Corporate Governance Policy
Stroud Resources Ltd. (“Stroud” or the “Company”) is committed to promoting ethical conduct in the operation of its business. The company understands that to be truly effective, its governance practices and ethical conduct must be embedded in the culture and operations of the Company. Policies and procedures have been adopted by the Board of Directors to ensure the integrity of Company performance. Stroud’s officers and employees are required to perform each of their duties with integrity, and in compliance with the rules which govern the Company’s business.
Mandate of Board
The Board of Directors is responsible for the stewardship of Stroud through the appropriate supervision of the business and management of the Company. The Board shall remain committed to ensuring the long-term viability and profitability of the Company, as well as the well-being of its employees and of the communities in which it operates. This mandate is accomplished directly and through its various committees including the Audit Committee, the Compensation Committee, the Corporate Governance and the Technical Committee.
The strategic planning and business objectives developed by Stroud’s management are submitted to and reviewed by the full Board of Directors, both on a formal annual basis and on an ongoing basis through regular interim reports from management. The full Board also reviews and approves the annual financial statements, annual report, annual budget, management proxy information circulars, material press releases, decisions as to material acquisitions not within the budget, and the grant of stock options.
The Board meets a minimum of four times a year and more frequently if required.
Independence from Management
Two of the Board’s four directors are “independent” within the meaning of applicable securities legislation. An independent director is defined to be a director who has no direct or indirect relationship with the Corporation which could, in the view of the Board, be reasonably expected to interfere with the exercise of a member’s independent judgment.
The Board is satisfied that it maintains adequate and appropriate independence from management. All directors, each of whom has considerable business experience, are expected and encouraged to exercise their independent judgment.
The Audit Committee is responsible to monitor the Company’s accounting and financial reporting processes and the systems in place to manage the principal operational risks faced by Stroud, including internal control and management information systems. This committee is responsible for reviewing and approving the interim consolidated financial statements and for reviewing and recommending the annual consolidated financial statements to the Board of Directors for approval. The Audit Committee is also responsible to renew and appraise the audit efforts of the Corporation’s external auditor.
The Compensation Committee reviews the performance, compensation and succession planning of the executive officers of Stroud and to ensure the proper administration of the Company’s Incentive Stock Option Plan.
The Corporate Governance Committee oversees all regulatory disclosure requirements and the Company’s disclosure practices, including its Insider Trading Policy. This committee is responsible to ensure that appropriate systems, processes and controls for disclosure are in place and to review all news releases and core disclosure documents before their release or filing.
The Technical Committee will assist management in identifying and reviewing any acquisