be classified as such. The boards of Canada s large publicly traded insurance companies have more members with C-level financial services backgrounds, on average, than do the boards of our large banks. In the public sector, two major pension asset managers and three significant Crown Corporations, providing credit and insurance services, have only one or no directors with C-level financial services experience. It does, however, need to be acknowledged that many of the public sector boards that we analyzed face considerable structural and board design constraints (e.g., stakeholder appointment rights). This may result in a pragmatic vs. experience or competency driven approach to board building. 3

5 board building in canadian financial services: changing boards for challenging times Number of Directors with C-level Financial Services Experience (per Board) 0 Directors 1 Director 2 Directors 3 Directors 4 Directors 5+Directors Average Private Sector Financial Institution Boards (n=13; Average Board Size = 14) Public Sector Financial Institution Boards (n=13; Average Board Size = 11) Upon closer analysis, the private sector boards have a broader range of relevant financial services experience (e.g., capital markets, retail banking, investments, human resource management in a financial institution). A diversity of relevant sector experience on the board is useful given the highly complex and sophisticated nature of Canada s leading financial institutions, even though experience within the public set tends to be concentrated in one function or sector within financial services. Risk management gaining considerable attention; CEOs cover a lot of ground for boards of financial institutions Risk management has become a critical matter for the boards of large financial institutions. At a general level, these boards deal with risks that are common to all large-scale organizations (e.g., enterprise, operational, and reputational risks) which require directors with the appropriate experience to provide effective oversight. CEOs are highly valued by boards for their breadth of experience, including some dimensions of risk management. There are several types of CEO represented on the boards of both the private and public financial institutions, each bringing different types of experience: CEOs of large, publicly traded organizations (or big company CEOs) from within Canada or abroad; CEOs of smaller and private companies; and CEOs of not-for-profit/public sector organizations, many with a regional focus. On average, there is double the level of CEO experience on private sector boards in financial services an average of six directors per board versus three per board on the public side and significantly fewer big company CEOs on the public side. As a result, a number of the public sector boards may lack some of the experience and knowledge in key areas of risk management (e.g., the planning and implementation of CEO succession, which is an integral enterprise risk oversight responsibility of all boards). 4

6 board building in canadian financial services: changing boards for challenging times Directors with financial services risk experience have been appointed almost universally across the boards of the private sector financial institutions The boards of large financial institutions are confronted by a set of sector-related risks (e.g., counterparty, credit, and market risks) that often lie outside an individual institution s span of control. This is not to value this type of risk over others (organizations can suffer just as much from a poorly implemented technology strategy as from lax trading practices); however, these boards ability to address financial sector-oriented risks are being more closely scrutinized and tested in Canada and abroad. We found large differences in the levels of relevant financial services risk management experience between the private and public sector boards. Almost every board in the private sector group (save for one regional bank) had at least one director who presided over a risk management function at a reasonably sized financial institution (e.g., as CEO, chief risk officer, or chief investment officer) or had senior-level experience at a financial services regulator. On the public side, however, almost half of the boards analyzed (six of 13) did not have a single director who would qualify as an expert in financial services risk. Boards with at Least one Director Having Financial Services-Related Risk Experience Private Sector Financial Public Sector Financial Institutions Institutions (n = 13) (n = 13) 92% 54% The appointment of directors with financial services risk management experience has been a recent trend. For the boards of the private sector financial institutions, 67% of the directors with this experience were appointed in the last five years; while in the public sector group, 80% were appointed over the same time frame. This trend will likely continue as more boards fill gaps and deepen their risk competencies. A further analysis of the public sector financial institution boards that lack financial services risk experience shows that they also have an abundance of directors with finance management experience (e.g., CFO, audit, accounting, corporate finance, or treasury). While financial management experience is important, for some boards it may be viewed as a proxy for relevant financial services risk management experience, which it is not. Finance acts as a rearview mirror on the financial aspects of an enterprise, whereas risk management is forward-looking in its mandate and involves the anticipation of future risks and stress testing existing systems and controls. How many financial services risk experts does a board need? One will likely not be enough to generate robust and balanced discussions on relevant risk topics. Also, as boards continue to create separate risk committees (half of the private sector boards and two of the public sector boards have them), they will need to have a sufficient number of qualified (and willing) directors to ensure the effective oversight of areas such as the review and succession of the institution's chief risk officer. 5

7 board building in canadian financial services: changing boards for challenging times There are multiple approaches to address the financial services risk capabilities of a board. Some boards prefer seniority of experience (e.g., a CEO-level executive from a large financial institution) over a functional risk expert from within the sector. Some boards find it necessary to recruit abroad (as many of the private sector financial institutions have done) given the relatively lesser depth of the Canadian pool and the conflicts that arise from the concentration of Canada s financial services sector. Ultimately, the culture of the board and the company s particular circumstances are key determinants in what type or level of risk management expertise to bring to the board. Recruiting directors with backgrounds in financial services risk does bring certain challenges. Chief among these is the need for boards to gain a complete understanding of a prospect s risk credentials and track record. Boards need to determine whether a prospect has resolved or rather contributed to a problem such as lax controls. Such due diligence becomes more challenging for boards looking outside Canada, where there is less familiarity with prospective directors and the risk cultures they led as executives. Canadian financial institutions are exposed to international markets and their success is clearly influenced by events beyond Canada s borders International experience is becoming increasingly important for the boards of Canadian financial institutions. Some of these organizations have become significantly more international in scope and in operations. However, as markets become increasingly interconnected, even financial institutions that are wholly domestic are not immune to financial events unfolding internationally. Some boards prioritize on-the-ground experience in a particular geography when recruiting new directors. Regardless, every major financial sector board benefits from having insights into international market trends and the implications. Private sector boards in financial services generally have significantly more international depth, with more directors having direct, on the ground experience in relevant markets and/or significant exposure to these through leading a global business. This is not the case for public sector financial services boards, even though many of them are increasingly international in their scope, operations, and investments, as with our large pension investment managers. Number of Directors with International Experience or Exposure Private Sector Financial Public Sector Financial Institutions Institutions (n = 13) (n = 13) Average: 5 Average: 1 Only two of the public sector financial services boards have directors who do not reside in Canada (largely because of by-laws that preclude the possibility). The six other boards in the sector who have international experience appointed individuals who had previously held positions either abroad or with organizations operating internationally. 6

8 board building in canadian financial services: changing boards for challenging times Boards of Canadian financial institutions are making progress in the appointment of women directors Board diversity has become a key challenge for all boards and will remain so in the years to come. In terms of appointing more women directors, the boards of Canada s financial services sector (private and public alike) have led the way. In 2012, women held 30% of all directorships on the boards of the 26 financial institutions we examined roughly double the rate of women directors reported for Financial Post 500 companies. 1 An even stronger indication of progress is that, over the last three years, women represented 40% of all incoming directors to the boards of financial institutions in both the private and public sectors. This is almost double the rate of women director appointments at CSSBI 100 companies (Spencer Stuart's sample of leading Canadian publicly-traded companies with revenues $1 billion and higher) outside the sector over the same time period. Canadian Director Appointments by Gender ( ) Canadian Financial CSSBI 100 Institution Boards (Excluding Financial Services) (n = 26) 40% 23% 60% 77% Women Men Often, the women appointed had relevant sector and functional experience. Over the last three years, more than one-third (38%) of the women appointed to the boards of public sector financial institutions had prior C-level financial services sector experience; an even higher proportion (60%) appointed to the boards of private sector financial institutions had this experience. If the current appointment rate of women to financial services boards is sustained, based on a potential 30% director turnover rate (i.e., considering mandatory retirements and other turnover) over the coming five years, the representation of women on the boards of Canadian financial institutions would reach nearly 40%. Furthermore, several of these boards would reach or even exceed gender parity within that time frame. However, the story with visible diversity is entirely different: There were only 12 directors from visible minority groups out of a total of 328 directors across the 26 Canadian financial services boards that were analyzed. This represents another board building challenge for our large financial institutions, one in which additional director talent pools will need to be identified and tapped Catalyst Census: Financial Post 500 Women Board Directors ( 7

9 board building in canadian financial services: changing boards for challenging times Financial services board building is a unique balancing act Board building for financial institutions is a significant, ongoing endeavor, both in complexity and importance. It requires a careful balancing of a board s functional, industry and geographic requirements with the interests and agendas of a broad range of shareholders and stakeholders (e.g., beneficiaries, customers, depositors, regulators). We have seen significant progress over the last decade in the way boards of leading Canadian financial institutions approach board succession planning and director recruitment. It remains a delicate process which requires both recognizing the legacy cultures of these boards and the need for board members who are able to deal with the increasing complexity of the financial sector. Canadian Financial Institution Boards Analyzed in the Spencer Stuart Study Private Sector Financial Institutions Bank of Montreal Bank of Nova Scotia Canadian Imperial Bank of Commerce Canadian Western Bank Great-West Life Co. Industrial Alliance Insurance and Financial Services Inc. Intact Financial Corporation Laurentian Bank Manulife Financial Corporation National Bank of Canada Royal Bank of Canada Sun Life Financial Inc. Toronto-Dominion Bank Public Sector Financial Institutions Alberta Investment Management Corporation British Columbia Investment Management Corporation Business Development Bank of Canada Caisse de dépôt et placement du Québec Canada Deposit Insurance Corporation Canada Mortgage and Housing Corporation Canada Pension Plan Investment Board Export Development Canada Farm Credit Canada Healthcare of Ontario Pension Plan OMERS Administration Corporation Ontario Teachers Pension Plan Public Sector Pension Investment Board 8

10 Board Composition 2012 CSSBI 100 9

11 board composition 2012 Board Composition highlights > CSSBI 100 boards appointed 78 new directors in , which is below the average of 84 appointments for the previous five years. > Women accounted for nearly one-third (32%) of all incoming directors to CSSBI 100 boards in 2012 a second consecutive high point and the first time (in the CSSBI) that women director appointments exceeded 30% in a single year. > First-time public company directors accounted for nearly one-third (30%) of all incoming directors to CSSBI 100 boards in 2012, holding at that level for the second consecutive year. > In 2012, there was a large increase in the number of directors with investing and Chief Financial Officer (CFO) backgrounds that were appointed by CSSBI 100 boards. director appointment TRENDS Boards in continual renewal > The signs of ongoing board renewal are reflected in the number of CSSBI 100 boards that appointed multiple directors in a single year. > Several boards have been right-skilling, replacing retiring directors with new ones with specific functional experience and relevant market knowledge (e.g. knowledge of Asian markets). The restructuring of several companies also resulted in wholesale changes at the board level. > As many as 19 CSSBI 100 boards (or almost one in every five boards) turned over at least half of their directors in the last six years, well above the average CSSBI 100 turnover rate of 37% over the same period. CSSBI 100 Boards that Appointed Multiple Directors in a Single Year ( ) Directors 3 Directors 4+ Directors 10 2 Directors appointed to CSSBI 100 boards from December 2011 through to the end of November 2012.

12 board composition HISTORICAL REVIEW OF DIRECTORS APPOINTED TO THE BOARDS OF LEADING CANADIAN COMPANIES Backgrounds of Independent Directors Appointed to CSSBI 100 Boards ( ) CEO Backgrounds 45% 54% 61% 57% 46% 55% 49% 44% 49% 42% 43% Industry Experts 3 52% 37% 32% 36% 39% 55% 33% 64% 49% 43% 42% Financial Backgrounds 4 38% 53% 36% 41% 37% 40% 47% 47% 39% 58% 40% Women Directors 18% 12% 12% 10% 20% 17% 26% 13% 20% 29% 32% International Directors 5 33% 22% 28% 27% 24% 28% 18% 26% 40% 33% 31% First-Time Directors 6 13% 15% 17% 11% 25% 23% 23% 24% 21% 31% 30% Active C-Level Executives 7 17% 11% 17% 9% 13% 11% 26% 19% 19% 21% 11% Directors with CEO experience challenging to recruit > The appointment of directors with CEO experience has been on a slight downward trend in recent years. The situation likely has more to do with the lack of supply and the difficulties boards experience in landing CEOs. > Fulfilling the desire for CEOs in the future will continue to be somewhat challenging given the selectiveness of active CEOs (or the restrictions being put on them by their companies) regarding outside board service, and the limited capacity of the retired ones to take on additional board commitments. Appointments of Directors with CEO Experience to CSSBI 100 Boards (Three-year averages; proportion of all CSSBI 100 director appointments) % 45% 3 Directors with experience within the industry (or an allied sector) of the company making the appointment. 4 Directors with either relevant financial experience (e.g. CFOs; treasurers; retired accounting/audit firm partners; bankers) or professional credentials (e.g. Chartered Accountants). 5 Directors who were not resident in Canada. 6 Individuals without prior publicly-traded company board experience. 7 Category excludes CEOs; includes other C-Level roles such as Chief Operating Officers, divisional Presidents, CFOs. 11

13 board composition Boards continue to seek relevant industry experience > As in 2011, a large portion (42%) new director appointments to CSSBI 100 boards were industry experts. > Over the past six years, such appointments have been fairly stable at roughly one in every two appointments. Appointments of Industry Experts to CSSBI 100 Boards (Three-year averages; proportion of all CSSBI 100 director appointments) % 45% Big change in board composition, significantly more industry experts > Boards of leading Canadian companies have clearly made relevant industry experience a priority. In 1997, most CSSBI 100 boards (67%) had little or no relevant industry depth. Just over one-third (34%) lacked any directors with relevant industry experience and an additional third of CSSBI 100 boards had only one director with such experience. > In 2012, the vast majority of CSSBI 100 boards (79%) had three or more directors (excluding the CEO and management directors) with relevant industry experience, compared to just over 10% in > While many boards deepened their collective experience within their company s sector, several boards filled gaps as part of ongoing board succession planning. Number of Industry Experts on CSSBI 100 Boards (1997 versus 2012) 0 Directors 1 Director 2 Directors 3+ Directors 79% 34% 33% 1% 7% 21% 13% 12% 1997 CSSBI CSSBI

14 board composition Directors with financial backgrounds highly desired despite decline in 2012 > Directors with financial backgrounds decreased from nearly 60% in 2011 to 40% of all incoming directors to CSSBI 100 boards in The rate in 2012 was closer to the average for the past six years. > Directors with financial backgrounds still represented a large proportion of annual director appointments. This is indicative of the financial skills required by CSSBI 100 boards to deal with challenging market conditions and to meet stringent financial oversight requirements. Appointments of Directors with Financial Backgrounds to CSSBI 100 Boards ( ) % 47% 47% Average: 45% 40% 39% 40% Investment Managers and CFOs topped the financial table in 2012, retired audit firm partners also in higher demand > CSSBI 100 boards have been appointing directors with a wide range of financial backgrounds to address matters such as audit, financial strategy, mergers and acquisitions, and risk. > In 2012, there was a large increase in the number of directors with investing and CFO backgrounds who were appointed by CSSBI 100 boards. The majority of directors with investing backgrounds brought relevant functional experience, as opposed to being a representative of a major shareholder. All but one of the CFOs were retired. > Appointments of audit firm partners (all retired) were almost three times higher than in At nearly one-third (29%), they exceeded the previous high point of 22% set in 2006 for the category. > Banking executives (mostly retired) with capital markets, finance and deal structuring knowledge continued to rank highly among CSSBI 100 director appointments. Appointments of Directors with Financial Backgrounds to CSSBI 100 Boards ( ) Investment Managers/Investors 26% 7% 20% 8% 11% 19% 28% 22% 24% 17% 39% Chief Financial Officers 8 13% 22% 15% 16% 17% 19% 21% 13% 15% 15% 32% Audit Firm Partners 9% 18% 15% 11% 22% 6% 10% 15% 6% 9% 29% Bankers/Investment Bankers 13% 20% 40% 26% 17% 13% 17% 25% 24% 30% 29% Other executives with financial experience 39% 33% 10% 39% 33% 42% 24% 25% 39% 28% 10% 8 Includes active and retired CFOs. 13

15 board composition Women director appointments on the rise, reached another high in 2012 > Women accounted for nearly one-third (32%) of all incoming directors to CSSBI 100 boards in 2012 a second consecutive high point and the first time (in the CSSBI) that women director appointments exceeded 30% in a single year. > Women appointments increased in each of the last three years, as reflected in the higher three-year trend. > Over the past three years, the appointments of women directors were almost evenly divided between the boards of the smaller and larger CSSBI 100 companies. Also, almost half of these women (42%) were first time public company directors and a large portion were non-canadian residents. Appointments of Women Directors to CSSBI 100 Boards (Three-year averages; proportion of all CSSBI 100 director appointments) % 27% Recruitment of non-canadian women declined in 2012 > In 2012, the number of women directors residing outside of Canada (for the most part residents of the U.S.) decreased to 28% of all women appointed to CSSBI 100 boards, closer to the average for the last six years. This was the first decrease after two consecutive annual increases, as CSSBI 100 boards recruited more women from within the domestic Canadian pool in > A majority (57%) of the women recruited cross border had relevant sector experience, while the rest could be described as functional experts. Women Directors Recruited From Outside Canada to CSSBI 100 Boards ( ) (as a proportion of all women director recruits) % 36% 24% 25% 28% Average: 27% 16% 14

16 board composition Canadian utilities and financial services boards nearing gender appointment parity > In the last three years, almost one in every two directors appointed by the boards of CSSBI 100 utilities and financial services companies were women. The rates were well above the overall averages for the CSSBI 100 and comparable U.S. firms and also the consumer sector, which we would have expected to be higher on both sides of the border. > Women appointment rates in Canada, by sector, were skewed at the upper and lower ends of the range, whereas the U.S. had less variation. Women Appointment Rates by Industry: Canada-U.S. Comparison ( ) Utilities Financial Consumer Technology, Metals & Transportation Paper & Forest Oil & Industrial Services Communications Mining Products Gas Media 46% 40% CSSBI 100 Average: 27% Comparable U.S. Average: 23% 15% 23% 29% 26% 26% 22% 22% 17% 24% 20% 17% 26% 11% 18% 7% 24% CSSBI 100 Comparable U.S. Despite increases in appointments, overall representation for women remained the same > Despite the recent increases in women director appointments by CSSBI 100 boards, gains in the overall proportion of women directors have been small, following the same track as comparable U.S. boards. > In 2012, not a single CSSBI 100 board reached gender parity the closest board reached 43% of women. Among comparable U.S. boards, one board reached full gender parity and four others were one woman short. > There continued to be a higher proportion of women serving on the boards of the larger CSSBI 100 companies. In 2012, 18% of the boards of the larger CSSBI 100 companies were comprised of women, three percentage points more than the boards of the smaller ones. The differences were similar for the boards of the comparable sets of U.S. firms. 15

17 board composition Women as a % of All Directors in the Constant Set of Companies: Canada-U.S. Comparison ( ) % 17% 16% 15% 14% 14% 15% 15% 15% 14% 15% 16% 16% 16% 16% 17% 17% 17% 17% 13% 13% 13% 12% CSSBI 100 (n=72) Comparable U.S. (n=274) More boards with three plus women, fewer all-male boards > Since 2006, there has been a noticeable increase in the number of CSSBI 100 boards with multiple women directors. > There were almost double the number of CSSBI 100 boards with three or more women directors (26 in 2012 versus 15 in 2006). > The number of CSSBI 100 boards with four or more women directors has also tripled between 2006 and > The number of all-male CSSBI 100 boards (12 in 2012) decreased slightly compared to CSSBI 100 Boards with Multiple Women Directors % 5% 31% 31% 29% 0 1 4% 11% 34% 36% 15% Number of Women Per Board 2 12% 14% 36% 26% 12%

18 board composition More women in chair roles > Women have made some recent gains in assuming board leadership roles on CSSBI 100 boards. > The largest increases since 2008 occurred in the number of women who were appointed to board chair, vice chair or lead director positions and human resources & compensation committee chair roles. Number of Women in Chair Roles 9 Board Chair/ Human Resources & Environment, Nominating & Audit & Risk Total Vice Chair/ Compensation Health & Safety Governance Committee Lead Director Committee Committee Committee International director appointments down to average levels > International director appointments (i.e. directors residing outside of Canada) decreased slightly from 33% in 2011 to 31% of all newly appointed directors to CSSBI 100 boards in the second consecutive decline since reaching a high of 40% in > Boards have still been fulfilling a range of their requirements (e.g. CEO experience plus relevant industry backgrounds) by going abroad, but not as much as in recent years. > International directors comprised about one-fifth (22%) of all CSSBI 100 directorships in 2012, which translated to an average of two international directors per board. > U.S. residents represented the vast majority (76%) of all international directors on CSSBI 100 boards. Appointments of International Directors to CSSBI 100 Boards ( ) % 33% 28% 18% 26% 31% Average: 29% 9 Individual categories do not amount to total because of overlaps in chair responsibilities. 17

19 board composition LOCATIONS OF INTERNATIONAL DIRECTORS SERVING ON CSSBI 100 Boards U.K. 6% Continental U.S. 76% Europe 7% Asia 5% Latin America/ Carribean 3% Middle East 1% Australia/ New Zealand 2% First-time director appointments holding up > First-time, public company directors accounted for nearly one-third (30%) of all incoming directors to CSSBI 100 boards in It was the second consecutive year in which the director appointments in this category reached at least the 30% mark. > Prior board experience is still highly valued, but there are limits to the Canadian pool of experienced board directors. With boards seeking specific functional and industry experience, many showed continued flexibility regarding prospects lacking public company board experience. > Ensuring effective on-boarding, assimilation and appropriate director education will continue to be necessary parts of board succession planning; ultimately, chair mentorship and the influence of other seasoned directors will be key to the ongoing development and success of these directors. Appointments of First-Time Directors to CSSBI 100 Boards (Three-year averages; proportion of all CSSBI 100 director appointments) % 27% 18

20 board composition Steady demand for active C-Level recruits > The recruitment of active C-level (non-ceo) executives has remained steady at close to 20% of incoming directors to CSSBI 100 boards. > Boards of leading Canadian companies have recognized the potential of this next generation pool of directors and their interest is reflected in the data. > The pool of active C-Level recruits has also increased because more companies are permitting and encouraging their senior-level executives (especially CEO succession prospects) to serve on outside boards. Appointments of Active C-Level (Non-CEO) Executives to CSSBI 100 Boards (Three-year averages; proportion of all CSSBI 100 director appointments) % 17% BOARD CHAIR TRANSITIONS Uptick in board chair turnover, preference for internal successors > At the board leadership level, 26% of CSSBI 100 boards selected a new board chair in the last three years. There were 11 board chair transitions in 2012, slightly higher than in 2011 and 2010 (8 and 7 respectively). The changes were highest amongst the smaller CSSBI 100 companies. > Nearly all of the new board chairs were internal successors, an indication that CSSBI 100 boards emphasize company knowledge and board continuity. Number of CSSBI 100 Board Chair Transitions ( ) Total CSSBI 100 Over $5 Billion $1 - $5 Billion

21 board composition SEPARATING BOARD CHAIR AND CHIEF EXECUTIVE OFFICER ROLES Separate board chair and CEO roles entrenched in Canada, slow adoption in the U.S. > A significant majority (85%) of CSSBI 100 companies separated the role of board chair and CEO, consistent with governance practices in the Australia, Continental Europe and the United Kingdom. > In the U.S., by contrast, only 42% of comparable firms followed the practice; after a steady increase from , the growth in the number of U.S. firms splitting the role has increased only marginally. Separate Board Chair and CEO Roles: Canada-U.S Comparison ( ) % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 81% 28% 80% 79% 79% 31% 34% 36% CSSBI % 39% 87% 85% 39% 40% Comparable U.S. 85% 41% 85% 42% Separate but not necessarily independent board chairs > While the vast majority of CSSBI 100 companies separated the board chair and CEO roles in 2012, many board chairs (40%) were non-independent. In the U.S., by comparison, 72% of the 184 separate U.S. board chairs were considered non-independent. > Notably, 28% of the separate chairs in the CSSBI 100 were either the company s founder or a past CEO or senior executive of the company. Backgrounds and Experience of CSSBI 100 Board Chairs Prior Large Company Prior Large Company Experience in the Founder/Prior CEO CEO Experience Board Chair Company's Industry of Company/Past Experience Senior Executive of Company 71% 60% 55% 28% 20

22 board composition BOARD SIZE Small differences in the size of Canadian versus U.S. boards > Overall, CSSBI 100 boards were one director smaller than comparable U.S. boards; however, the boards of the larger CSSBI 100 companies were slightly larger than their U.S. comparables. Median Board Size: 2012 Canada-U.S. Comparison 2012 CSSBI 100 Comparable U.S. Overall, 11 Over $5 billion, 13 $1 - $5 billion, 10 Overall, 12 Over $5 billion, 12 $1 - $5 billion, 10 Boards have slimmed down > Over the years, there has been a noticeable shift toward smaller boards, specifically those in the six to 10 director range. The number of CSSBI 100 boards with 11 or more directors continued to decline. > The largest CSSBI 100 boards were financial institutions (e.g. banks) and family-contolled companies. Board Size Distribution CSSBI Up to 5 0% 1% 0% 6 to 10 20% 33% 46% 11 to 15 67% 57% 47% 16 and Over 13% 9% 7% 21

23 board composition BOARD AND COMMITTEE INDEPENDENCE Board independence has topped out > Eighty-one % of CSSBI 100 directors were independent, 10 just under the level of comparable U.S. firms (84%). The proportion of independent directors on the boards of CSSBI 100 companies has remained much the same for the past six years, suggesting little likelihood of further increases. > CSSBI 100 boards had an average of two non-independent directors per board. Aside from the current CEOs of CSSBI 100 companies, the other non-independent directors tended to be former executives of the company and family members. Committee independence increased, key committees almost fully independent > Since 1997, the focal committees of CSSBI 100 boards have become virtually independent. 11 > Nominating & governance committee independence has increased the most. There has also been a significant increase in the independence of the human resources & compensation committee. The latter is a reflection of the need for an independent process in determining executive pay. Committee Independence of CSSBI 100 Boards Audit Nominating & Human Resources & Governance Compensation 73% 95% 100% 81% 97% 63% 88% 98% 42% As defined by Canadian Securities Administration ( CSA ) Multilateral Instrument , Part In accordance with CSA, Multilateral Instrument , Part 3.1.

24 Board Compensation 2012 CSSBI

25 board compensation 2012 BOARD COMPENSATION HIGHLIGHTS > The median annual director retainer at CSSBI 100 companies (including equity) reached $120,000 in 2012, an increase of 9% over the prior year. > Annual director retainers at CSSBI 100 companies have been growing at a slower rate over the last 5 years than at comparable U.S. firms (10% versus 13% on a compounded annual basis). > The number of CSSBI 100 boards offering higher, differential retainers to the chairs of their human resources & compensation committees more than doubled in Year in Review CSSBI 100 Board Compensation in 2012* Total Director Compensation $154,500 Director Retainer (Including Equity) $120,000 Director Equity Grant $60,000 Total Board Chair Compensation (Including Equity) $330,000 Board Chair Equity Grant $90,000 Additional Compensation to Lead Directors $30,000 Committee Chair Retainer $12,000 Audit Committee Retainer $20,000 Committee Member Retainer (where applicable) $4,500 Board and Committee Meeting Fee $1,500 * All figures are presented as median values. 24

26 board compensation total director compensation Canadian director compensation still well below U.S. > Median total non-executive director compensation 12 for the CSSBI 100 in 2012 was $154,250, or $66,500 (30%) less than that paid by comparable U.S. firms. > Equity represented a relatively higher proportion of the overall director compensation mix offered by comparable U.S. boards. There was much less of a gap in cash portions between the large CSSBI 100 and comparable U.S. firms. > Of note, almost 20% of the comparable U.S. firms granted two, concurrent forms of equity compensation: stock options, in addition to DSUs or RSUs and/or common shares. > Unlike the comparable sets of CSSBI 100 companies, there was a relatively small difference between the larger and smaller sets of the comparable U.S. firms; interestingly, the smaller U.S. firms offered compensation that was markedly higher than even the larger CSSBI 100 companies. Median Total Director Compensation: 2012 Canada-U.S. Comparison Total Comparable CSSBI Comparable CSSBI Comparable CSSBI U.S. 100 U.S. 100 U.S. 100 (n=434) (n=48) (n=283) (n=52) (n=151) $154,500 42% US$221,000 50% $185,000 50% US$237,500 50% $121,500 39% US$198,500 53% 58% 50% 50% 50% 61% 47% Overall Cash Over $5 billion $1 - $5 billion Equity At a Glance Equity Compensation Practices of CSSBI 100 Boards 83% of CSSBI 100 boards required their directors to receive some form of equity (mostly in the form of common shares and or DSU/RSUs). 62 CSSBI 100 companies granted equity with a pre-set dollar value (e.g. $20,000 in DSUs). 21 CSSBI 100 companies granted share units valued at market (e.g common shares issued on a particular day). 7 CSSBI 100 companies granted stock options to directors; the fair market value of the options ranged from an estimated $26,000 to $105, % of CSSBI 100 boards did not require their directors to receive at least a portion of their compensation in equity. 12 Median of total compensation paid to each non-executive director (excluding board chairs), as disclosed in each CSSBI 100 company s Information Circular. 25

27 board compensation TOTAL DIRECTOR COMPENSATION BY INDUSTRY Oil & Gas and Metals & Mining companies had the highest director compensation > CSSBI 100 companies in the natural resources sector occupied the highest and lowest ends of the range for median total director compensation CSSBI 100 Industry Table: Median Total Director Compensation Oil & Gas (n=9) Metals & Mining (n=8) Financial Services (n=14) Utilities (n=6) Transportation (n=8) Technology, Communications & Media (n=15) Industrial (n=17) Consumer Products (n=18) Paper & Forest Products (n=5) 37% 63% 47% 53% 55% 45% $172,500 56% 44% $165,500 62% 38% $160,500 59% 41% $149,500 57% 43% $141,000 64% 36% $120,000 48% 52% $106,500 $229,000 $226,500 Cash Equity annual director retainers Annual director retainers were roughly equally balanced between cash and equity > The median CSSBI 100 director retainer in 2012 was $120,000, 45% of which came in the form of riskbased, equity compensation. The smaller CSSBI 100 companies offered a higher proportion of cash (61% versus 50% for the larger CSSBI companies). > Director retainers ranged from a low of $30,000 to a high of $316,000 per annum (including equity). > The equity portion (as a percentage of the overall director retainer) ranged from a low of 14% to a high of 100% for the 83 CSSBI 100 companies that required their directors to accept equity remuneration. > In 2012, two CSSBI 100 companies remunerated their directors entirely in equity and five other companies granted at least 80% of their annual director retainer in equity; there has been no change over the last four years in the number of CSSBI 100 companies providing director retainers weighted that heavily in equity. 26

28 board compensation The Range of 2012 CSSBI 100 Director Retainers (Including Equity) 1 st Percentile 25 th Percentile 50 th Percentile 75 th Percentile 99 th Percentile $30,000 $67,000 $120,000 $160,000 $316,000 Director retainers up nearly 10% in 2012, driven by equity > The median director retainer (including equity) for the CSSBI 100 rose by 9% between 2011 and > In 2012, almost half (46%) of CSSBI 100 companies increased their annual director retainers by an average of 24%. Increases in the equity portion of existing director compensation plans and newlyadopted share grant programmes at five companies, accounted for two-thirds of director retainer growth in > Large CSSBI 100 companies drove the retainer growth, while those at the smaller CSSBI 100 boards were flat year to year. Median Director Retainers for the Constant Set of 93 CSSBI 100 Companies ( ) Overall (n=93) Over $5 Billion (n=45) $1-$5 Billion (n=48) $160,000 $110,000 $120,000 45% 41% $140,000 40% 41% $80,000 $80,000 59% 55% 60% 59% 46% 54% 45% 55% Cash Equity 27

29 board compensation More retainers now in $150K+ range > In 2012, over one-third of annual director retainers (including equity) were $150,000 and higher, or almost four times more than in There were also considerably more retainers in the $100,000 to $124,999 range compared to The Distribution of CSSBI 100 Director Retainers (2005 versus 2012) Under $50,000- $75,000- $100,000- $125,000- $150,000- $175,000- $200,000+ $50,000 $74,999 $99,999 $124,999 $149,999 $174,999 $199,999 35% 9% 21% 18% 12% 8% 11% 18% 11% 12% 3% 13% 4% 9% 3% 13% Canadian director retainers growing at a slower rate compared to the U.S., difference is significant > Director retainers (including equity) at CSSBI 100 companies grew three percentage points less annually (on a compounded basis) compared to those of comparable U.S. firms. > CSSBI 100 director retainers would be almost $30,000 higher by 2012 had they increased at the same compounded annual growth rate as the U.S. Annual Director Retainer Growth: Canada-U.S. Comparison ( ) US$115,000 $80,000 US$140,000 $90,500 $90,000 US$145,000 $102,000 $98,500 US$150,000 $115,500 $100,000 US$180,000 $130,500 $110,000 US$190,000 $147,500 $120,000 Projected CSSBI 100 Director Retainers with a 13% CAGR CSSBI 100 (CAGR: 10%) Comparable U.S. (CAGR: 13%) 28

30 board compensation meeting fees and committee retainers Flat fees more prevalent in the U.S., committee members retainers more common and less restrictive in Canada > CSSBI 100 companies continued to offer meeting fees more often than comparable U.S. firms which, in turn, offered their directors more flat, all-inclusive fees. 13 > The use of committee member retainers was far more common and less restrictive (i.e. applicable to all committee members) amongst CSSBI 100 companies. Amongst the 65% of CSSBI 100 boards that gave extra retainers to committee members, nearly all such retainers applied to all standing committees of the board. Five additional companies provided retainers exclusively to audit committee members. > While 24% of comparable U.S. firms offered committee member retainers, an additional 81 U.S. boards paid them exclusively to the members of the audit committee. Board Committee Committee Committee Flat Fees Meeting Fees Meeting Fees Chair Member Retainer Retainer 2012 CSSBI % 77% 100% 65% 21% Comparable U.S. 34% 35% 93% 24% 66% Canadian and U.S. meeting fees and committee retainers were on par > Median meeting fees and committee chair retainers were the same at the larger and smaller CSSBI 100 boards in Larger CSSBI 100 boards still tended to give higher ($2,000 more) committee member retainers, but the spread that typically existed between the two groups when it came to committee chair retainers has been eliminated. > Overall, meeting fees and committee retainers were close to those of comparable U.S. firms. While CSSBI 100 boards tended to offer uniform board and committee meeting fees (respectively, $1,500 per meeting), comparable U.S. boards (where applicable) offered higher amounts for board meeting fees ($500 more on a median basis). 13 Inclusive of board and committee meeting fees. 29

31 board compensation Audit committee members often paid more > Just over half of the CSSBI 100 companies that offered committee member retainers in 2012 (36 of 65) paid a significantly higher amount to the members of their audit committees. Since 2005, 15 more CSSBI 100 companies adopted such a practice. > The median audit committee member retainer for the applicable CSSBI 100 companies was $6,000, or $1,500 more than that paid to other committee members. 14 > In the U.S., by comparison, out of the 24% of comparable firms (106 out of 434) that offered a retainer to all committee members, 79% (84 of 106) provided a relatively higher audit member retainer. The median audit committee member retainer at those 84 comparable U.S. firms was US$14,000, or US$6,000 more than other committee members. Median Meeting Fees and Committee Retainers: 2012 Canada-U.S. Comparison CSSBI Comparable CSSBI Comparable CSSBI Comparable 100 U.S. 100 U.S. 100 U.S. (n=434) (n=48) (n=283) (n=52) (n=151) $4,500 US$8,000 $5,000 US$8,000 $3,000 US$8,000 $12,000 US$10,000 $12,000 US$10,000 $12,000 US$10,000 $1,500 US$1,500 $1,500 US$1,500 $1,500 US$1,500 $1,500 US$2,000 $1,500 US$2,000 $1,500 US$2,000 Overall Over $5 billion $1 - $5 billion Board Meeting Fees Committee Meeting Fees Committee Chair Retainer Committee Member Retainer This amount does not include the five CSSBI 100 boards that gave committee member retainers exclusively to members of the audit committee.

32 board compensation flat fees for directors Flat, all-inclusive fees for Canadian directors unchanged > For the applicable CSSBI 100 companies, the median flat fee was $185,000 (including equity). > The number of CSSBI 100 boards that remunerated their directors with a flat fee has remained the same for the past five years. Almost one-quarter (23%) of CSSBI 100 boards remunerated their directors with a flat fee in > A majority (14 out of 23) of boards that offered flat fees were larger CSSBI 100 companies. The boards that offered flat fees to directors held roughly the same number of board meetings as did the ones that did not. To reiterate, the practice is far more prevalent in the U.S., where two-thirds (66%) of the comparable U.S. firms offered flat fees to directors. CSSBI 100 Boards that Pay Flat Fees to Directors Agnico-Eagle Mines Air Canada Barrick Gold Corporation BCE Brookfield Asset Management CAE Domtar Corporation Enbridge Fairfax Financial Holdings Husky Energy Kinross Gold Corporation Manitoba Telecom Services National Bank of Canada Potash Corporation of Saskatchewan Research in Motion Resolute Forest Products Royal Bank of Canada Shoppers Drug Mart Corporation Toronto-Dominion Bank Valeant Pharmaceuticals International Viterra WestJet Yellow Media Flat fees lower in Canada, at risk compensation higher in U.S. > When offered by CSSBI 100 companies, flat fee compensation to directors was $35,000 (or 16%) less than that paid by comparable U.S. firms. > The comparable U.S. firms also gave their directors higher amounts of equity (many as much as 100% of the total package), and that is reflected in the difference seen in the mix offered by each set. Flat Fee Director Compensation: 2012 Canada-U.S. Compensation CSSBI 100 Comparable U.S. (n = 23) (n = 285) US$220,000 $185,000 38% 61% 62% 39% Cash Equity 31

33 board compensation board chair compensation Board chair compensation increased slightly in 2012 > Overall, median total board chair compensation (for applicable CSSBI 100 board chairs) increased by 6% to $330,000 in The increase was above the 2% average growth for the last six years. > In 2012, 16 CSSBI 100 companies increased their board chair retainers by an average of $50,000. CSSBI 100 Median Total Board Chair Compensation ( ) CSSBI 100 Over $5 Billion $1 - $5 Billion (n=75) (n=41) (n=34) $310,000 24% $330,000 27% $367,000 27% $375,000 31% $260,000 19% $262,500 22% 76% 73% 73% 69% 81% 78% Cash Equity Canadian-U.S. board chair compensation was closer than comparable director compensation > The difference in median total board chair compensation for Canadian versus U.S. board chairs was significantly less than the gap between Canadian and U.S. directors; about $40,000 separated the Canadian and U.S. board chairs, while the spread (as shown on pg. 27) was close to $70,000 for the directors. Median Total Board Chair Compensation: 2012 Canada-U.S. Comparison CSSBI Comparable CSSBI Comparable CSSBI Comparable 100 U.S. 100 U.S. 100 U.S. (n=75) (n=131) (n=41) (n=77) (n=34) (n=54) US$415,000 US$370,000 $375,000 $330,000 24% 39% 27% 38% $262,500 US$290,000 22% 34% 76% 61% 73% 62% 78% 66% Overall Over $5 billion Cash Equity $1 - $5 billion Median of total compensation paid to CSSBI 100 board chairs as disclosed in each company s Information Circulars.

34 board compensation Flat fees for board chairs still the norm > In 2012, over three-quarters (79%) of all CSSBI 100 board chairs who were compensated for the role received a flat fee 16 for their services; the number of boards who followed the more simplified remuneration practice was only marginally higher compared to > Flat fees reflect the various dimensions of the work involved and, in this sense, can be thought of as a dedicated salary for the leader of the board. The role is demanding, requiring a significant time commitment. Flat Fee Compensation for CSSBI 100 Board Chairs in 2012 (n=59) Non-Flat Fee Compensation for CSSBI 100 Board Chairs in 2012 (n=16) $1-5 Billion Over $5 Billion $1-5 Billion Over $5 Billion At a Glance 2012 CSSBI 100 Board Chair Compensation Practices 75 board chairs were compensated for the role. 59 received a flat fee. 16 received a mix of retainers and meeting fees. 37 board chairs received equity grants that were about double the value of those given to non-executive directors. 16 Flat fees included board and committee meeting fees. 33

35 board compensation Flat versus non-flat board chair fees similar, differences in the cash-equity mix > Overall, median board chair compensation via flat fees was slightly higher, but there were large differences in the mix of cash and equity that was granted. > Many of the flat fee packages were offered entirely in cash, resulting in a significantly lower equity portion compared to the non-flat fee group CSSBI 100 Median Total Board Chair Compensation Flat Fee Non-Flat Fee (n=59) (n=16) $340,000 $336,000 24% 42% 76% 58% Cash Equity LEAD Director Compensation Lead directors earned extra, additional compensation varied widely > Thirty-four CSSBI 100 companies had lead directors in Every lead director received additional compensation (either an extra retainer or a larger equity grant) for serving in this board leadership role. > The value of this extra amount ranged from $8,000 to $200,000. committee chair compensation Committee chair retainers generally flat, recent uptick for human resources & compensation committee chairs > Overall, committee chair retainers have been generally flat since 2008 (in the constant set of CSSBI 100 companies). > Median audit committee chair retainers continued to be significantly higher overall, but the gap narrowed as more CSSBI 100 boards started to pay higher, differential retainers to their human resources & compensation committee chairs. 34

36 board compensation Median Committee Chair Retainers in the Constant Group of 73 CSSBI 100 companies ( ) $20,000 $15,000 $10,000 $5,000 $15,000 $16,000 $7,500 $7,750 $7,500 $7,750 $20,000 $20,000 $20,000 $9,750 $10,000 $10,000 $9,750 $10,000 $10,000 $20,000 $12,000 $12,000 $20,000 $14,000 $12,000 $0 Audit Committee Chairs Human Resources & Compensation Committee Chairs Committee Chairs Overall Big jump in Canadian boards paying more to human resources & compensation committee chairs > The number of CSSBI 100 boards offering higher, differential retainers to the chairs of their human resources & compensation committee chairs more than doubled in one year. In 2012, 29 CSSBI 100 boards followed the pay practice, while 13 did in 2011; the difference was a median of $5,000 extra compared to all other committees (excluding audit) or $17,000 in total remuneration for the boards that followed the pay practice. > This practice was more common amongst comparable U.S. firms, where about half (187 of 402) of applicable firms provided their human resources & compensation committee chairs with a higher differential retainer (US$5,000 more, on a median basis). > The higher retainers reflect the added work, complexity and risk associated with the development and validation of CEO and senior management compensation plans at CSSBI 100 companies, and follows the same practice that has been applied, almost universally in the CSSBI 100, for audit committee chairs. CSSBI 100 Boards Offering Higher Retainers to Audit Committee and HRCC Chairs % 74% 78% 85% 86% 86% 90% 92% 51% 26% 29% 8% 5% 7% 9% 9% 13% Audit Committee Chairs Human Resources & Compensation Committee Chairs 35

37 board compensation Canadian and U.S. audit committee and human resources & compensation committee chair retainers nearly at par > Overall, median audit committee and human resources & compensation committee chair retainers for the CSSBI 100 and comparable U.S. companies were roughly the same. Median Committee Chair Retainers: 2012 Canada-U.S. Comparison Audit Human Resources & Committee Compensation Committee Chairs Chairs $20,000 US$20,000 $14,000 US$15,000 CSSBI 100 Comparable U.S. travel allowances Additional travel allowances given conditionally > Over two-thirds (69%) of CSSBI 100 companies disclosed that they provided supplemental travel fees to their directors. 17 > Forty-one of those CSSBI 100 companies provided the terms and dollar amounts related to their travel policies. The vast majority of companies offered travel allowances conditionally (e.g. only granted to non-canadian resident directors; when meetings were held outside the province or state of the director s residence; or when travel exceeded a certain distance or time). > The supplemental fees ranged from $500 to $5,000 on a per meeting basis to annual total payments that ranged from $10,000 to $35,000. As would be expected, the higher amounts were applied to lengthy (intercontinental) round trips and directors living outside of Canada. > These allowances were consistent with those offered in previous years Based on the 89 CSSBI 100 companies that disclosed details of their travel reimbursement policies in their Information Circulars.

38 Board Organization, Process and Policies 2012 CSSBI

39 board organization, process and policies 2012 BOARD ORGANIZATION, PROCESS AND POLICIES HIGHLIGHTS > Separate, standing risk management committees were uncommon in both Canada and the U.S. > One-third of CSSBI 100 boards used a combined peer and self assessment process to evaluate their directors in 2012, a modest increase over the previous year. > Formal assessments of individual directors were three times higher amongst CSSBI 100 boards versus the comparable set of U.S. firms in > Almost two-thirds (59%) of CSSBI 100 companies voluntarily agreed to stage a say on pay vote, more than triple the number in BOARD COMMITTEES Number of standing committees unchanged > Comparable U.S. firms have a wider distribution of committees than do CSSBI 100 boards. Standing Committees of the Board: 2012 Canada-U.S. Comparison CSSBI 100 Median: 4 48% Comparable U.S. Median: 4 (n=434) 32% 33% 23% 21% 16% 11% 6% 5% 2% 1% 2% Number of Standing Committees per Board 38

40 board organization, process and policies Separate Risk committees still uncommon on both sides of the border > Despite the heightened concerns around risk, separate, standing risk management committees were uncommon in both Canada and the U.S. Seven out of the nine CSSBI 100 companies that had them were financial institutions; by contrast, among the comparable U.S. firms with separate risk management committees, just under one-third (or 10 of 31) were not financial institutions. > In Canada and the U.S., risk management issues were most commonly handled by the board's audit committee. A smaller number of boards assigned risk management to the conduct, governance and social responsibility committees. Committee Distribution Committee 2012 CSSBI 100 Comparable U.S. Audit 100% 100% Nominating & Governance 99% 99% Human Resources & Compensation 98% 100% Environment, Health & Safety 40% 7% Pension/Investment 17% 3% Executive 14% 35% Risk Management 9% 8% Finance 13% 33% Conduct Review 8% 0% Social Responsibility/Public Policy 5% 12% Strategy/Planning 4% 3% BOARD AND COMMITTEE MEETINGS Canadian boards continued to meet more frequently than their U.S. counterparts > Overall, CSSBI 100 boards met an average of nine times in 2011 (the most recent year for disclosure), one more meeting than the comparable U.S. firms. The Canadian average has remained consistent over the past five years. > For CSSBI 100 boards, the number of board meetings ranged from four to 20; for the comparable U.S. firms, board meetings ranged from one to 26. The companies at the high end of the range tended to be involved in complex mergers, acquisitions and/or restructurings, requiring the scheduling of extra board meetings. > CSSBI 100 companies held comparably more meetings in the eight to nine and 10 to 13 range, while U.S. boards held comparably more meetings in the two to five range. The differences have remained consistent over the past two years. 39

41 board organization, process and policies Number of Board Meetings: 2011 Canada-U.S. Comparison CSSBI 100 Comparable U.S Average: 9 Average: 8 (n=434) 25% 29% 26% 21% 30% 22% 20% 8% 12% 8% Number of Board Meetings Held in but Canadian committees held fewer meetings, heavier scrutiny south of the border a factor > Overall, CSSBI 100 board committees tended to meet less often (two meetings less on average) than those of comparable U.S firms. > The largest difference was seen in the higher number of audit committee meetings held by comparable U.S. boards (consistently an average of three more meetings per year). > By comparison, U.S. boards have faced more heightened scrutiny and regulation, likely translating into a higher number of meetings for their core committees. Committee Meetings: Canada-U.S. Comparison (2005 versus 2011) CSSBI 100 Comparable U.S. CSSBI 100 Comparable U.S Nominating & Governance Committee Human Resources & Compensation Committee Audit Committee 40

42 board organization, process and policies DIRECTOR ATTENDANCE Near perfect attendance at board and committee meetings > Average individual attendance (either in person or via teleconference) at CSSBI 100 boards and committee meetings in 2011 was nearly perfect. Average CSSBI 100 Director Attendance in 2011 Board Audit Nominating & Human Resources & Meetings Committee Governance Compensation Meetings Committee Committee Meetings Meetings 97% 97% 97% 97% BOARD PERFORMANCE evaluations Boards striving for better performance through evaluations > Every CSSBI 100 board evaluated the performance of their individual directors, committees and the board overall. > Thirty % of CSSBI 100 companies disclosed a formal evaluation process for their committee chairs, in addition to the director evaluation. > Fifty-two % of CSSBI 100 companies disclosed that they had a formal evaluation process for the board chair. The most common method of assessment was a self-evaluation survey or questionnaire. A sizable number (19%) of companies supplemented this with a peer review. Performance Evaluations at CSSBI 100 Companies ( ) Individual Board Entire Directors Committees Board 86% 98% 100% 89% 97% 100% 93% 100%

43 board organization, process and policies Peer and self assessments common for directors, board chairs often involved > Based on company disclosure, peer and self assessment were the most common method of assessing director performance, with the vast majority (85%) of CSSBI 100 companies applying the methods in some form. > One-third of CSSBI 100 companies used a combined peer and self assessment process in 2012, a modest increase over the previous year. > One-third of director evaluations (excluding the small number of director evaluations that were based only on a meeting with the board chair) were supplemented by a one-on-one review with the board chair. Methods Used to Evaluate the Performance of CSSBI 100 Directors in 2012 Only Only Peer Survey/ Only Undisclosed Peer Self and Self Questionnaire Meeting with Review Evaluation Evaluation Board Chair 30% 33% 22% 19% 36% supplemented by one-onone review with the board chair 2% 1% Canadian boards still ahead of the U.S. on director assessments > While full board evaluations have been fully embraced on both sides of the border, formal assessments of individual directors (based on company disclosures) were three times higher amongst CSSBI 100 boards versus the comparable set of U.S. firms in > The presence of a separate board chair to monitor and encourage the performance of directors (independent of management) is a possible reason for the difference. Board, Committee and Director Assessments: 2012 Canada-U.S. Comparison Full Board Committees Individual Directors 100% 100% 100% 82% 100% 36% CSSBI 100 Comparable U.S. 42

44 board organization, process and policies CONTINUING DIRECTOR EDUCATION Boards committed to director education, site visits way up > All CSSBI 100 companies reported that they offered some form of continuing education to directors in the past year. Boards relied mostly on senior management and external experts to enhance their directors understanding of the company s industry. > Over half (53%) of CSSBI 100 companies reported having site visits as part of ongoing director education, a significant increase over the 11% reported in This large increase may be attributed to improved disclosure. Continuing Education for CSSBI 100 Directors in 2012 Seminars led by Site Seminars led by Board-led Other management Visits external experts seminars 90% 53% 50% 14% 10% Boards becoming more transparent on continuing education > In 2012, CSSBI 100 companies started to provide enhanced disclosure regarding the education programs offered to their directors. > Companies are now disclosing the specifics of continuing education programmes for directors, including who led the seminars (e.g. management, external experts, etc.), the topics of discussion, the individual directors (or committees) in attendance, as well as the dates and times of the actual sessions. > CSSBI 100 companies offered seminars on a broad range of topics. Industry-specific sessions dominated, while modules on strategy, financials, executive compensation and risk management were all frequently delivered in the past year. Director Education Programmes Offered by CSSBI 100 Boards in 2012 Industry Financials Corporate Corporate Risk Executive Other Specific Strategy Governance Management Compensation 71% 61% 51% 50% 28% 18% 35% 43

45 board organization, process and policies MAJORITY VOTING FOR NON-EXECUTIVE DIRECTORS Getting on with a majority > In line with corporate governance best practices, more than three-quarters (84%) of CSSBI 100 companies adopted majority voting procedures for director elections 18 - the same proportion as comparable U.S. firms. SAY ON PAY POLICIES Say on pay momentum continued > As of the end of November 2012, a majority (59%) of CSSBI 100 companies voluntarily agreed to stage a say on pay vote, 19 more than triple the number in Say on pay refers to an advisory (nonbinding) shareholder vote on a particular company s plan for executive compensation. > Internationally, the U.K. has had mandatory advisory votes for the past nine years, while the U.S. made them mandatory in Number of CSSBI 100 Boards that have Adopted Say on Pay Votes ( ) Sources include Information Circulars of CSSBI 100 companies and an index compiled by the Canadian Coalition for Good Governance ( 19 Shareholder Association for Research Education (

46 board organization, process and policies DIRECTOR RETIREMENT POLICIES Director retirement not always mandatory in Canada, much more common in the U.S. > Over half (57%) of all CSSBI 100 boards had mandatory retirement policies (i.e. ages and/or term limits) in place for their directors in When disclosed, retirement ages for directors ranged from 70-75, with the vast majority (77%) being set at either 70 or 72. Term limits, when disclosed, ranged from seven to 15 years of consecutive board service before a director must retire from the board. > In the U.S., mandatory director retirement policies were much more prevalent, with close to three-quarters (73%) of comparable U.S. firms having them for their directors. When disclosed, retirement ages in the U.S. ranged from 70 to 80, with almost three-quarters (74%) being from 70 to 73 years. Mandatory Retirement For Directors Range of Retirement Ages CSSBI % 70 to 75 Comparable U.S. 73% 70 to 80 > Thirty-eight CSSBI 100 boards did not have a mandatory retirement policy in place. Many boards do not want to be locked in, and are concerned with losing a highly valued director because he/she has reached an age or term limit. > Some CSSBI 100 companies have decided to remove their mandatory retirement age for such reasons, which puts an emphasis on the board chair having effective discussions with directors regarding their performance. Others will deal with directors who reach a mandatory retirement on a case-by-case basis, making rare extensions of a term when it is in the company's best interest to retain them. > At one CSSBI 100 board, for example, when a director does not serve his/her 10 year term by the time he/she reaches the mandatory retirement age of 70, the board has the discretion to make a one-time decision to extend the director s service until the earlier of the end of his/her 10 year term or age 75. This is subject to solid annual performance assessments and annual re-election by the shareholders. RESTRICTIONS ON OUTSIDE BOARD SERVICE Formal limits less common in Canada > The vast majority of CSSBI 100 boards (83%) did not formally limit the number of concurrent boards on which their directors could serve. > In the U.S., by comparison, formal limits were significantly more common. Fifty-nine % of comparable U.S. boards imposed a cap, mostly at three to four boards. 20 Based on the 86 CSSBI 100 boards for which we were able to confirm the use of mandatory director retirement policies. 45

47 board organization, process and policies share ownership requirements Minimum share ownership a must for nearly all directors > For shareholder alignment, almost all (97%) CSSBI 100 boards have instituted minimum share ownership requirements for their directors, compared to 87% of comparable U.S. firms. The vast majority of these requirements were mandatory. > Each board has specified the type (common shares, DSUs/RSUs), the amount a director must hold (most commonly three times the retainer value), and the time to reach the goal (most commonly five years). > Among CSSBI 100 boards with minimum share ownership requirements, 85% of current directors met the applicable thresholds. 21 Minimum Share Ownership Guidelines at CSSBI 100 Companies (2006 versus 2012) Equal to retainer value 9% 6% Two times the retainer value 25% 9% Three times the retainer value 33% 49% Four times the retainer value 12% 12% Five times the retainer value 17% 16% Six times the retainer value 4% 4% Eight times the retainer value 0% 1% equity in exchange for directors cash compensation Large number of companies offered equity in lieu of cash, one-third of directors chose it > Eighty-six % of CSSBI 100 boards gave their directors the option to receive equity instead of their cash compensation. Overall, 34% of non-executive CSSBI 100 directors exercised this option for at least a portion of their cash compensation, based on most recent company disclosures. CSSBI 100 Directors Electing Equity Instead of Cash 34% 66% % of Directors that Elected to Receive Equity % of Directors that did not Elect to Receive Equity As of the date of CSSBI 100 Information Circulars, filed between December 2011 and August 2012.

48 board organization, process and policies > Among the directors who did exercise the option, half decided to take 100% of their cash compensation in equity. CSSBI 100 Directors Electing Equity Instead of Cash <25% 25%-49% 50%-74% 75%-99% 100% in Equity in Equity in Equity in Equity in Equity 50% 25% 4% 13% 8% STOCK OPTIONS FOR DIRECTORS Stock options rarely granted in Canada, still common in U.S. > Most CSSBI 100 companies have stopped using stock options as a form of non-executive director compensation. Out of the 14 CSSBI 100 companies that maintained stock option plans for directors, only seven actually granted options to directors. The fair market value of the options granted ranged from an estimated $26,000 to $105,000. > In the U.S., by contrast, a sizable portion (41%) of the comparable U.S. firms with option plans (121 out of 434 companies) still granted options to their directors last year (the fair market value of the options ranged from US$10,000 to US$240,000). This is a noticeable decline over previous years, in which over half of comparable U.S. companies granted stock options. 47

49 board organization, process and policies value of independent director shareholdings A typical director has acquired close to $1 million in company shares, mostly DSUs > The median value of total equity held by an average CSSBI 100 director (or one with eight years of tenure) was $990, Roughly three-quarters of the value was in DSUs. Median Equity Holdings of the Average CSSBI 100 Director (tenure: 8 years) Median Total Equity $990,000 $258,000 26% $732,000 74% DSUs Common Shares Median Dollar Value of Equity Held by CSSBI 100 Directors (By Tenure) Over Years Years Years Years Years Years $2,100 $2,050 $000's $1,560 $1,700 $1,500 $1,200 $1,050 $1,000 $660 $550 $225 $ Calculation is based on figures provided by the CSSBI 100 companies in their Information Circulars, dated between December 2011 and August The value of director shareholdings was generally based on the company s closing share price as of the date of each Information Circular.

50 Appendices

51 comparative board data, 2012 cssbi 100 companies Number of Directors (a) Terms and Conditions age & Tenure Separate Number Number Term Board Service Average Average Age Chair and Not of of Length Majority Limits/Mandatory Director Tenure of Directors Company Name CEO? Total Independent International Women (Years) Voting Retirement Age (years) (years) (b) Aecon Group Inc. No Yes No Agnico-Eagle Mines Ltd. Yes Yes No 9 65 Agrium Inc. Yes Yes AIMIA Inc. Yes Yes Air Canada Yes Yes Alimentation Couche-Tard Inc. Yes No No ATCO Ltd. No Yes Bank of Montreal Yes Yes Bank of Nova Scotia, The Yes Yes 70/15 years Barrick Gold Corporation Yes Yes BCE Inc. Yes Yes No 5 63 Bombardier Inc. Yes Yes Brookfield Asset Management Inc. Yes Yes N/avail CAE Inc. Yes Yes No Cameco Corporation Yes Yes Canadian Imperial Bank of Commerce Yes Yes 15 years 6 55 Canadian National Railway Company Yes Yes Canadian Natural Resources Ltd. Yes Yes Canadian Pacific Railway Ltd. Yes Yes Canadian Tire Corporation Ltd. Yes Yes No 8 63 Canfor Corporation Yes No No Cascades Inc. Yes No N/avail CCL Industries Inc. Yes No No 9 62 Celestica Inc. Yes Yes Cenovus Energy Inc. Yes Yes No 3 65 CGI Group Inc. Yes Yes No Cogeco Cable Inc. Yes Yes No Domtar Corporation Yes Yes Dorel Industries Inc. Yes No No Emera Inc. No Yes Empire Company Ltd. Yes Yes Enbridge Inc. Yes Yes EnCana Corporation Yes Yes Footnotes for Column Headings: N/A: Non-applicable. a: Board composition as of November b: Mandatory director retirement ages and/or service limits (in years) as disclosed by each company; "N/avail" indicates that details of policy could not be confirmed. c: Total number of board meetings, including those held by teleconference in

52 comparative board data, 2012 cssbi 100 companies Meetings and Committees Compensation Board Number of Compensation Board Chair Director Board Committee Chair Committee Committee Meetings Standing in Retainer $ Retainer $ Meeting Fee $ Compensation Meeting Fee $ Member Per Year (c) Committees USD (d,e) (d,e) (f,g) Fee $ (g,h) (g) Retainer $ (g) 11 3 N/A 178, ,500 12, ,500 4, ,999* 3 220,000 4 N/A 10,000 5 N/A N/A 5 4 * 340, , ,000 6, , , , , ,500 7, ,500 2, , , N/A 10, N/A 5, , , ,530 6, , , * 175, , , , ,500 N/A , , , , , , , , ,000 20, ,000 3, * N/A 200, N/A 15, N/A N/A , , N/A 40, N/A N/A 9 4 * 600, , N/A 10, N/A 5, * 353, , N/A 15, N/A N/A 10 4 * 225, , N/A 35,000 N/A 51 10, , , ,500 11, , , ,000* , ,000 25, , , * 470,000* , ,500 15, ,500 3, N/A 198, ,500 7, ,500 4, * 350, , , , ,500 3, , , , , , N/A , , ,000 10, , , N/A 51, ,500 2, , N/A 8 4 * N/A 79, , , , N/A ,000* , , , ,500 N/A ,600* , ,500 7, ,500 N/A 6 3 * N/A 75, ,500 10, ,500 2, , , ,500 7, ,500 3, * 300,000* , N/A , N/A 105 N/A N/A 60,000 1,500 10, ,500 3, ,000* , , , , , , , , , , , * 450, , N/A 10, N/A N/A 8 5 * 569,122* , ,517 7, ,517 N/A d: Figures include: flat fees, dedicated board chair retainers and regular director retainers, based on eligibility. * indicates that the board chair receives committee retainers and/or committee meeting fees. e: Figures include compensation in equity, except where noted with +, which indicates that an additional share compensation applies. See applicable endnote. f: Many companies provide higher fees for extra travel, time or services undertaken by directors. These amounts are not reflected here. g: Includes committee member retainer and extra retainer for the committee chair role, where eligible. 51

53 comparative board data, 2012 cssbi 100 companies Number of Directors (a) Terms and Conditions age & Tenure Separate Number Number Term Board Service Average Average Age Chair and Not of of Length Majority Limits/Mandatory Director Tenure of Directors Company Name CEO? Total Independent International Women (Years) Voting Retirement Age (years) (years) (b) Ensign Energy Services Inc. Yes Yes Extendicare REIT Yes Yes N/avail Fairfax Financial Holdings Ltd. No No N/avail 8 68 Finning International Inc. Yes Yes Fortis Inc. Yes Yes 70/12 years 6 63 George Weston Ltd. No No No 9 61 Gildan Activewear Inc. Yes Yes Goldcorp Inc. Yes Yes No 6 64 Husky Energy Inc. Yes Yes No 8 65 Imperial Oil Ltd. Yes Yes Industrial Alliance Insurance and Financial Services Inc. No Yes Intact Financial Corporation Yes Yes Jean Coutu Group (PJC) Inc. Yes Yes N/avail Just Energy Group Inc. Yes Yes 75/15 years 9 63 Kinross Gold Corporation Yes Yes Linamar Corporation Yes No Magna International Inc. Yes Yes No 3 62 Manitoba Telecom Services Inc. Yes Yes Manulife Financial Corporation Yes Yes Maple Leaf Foods Inc. Yes Yes No 7 60 Methanex Corporation Yes Yes No 8 62 Metro Inc. Yes Yes National Bank of Canada Yes Yes 15 years 8 60 Nexen Inc. Yes Yes Onex Corporation Yes No Open Text Corporation No Yes No Parkland Fuel Corporation Yes Yes PennWest Petroleum Ltd. Yes Yes Potash Corporation of Saskatchewan Inc. Yes Yes Power Corporation of Canada No No No Progressive Waste Solutions Ltd. Yes No No 4 63 Quebecor Inc. No Yes No Research in Motion Ltd. Yes Yes N/avail 6 60 Footnotes for Column Headings: N/A: Non-applicable. a: Board composition as of November b: Mandatory director retirement ages and/or service limits (in years) as disclosed by each company; "N/avail" indicates that details of policy could not be confirmed. c: Total number of board meetings, including those held by teleconference in

54 comparative board data, 2012 cssbi 100 companies Meetings and Committees Compensation Board Number of Compensation Board Chair Director Board Committee Chair Committee Committee Meetings Standing in Retainer $ Retainer $ Meeting Fee $ Compensation Meeting Fee $ Member Per Year (c) Committees USD (d,e) (d,e) (f,g) Fee $ (g,h) (g) Retainer $ (g) 11 4 N/A 105, ,250 5, ,250 2, ,700* , ,000 5, ,000 N/A N/A 125, N/A 5, N/A N/A , , , , , , ,000* , ,500 15, ,500 N/A 12 4 N/A 100, ,000 10, ,000 4, , , ,500 9, ,500 N/A 7 4 1,170,485* , ,500 10, ,500 N/A 7 4 N/A 120, N/A 10, N/A 5, N/A 188, ,000 30, ,000 20, , , , , , , ,000* , , , , , , , , , , , N/A 65, , , , N/A , , N/A 45, N/A 15, N/A 31,500 1, , , , * 400,000* , , , , , , , N/A 20, N/A N/A 11 5 * 350, , ,000 10, ,500 5, , ,000 N/A 10, N/A 202 1, ,647* , ,500 7, , N/A , , , , , , ,000* , N/A 35, N/A 15, ,392* , ,800 7, ,800 5, N/A 217, ,000 10, ,000 4, N/A 45, N/A 14, N/A 8, ,700* , , , , N/A ,000* , ,500 7, ,500 N/A 8 4 * 360, , N/A 15,000 1, , , , ,000 15, ,000 5, , , N/A 10, N/A N/A , , ,000 8, , , , , N/A 10, N/A N/A d: Figures include: flat fees, dedicated board chair retainers and regular director retainers, based on eligibility. * indicates that the board chair receives committee retainers and/or committee meeting fees. e: Figures include compensation in equity, except where noted with +, which indicates that an additional share compensation applies. See applicable endnote. f: Many companies provide higher fees for extra travel, time or services undertaken by directors. These amounts are not reflected here. g: Includes committee member retainer and extra retainer for the committee chair role, where eligible. 53

55 comparative board data, 2012 cssbi 100 companies Number of Directors (a) Terms and Conditions age & Tenure Separate Number Number Term Board Service Average Average Age Chair and Not of of Length Majority Limits/Mandatory Director Tenure of Directors Company Name CEO? Total Independent International Women (Years) Voting Retirement Age (years) (years) (b) Resolute Forest Products Ltd. Yes Yes Rogers Communications Inc. Yes No No RONA Inc. Yes Yes No 6 58 Royal Bank of Canada Yes No 70/15 years 9 61 Russel Metals Inc. Yes Yes No 8 64 Saputo Inc. Yes Yes No 9 Shaw Communications Inc. No No No Sherritt International Corporation Yes Yes N/avail 5 65 Shoppers Drug Mart Corporation Yes Yes 72/15 years 5 59 SNC-Lavalin Group Inc. Yes Yes 72/15 years 7 63 Stantec Inc. Yes Yes Sun Life Financial Inc. Yes Yes 12 years 5 61 Suncor Energy Inc. No Yes Superior Plus Corporation Yes Yes Talisman Energy Inc. Yes Yes Teck Resources Ltd. Yes Yes TELUS Communications Inc. Yes Yes No 9 66 Tim Hortons Inc. Yes Yes No 5 63 Toromont Industries Ltd. No Yes Toronto-Dominion Bank, The Yes Yes 70/10 years 8 63 Torstar Corporation Yes No TransAlta Corporation Yes Yes Transat A.T. Inc. No Yes No TransCanada Corporation Yes Yes 70/7 years 6 63 Transcontinental Inc. Yes No No TransForce Inc. No Yes No 9 60 Uni-Sélect Inc. Yes Yes No Valeant Pharmaceuticals International Inc. No Yes No 3 52 Viterra Inc. Yes Yes No 5 62 Wajax Corporation Yes Yes West Fraser Timber Co. Ltd. No Yes WestJet Airlines Yes Yes No 7 62 Yamana Gold Inc. No Yes Yellow Media Inc. Yes Yes No 2 54 Footnotes for Column Headings: N/A: Non-applicable. a: Board composition as of November b: Mandatory director retirement ages and/or service limits (in years) as disclosed by each company; "N/avail" indicates that details of policy could not be confirmed. c: Total number of board meetings, including those held by teleconference in

56 comparative board data, 2012 cssbi 100 companies Meetings and Committees Compensation Board Number of Compensation Board Chair Director Board Committee Chair Committee Committee Meetings Standing in Retainer $ Retainer $ Meeting Fee $ Compensation Meeting Fee $ Member Per Year (c) Committees USD (d,e) (d,e) (f,g) Fee $ (g,h) (g) Retainer $ (g) , , N/A 15, N/A N/A , , , , , N/A , , , , , , , , N/A 10, N/A N/A , , ,000 6, , N/A 5 2 * 500, , ,500 7, ,500 3, N/A 127, ,500 10, ,500 3, N/A 50, , , , N/A , , N/A 10, N/A N/A ,000* , , , , N/A ,552* , ,800 9, ,800 N/A , , ,500 30,000 1,500 10, , , ,500 10, ,500 5, ,000* , ,500 14, , , * 500, , , , , , ,276* , ,500 14, ,500 6, ,000* , ,500 10, , , N/A 90, , , , , ,637* , ,000 10, ,000 5, , , N/A 25, N/A , * 275, , , , , , ,048* , ,500 15, ,500 N/A 11 4 N/A 50, , , , , ,000* , , ,000 1,500 5, N/A 45,000 1, , , , N/A 55,000 1, ,000 1, , , ,000 1,750 8, ,750 N/A , , N/A 15, N/A 10, * 375, , N/A 10, N/A N/A , , ,500 9, ,500 N/A 6 4 N/A 125, ,500 10, ,500 4, ,000* , N/A 8, N/A N/A 15 4 N/A 175, ,000 12, , N/A ,450* , N/A 11, N/A 374 5, d: Figures include: flat fees, dedicated board chair retainers and regular director retainers, based on eligibility. * indicates that the board chair receives committee retainers and/or committee meeting fees. e: Figures include compensation in equity, except where noted with +, which indicates that an additional share compensation applies. See applicable endnote. f: Many companies provide higher fees for extra travel, time or services undertaken by directors. These amounts are not reflected here. g: Includes committee member retainer and extra retainer for the committee chair role, where eligible. 55

57 notes for comparative board data 1 Includes $103,750 in stock options. 2 Includes committee member retainer. Audit Committee Chair receives $20, Includes director retainer and $99,999 in stock options. 4 Includes $100,000 in stock options. 5 Audit Committee Chair receives $25, Flat fee. Includes a minimum of US$85,000 in DSUs. 7 Includes US$40,000 in DSUs. 8 Audit Committee Chair receives US$18,500; Human Resources Committee Chair receives US$10, Audit Committee meeting fee is US$1, Flat fee. Includes $103,500 in DSUs. 11 Includes 1,500 DSUs ($19,406). 12 Audit Committee Chair receives $15,000. Human Resources and Compensation Committee Chair receives $10, Audit Committee members receive $5,000. Human Resources and Compensation Committee members receive $2, Flat fee. 15 Flat fee. 16 Audit, Finance and Risk Committee and Pension Committee Chairs receive $20, Audit, Finance and Risk Committee and Pension Committee members receive $10, Flat Fee. Chairman does not qualify under the DSU plan. 19 Must receive 50% of retainer in DSUs, with the option to receive the rest in DSUs as well. 20 Audit Committee Chair receives $ Audit Committee meeting fee is $2, Flat fee. 23 Includes US$40,000 in common shares until the minimum ownership requirement is met and US$20,000 in common shares thereafter. 24 US$800 for brief meetings and routine administrative matters. 25 Audit Committee Chair receives US$20, Audit Committee members receive US$7, Flat fee. Includes director retainer. 28 Includes $100,000 in DSUs, can elect up to 100% in this form. 29 $2,000 per meeting for each special Board meeting in excess of five per year. 30 Audit Committee Chair receives $40,000, Human Resources and Management Compensation Committee and Risk Review Committee Chairs receive $25,000. Governance and Nominating Committee Chair receives $20, $2,000 per meeting for each special Board meeting in excess of five per year. 32 $10,000 for each committee membership in excess of two. 33 Flat fee. $2,000 meeting attendance fee for board members including the Chair of the Board, for attending meetings with regulators, shareholders or shareholder activist groups. 34 Includes $90,000 in common shares or DSUs. 35 Audit and Conduct Review Committee Chair receives $40,000, Human Resources Committee and Executive and Risk Committee Chairs receive $25, Audit and Conduct Review Committee members receive $6, Flat fee. 55% of retainer is received in DSUs, can elect up to 100% in this form. 38 Audit Committee Chair receives US$25, Audit Committee members receive US$3, Flat fee. 41 Flat fee. Directors serving on one committee of the Board receive $160,000, Directors serving on two committees receive $175,000. Until the minimum share ownership level is attained, 100% of the compensation is mandatorily paid in DSUs. Once a director attains the minimum share ownership level, at least 50% of the compensation is mandatorily paid in DSUs. 42 Audit Committee and Management Resources and Compensation Committee Chairs receive $65, Flat fee. 44 Must take 100% of Director retainer in DSUs until minimum ownership met and can elect any amount thereafter. Independently from the foregoing, a director can elect to receive 50% or more of his/her meeting fees and committee retainer(s) in DSUs. 45 Audit Committee Chair receives $20, Flat Fee. 47 Flat fee. Must take 50% of Director retainer in DSUs until minimum ownership met and at least 25% in DSUs thereafter. 48 Audit Committee Chair receives US$25,273 (C$25,000). 49 Flat fee. 50 Must take 100% of Director retainer in DSUs until minimum ownership met and at least 50% in DSUs thereafter. 51 Each non-executive, non-chairman member of the Executive Committee is entitled to a fee of $1,000 per meeting, but no annual retainer. 52 Flat fee % of director fees paid in DSUs until the minimum ownership requirement is met. Directors can elect to receive 0%, 25%, 50%, 75%, or 100% in DSUs thereafter. 54 Audit Committee and Human Resources and Compensation Committee Chairs receive $25, Audit Committee members receive $2,000 per meeting. 56 Includes $225,000 common shares or DSUs. 57 Includes $70,000 in common shares or DSUs. 58 Audit Committee and Risk Management Committee Chairs receive $40, $1,000 for Strategic Planning Committee meetings (paid to all directors except for the Board Chair). 60 During fiscal 2008, a special committee was established to assess certain litigation matters. Committee members receive $25, Includes US$350,000 in common shares. 62 Includes US$175,000 in common shares. 63 Audit Committee and Human Resources and Compensation Committee Chairs receive US$25, Includes $158,470 in common shares. 65 Audit Committee Chair receives $15, Flat fee. Includes US$155,000 in DSUs. 67 Includes US$100,000 in DSUs. Directors are required to receive 100% of their long-term compensation in DSUs. Newly appointed directors receive an initial grant of $100,000 DSUs. 68 If meetings are scheduled over a two day period, directors receive a fee for each day. 69 Includes member retainer. Audit Committee Chair receives US$19, Audit Committee members receive US$7, Flat fee. Includes $24,000 in common shares or DSUs. 72 Includes $24,000 in common shares or DSUs. If minimum ownership requirement is not met, director receives at least $60,000 (50%) in common shares or DSUs. 73 $1,000 by telephone. 74 Audit Committee Chair receives $30,000. Management Resources and Compensation Committee Chair receives $17, $1,000 by telephone. Audit Committee members receive $2,750 per meeting, $1,375 by telephone. 76 Flat fee. Includes director retainer and 2,500 DSUs ($27,150). 77 Includes 2,500 DSUs ($27,150). Can elect to receive % of annual retainer in DSUs. 78 Includes member retainer. Audit Committee and Joint Capital Expenditures Committee Chairs receive $20, Joint Capital Expenditures Committee does not receive meeting fees. 80 Audit Committee and Joint Capital Expenditures Committee members receive $10, Includes $27,580 in DSUs. 82 Audit Committee Chair receives $10, $2,500 per meeting for the Audit Committee Chair. 84 Includes 1,250 DSUs (US$39,575). 85 US$1,000 by telephone. 86 Audit Committee Chair receives US$12, US$1,000 by telephone. 88 Includes $180,000 in DSUs. 89 Includes $120,000 in DSUs. Directors receive half their annual retainer and meeting fees in DSUs; can elect to receive 100% of fees in DSUs. 90 Attendance fees were paid per day, regardless of whether a director attends more than one meeting in a single day with the exception of Executive Committee meetings, which are paid separately even if they occur on the same day. 56

58 notes for comparative board data 91 Audit Committee Chair receives $20,000. The non-executive Chairman also serves as chair of the Governance Committee, for which no additional fee is paid. 92 Includes director retainer and 7,500 DSUs ($249,600). 93 Includes 7,500 DSUs ($249,600). 94 Audit Committee Chair receives $15, Includes US$25,000 in DSUs. Directors can elect to receive all or part of retainer as DSUs. For each DSU purchased with retainer fees, the directors receive two stock options. There is an annual grant of 4,000 options to directors, and an additional grant of 4,000 options to new directors. 96 Audit and Risk Management Committee receives US$12, Flat fee. 98 A director who serves on the Board of both Cogeco and the Corporation receives a lesser annual retainer from each entity in the amount of $25, Audit Committee Chair receives $15,000. Human Resources Chair receives $10, Audit Committee members receive $5,000. Human Resources members receive $4, Includes US$150,000 in DSUs. 102 Includes US$85,000 in DSUs. 103 There are generally no board or committee meeting fees, however, if more than 10 board meetings are held in a calendar year, directors are paid meeting fees of US$1,500 per additional meeting attended. 104 Audit Committee Chair receives US$40,000. Includes member retainer. Human Resources Committee Chair receives US$20, There are generally no board or committee meeting fees, however, if more than 10 board meetings are held in a calendar year, directors are paid meeting fees of US$1,500 per additional meeting attended. 106 Audit Committee members receive US$10, Audit Committee Chair receives $15, Audit Committee members receive $5, Includes $92,500 in DSUs. Additionally receives $35,000 cash for participation on the Board of Directors of Nova Scotia Power Inc. 110 Includes $40,000 in DSUs. 111 $1,250 by telephone. 112 Audit Committee and Management Resources and Compensation Committee Chairs receive $15, $1,250 by telephone. 114 Audit Committee members receive $5, Flat fee. 116 Directors must take 50% of their annual retainer in common shares or DSUs until the minimum ownership requirement is met. 117 $1,250 by telephone. 118 Audit Committee and Human Resources Committee Chairs receive $25, $1,250 by telephone. 120 Audit Committee members receive $5, Flat fee. Includes director retainer. Up to 50% cash, up to 50% stock equivalent and % DSUs before reaching minimum ownership requirement. If minimum ownership met, can elect to receive up to 75% cash, up to 75% stock equivalent and % in DSUs. Chairman received 75% in cash and 25% in equity. 122 Flat fee. Up to 50% cash, up to 50% stock equivalent and % DSUs before reaching minimum ownership requirement. If minimum ownership met, Directors can elect to receive up to 75% of retainer in cash and 25% in shares and DSUs. US residents paid in USD. 123 Audit Committee Chair receives US$25,000. Human Resources and Compensation Chair receives US$15, Includes 10,000 DSUs (US$286,042) and director retainer. 125 Includes 10,000 DSUs (US$286,042). 126 Audit Committee Chair receives US$15, Includes 4,000 DSUs ($65,800). 128 Audit Committee Chair receives $10, Includes $24,700 in REIT unit based awards and director retainer. 130 Includes $24,700 in REIT unit based awards. 131 Audit Committee Chair receives $25,000. Human Resources Committee and Governance and Nominating Committee Chairs receive $10, Audit Committee members receive $5, Flat fee. Directors who do not meet minimum ownership requirement must apply their annual retainer to purchase subordinate voting shares of Fairfax until satisfied. 134 Audit Committee Chair receives $10, Flat fee. Includes $105,000 in DSUs. 136 Includes $60,000 in DSUs. 137 $1,000 by telephone. 138 Includes member retainer. Audit Committee Chair receives $26, $1,000 by telephone. 140 Audit Committee members receive $6, Includes $60,000 in DSUs. 142 Includes $60,000 in DSUs. Directors can elect to receive the cash portion of their annual retainer in DSUs. 143 Audit Committee Chair receives $20, Directors can elect to receive up to 100% of compensation in DSUs and must receive at least 50% of compensation in DSUs until the minimum equity ownership requirement is met. 145 Audit Committee Chair receives $30,000. Governance Committee Chair receives $25,000. Environmental Committee Chair receives $15, Audit Committee members receive $5, Flat fee. Includes $100,000 in DSUs. 148 Includes $60,000 in DSUs. 149 Audit Committee Chair receives $20,000 ($5,000 paid in DSUs). Compensation Committee Chair receives $15,000. Corporate Governance Committee Chair receives $9, Includes 3,500 RSUs ($170,485). 151 Includes 3,500 RSUs ($170,485). 152 Audit Committee and Compensation Committee Chairs receive $20, Flat fee. 154 Audit Committee Chair receives $20, Audit Committee members receive $12, Includes 2,000 RSUs ($88,400). 157 Includes member retainer. 158 Flat fee. 159 Directors can elect to receive up to 100% of their compensation in DSUs. 160 $1,000 by telephone. 161 Includes member retainer. Audit Committee Chair receives $10,000. Human Resources Committee and Corporate Governance Committee Chairs receive $7, $1,000 by telephone. 163 Audit Committee members receive $5, Includes $60,000 in DSUs. 165 Includes $37,500 in DSUs. 166 $800 by telephone. 167 Audit Committee and Human Resources Committee Chairs receive $18, $800 by telephone. 169 Audit Committee and Human Resources Committee members receive $6, Flat fee. 171 Directors can elect to receive up to 100% of their compensation in DSUs. 172 $750 by telephone. 173 Audit Committee Chair receives $12, $750 by telephone. 175 Audit Committee members receive $3, Includes $15,000 in common shares or DSUs. Directors can elect to receive up to 100% of their compensation in equity. 177 $1,000 by telephone. $3,000 for Board strategy sessions. 178 Audit Committee Chair receives $15,000. Risk Committee Chair receives $10, $1,000 by telephone. 180 Audit Committee members receive $5, Flat fee. Includes director retainer. Must take 50% of annual retainer in DSUs. 182 Flat fee. At least 50% is paid in DSUs, except for directors residing in the U.S. 183 Includes member retainer. Audit and Risk Committee Chair receives $90, Audit Committee member receives $20, $630 by telephone. 186 Includes member retainer. 187 $630 by telephone. 188 Includes US$240,000 in DSUs. 189 Includes US$90,000 in DSUs. Directors receive a minimum of 60% 57

59 notes for comparative board data of their annual retainer in DSUs and a maximum of 40% in cash. 190 US$400 for written resolutions. US$4,000 for additional services per day. 191 Includes member retainer. Audit Committee, Corporate Governance Committee, Nominating Committee and Special Committee Chairs receive $50, US$400 for written resolutions. US$4,000 for additional services per day. 193 Flat fee. Includes $30,000 in DSUs. 194 Flat fee. Includes $30,000 in DSUs; Directors must receive 30% of their annual retainer in DSUs. 195 Audit Committee Chair receives $55, Flat fee. Can elect to receive 50% or 100% in DSUs. 197 Directors must take 50% of their annual compensation in DSUs until the minimum ownership requirement is met. They may elect to receive either 50% or 100% of the annual retainer in DSUs or common shares thereafter. 198 Includes member retainer. Audit Committee, Management Resources and Compensation Committee and Risk Committee Chairs receive US$38,000. Corporate Governance and Nominating Committee Chair receives US$25, Audit Committee, Management Resources and Compensation Committee and Risk Committee members receive US$8, Flat fee. 201 Audit Committee Chair receives $15, $1,500 per meeting for shareholder relations committee and for special/ad hoc committees. 203 Includes 5,600 RSUs or DSUs ($131,647). 204 Includes 3,700 RSUs or DSUs ($86,831). 205 Audit Committee Chair receives $17,500. Corporate Governance Committee Chair receives $12, $5,000 per meeting for Committee Chair. 207 Flat fee. Must take 25% of compensation in DSUs. 208 Annual retainer must be paid all in DSUs or 50% in shares until the minimum ownership requirement is met. Directors receive 25% of annual compensation in DSUs thereafter. 209 $875 by telephone. 210 Audit Committee Chair receives $10, $875 by telephone. 212 Audit Committee members receive $5, Includes $25,000 in common shares. 214 Includes $25,000 in common shares. 215 Committee Chair retainer includes $12,500 in shares. Audit Committee Chair receives $27,500 in cash and $17,500 in shares ($45,000 in total). 216 Committee member retainer includes $5,000 in shares. Audit Committee members receive $12,500 in cash and $7,500 in shares ($20,000 in total). 217 Includes 14,600 DSUs ($243,382). 218 Includes 6,600 DSUs ($110,022). 219 Includes member retainer. Audit Committee Chair receives $22, Includes 5,000 DSUs (US$182,850). 221 Audit Committee and Corporate Governance Committee Chairs receive US$15, Audit Committee and Corporate Governance Committee members receive US$7, Equity awards are made to non-management directors on a discretionary basis by the Board. 224 Includes member retainer. Audit Committee Chair receives $35,000. Compensation Committee Chair receives $25, Audit Committee members receive $25,000. Compensation Committee members receive $15, Includes $110,000 in DSUs. 227 Includes $55,000 in DSUs. 228 $1,000 by telephone. 229 Audit Committee Chair receives $15, $1,000 by telephone. Committee Chairs received $2,500 per regular meeting; $1,500 by telephone. 231 Chair must receive a minimu of 40% of the annual retainer in DSUs until the minimum ownership requirement is met. 232 Directors must receive a minimum of 40% of their annual retainer in DSUs until the minimum ownership requirement is met. 233 Audit Committee Chair receives $15, Flat fee. 235 Flat fee. 236 Board received per diem fees of US$1,500 for committee meetings held on days when no board meetings are held. 237 Flat fee. 238 Includes $50,000 in DSUs. 239 Audit Committee Chair receives $25, Audit Committee members receive $6, Flat fee. 242 Flat fee. Directors must take 50% of their annual compensation in DSUs, and may elect to receive any additional amount of their compensation, up to 100%, in DSUs. 243 Audit Committee Chair receives $20, Flat fee. 245 Directors must take 50% of their annual compensation in DSUs, and may elect to receive any additional amount of their compensation, up to 100%, in DSUs. 246 Audit Committee Chair receives $10, $3,000 for Audit Committee meetings. 248 Audit Committee members receive $4, Flat fee. Includes $100,000 in DSUs. 250 Flat fee. Minimum 50% paid in DSUs with Directors electing either cash or DSUs for remaining 50%. Each new director receives a onetime initial retainer of CDN $150,000 in the form of DSUs. 251 Audit and Risk Management Committee Chair receives $25,000. Compensation, Nominating and Governance Committee Chair receives $15, Flat fee. Includes director retainer, $75,000 in DSUs, and $100,000 in options. 253 Flat fee. Includes $75,000 in DSUs, and $100,000 in options. 254 Audit Committee Chair receives $25, Flat fee. Includes 4,000 DSUs ($141,240). 256 Includes $80,000 in DSUs. 257 $500 by telephone, if less than one hour. 258 Audit Committee Chair receives $30,000. Compensation Committee Chair receives $20, $2,000 per meeting for the Committee Chair. Audit Committee Chair receives $3,000 per meeting. 260 Flat fee. 261 Includes $13,000 in DSUs. 262 $750 by telephone. 263 Audit Committee Chair receives $10, $750 by telephone. 265 Audit Committee members receive $5, Flat fee. Includes $100,000 in common shares or DSUs. 267 Flat fee. Includes $100,000 in common shares or DSUs. 268 Audit Committee Chair receives $50,000. Conduct Review and Risk Policy Committee and Human Resources Committee Chairs receive $25, Flat fee. Includes $30,000 in DSUs. 270 Includes $30,000 in DSUs. Non-Canadian residents paid in USD. 271 Audit Committee Chair receives $12,000. Management Resources and Compensation Committee Chair receives $8, $1,000 advisory fee payable per day for special assignments. 273 Flat fee. 274 Additionally receive 2,000 DSUs. Directors must take annual compensation entirely in DSUs until the minimum ownership requirement is met. 275 Audit Committee Chair receives US$10,000 and 1,000 DSUs. 276 Audit Committee members receive US$4, Includes 3,000 DSUs ($62,805). Non-Canadian residents paid in USD. 278 Audit Committee Chair receives $40, Directors receive compensation entirely in DSUs. In addition to total compensation, non-management Directors received $150,000 under the Helms-Burton Allowance. 280 $1,000 by telephone. 281 Audit Committee and Human Resources Committee Chairs receive $15, $1,000 by telephone. $2,000 for each committee meeting attended to a maximum of $4,000 payable in a 2 day period. 283 Flat fee. Includes director retainer and $60,000 in DSUs. 284 Flat fee. Includes $60,000 in DSUs. 58

60 notes for comparative board data 285 Payable quarterly. Audit Committee and Human Resources and Compensation Committee Chairs receive $25, Includes $86,000 in DSUs. 287 Includes $86,000 in DSUs. 288 $625 by telephone. 289 Audit Committee Chair receives $16, $625 by telephone. $2250 for Audit Committee meetings; $925 by telephone. 291 Includes $86,552 in DSUs. 292 Directors receive compensation entirely in DSUs. 293 Paid quarterly. Audit Committee Chair receives $12, Flat fee. Includes $55,000 in DSUs. 295 Includes $55,000 in DSUs. 296 Flat Fee. Includes $280,000 in DSUs. 297 Includes $180,000 in DSUs. 298 Audit Committee Chair receives $25,000. Human Resources and Compensation Committee Chair receives $15, Audit Committee members receive $6, Includes $100,000 in DSUs. 301 Includes $40,000 in DSUs. 302 Includes member retainer. Audit Committee Chair receives $22, $2,000 per meeting for the Committee Chair. 304 Flat fee. Includes US$300,000 in DSUs. 305 Includes US$150,000 in DSUs. 306 US$800 by telephone. 307 Includes member retainer. Audit Committee Chair receives US$35, US$800 by telephone. 309 Audit Committee members receive US$10, Includes $300,276 in DSU/RSUs. 311 Includes $100,092 in DSU/RSUs. 312 Includes member retainer. Audit Committee Chair receives $26, Includes $235,000 in DSUs. 314 Includes $100,000 in DSUs. 315 Audit Committee Chair receives $20,000. Human Resources and Compensation Chair receives $15, Audit Committee members receive $3,000 per meeting. 317 Audit Committee members receive $10, Includes $60,000 in DSUs until the minimum ownership requirement is met. 319 $750 by telephone. 320 Audit Committee Chair receives $15,000. Compensation Committee Chair receives $12, $750 by telephone. 322 Includes $26,637 in options. 323 Includes $26,637 in options. 324 Audit Committee Chair receives $20,000. Human Resources and Compensation Chair receives $12, Flat fee. Includes $150,000 in DSUs. 326 Flat fee. Includes $90,000 in DSUs. Minimum of 60% of fees (excluding equity grant) payable in DSUs or shares until ownership requirement is met. 327 Audit Committee Chair receives $40, Non-employee directors (excluding the Chairman) receive an additional $1,500 for each special meeting in excess of five special board or committee meetings held during the fiscal year. The Audit Committee Chair will receive an additional fee of $5,000 (members will receive $2,500) for attending a meeting to review and recommend the annual financial statements of the bank s federally regulated financial institution subsidiaries and insurance subsidiaries for approval by their respective board of directors. 329 Committee member retainer only payable to directors holding more than one committee membership. 330 Flat fee. Includes $35,000 in DSUs. 331 Includes US$35,000 in DSUs. Canadian directors paid in CAD, U.S. Directors paid in USD. 332 US$750 by phone. Directors are entitled to a fee of US$1,500 per day for speical attendance at and advice to the Corporation as authorized by the Chairman. 333 Audit Committee Chair receives US$15, US$625 by phone. Directors are entitled to a fee of US$1,500 per day for speical attendance at and advice to the Corporation as authorized by the Chairman. 335 Includes 3,200 DSUs ($67,408). 336 Includes 3,200 DSUs ($67,408). 337 Audit and Risk Committee and Human Resources and Compensation Committee Chairs receive $25, Paid quarterly. Includes $15,000 in DSUs. 339 $1,000 by telephone. 340 Audit Committee Chair receives $15, $1,000 by telephone. 342 Audit Committee members receive $5, Includes $230,000 in DSUs. 344 Includes $85,000 in DSUs. U.S. residents receive the same amount in USD. 345 $3,000 per meeting for the Board Chair. 346 $1,000 by telephone. 347 Audit Committee and Human Resources Committee Chairs receive $10, $1,000 by telephone. 349 $850 by telephone. 350 $850 by telephone. $2,500 per meeting for the Committee Chair (in person), $850 by telephone. 351 Flat fee. 352 Audit Committee Chair receives $12, Flat fee. Includes director retainer, $400,000 in DSUs. 354 Flat fee. Includes $220,000 in DSUs. 355 Paid quarterly. Audit and Risk Committee Chair receives $50,000. Talent and Compensation Committee, Operations Committee, and Finance and Transactions Committee Chairs receive $20, Paid quarterly. Audit and Risk Committee, Operations Committee, Talent and Compensation Committee, and Finance and Transaction Committee members receive $12, Flat fee. 50% must be taken in DSUs until the minimum shareholding requirement is met. 358 Flat fee. 50% must be taken in DSUs until the minimum shareholding requirement is met. 359 Audit Committee Chair receives $20,000. Compensation Committee Chair receives $15, Flat fee. Includes $87,500 in DSUs. 361 Includes $30,000 in DSUs. 362 Audit Committee Chair receives $15,000. Human Resources and Compensation Committee Chair receives $12, Includes $75,000 in DSUs. 364 Includes member retainer. 365 Includes $300,000 in common shares or DSUs. 366 Flat fee. 25% must be taken in DSUs until the minimum ownership requirement is met. 367 Audit Committee Chair receives $15, Includes $87,500 in DSUs. 369 Audit Committee and Compensation Committee Chairs receive $20, $1,750 per meeting for members of the Governance Committee and Sustainability Committee (the Committee Chair receives $1,500 per meeting). $2,250 per meeting for members of the Audit Committee and Compensation Committee (the Committee Chair receives $2,000 per meeting). 371 Includes $37,450 in RSUs. 372 Flat fee. Includes $18,725 in RSUs. 373 Audit Committee Chair receives $20,000. Financing Committee Chair receives $50, $1,500 per meeting for the Finance Committee. $1,000 for telephone meetings. 375 Audit Committee members receive $8,250. Financing Committee members receive $30,

61 2012 canadian spencer stuart board analysis METHODOLOGICAL NOTES Spencer Stuart s CSSBI 100 is a group of leading, publicly-traded Canadian headquartered companies, selected from a broad range of sectors. All the companies met the following inclusion criteria: > generated at least $1 billion in revenue in its most recent fiscal year; > have Canadian operations; > at least 30% of its board directors are resident Canadians. To make appropriate comparisons, we grouped the companies into two categories based on revenue size: the 52 CSSBI 100 companies with revenues between $1 billion and $5 billion (referred to as the smaller CSSBI 100 ) and the 48 CSSBI 100 companies with revenues over $5 billion (referred to as the larger CSSBI 100 ). The data underpinning the results of the 2012 CSSBI were derived from the following sources: > Management Information Circulars (referred to as Information Circulars) Annual Information Forms and Annual Financial Statements, filed with SEDAR from December 2011 to August, 2012; > Spencer Stuart s proprietary U.S. Boards Database for our comparisons between the Canadian and 434 U.S. S&P 500 firms in the same revenue range (referred to as the comparable U.S. firms). Director Compensation: Throughout the CSSBI, we relied on medians for the analyses of director compensation across the CSSBI 100 and comparisons with the comparable U.S. firms. The portions of equity and cash that made up director retainers were estimated based on the percentages of each that were offered by the CSSBI 100 and comparable U.S. firms. All values appear in Canadian dollars unless otherwise noted. Equity Compensation: Our analyses included the dollar value of equity (common shares, deferred and restricted stock units DSUs and RSUs and stock options) granted to directors. When the equivalent dollar values of equity were not stated by the company (either in their Information Circulars or Annual Financial Statements), we valued the equity using the appropriate market price for the date on which the shares were granted; Black-Scholes was used to value options. Our approach has allowed us to present fullvalue analyses of director compensation, including all forms of applicable compensation. Changes in the CSSBI 100: Care was taken to ensure that reported trends were statistically valid by accounting for year-over-year (or overlap) changes in the composition of the CSSBI 100, referred to as the constant set of companies. Editor s Note: Spencer Stuart makes all reasonable and good faith efforts to verify and reference the source of the information contained in the CSSBI. However, we cannot guarantee that it is complete, accurate, or error-free. Therefore, the information contained in the CSSBI is provided without warranty, whether expressed or implied, of any kind. 60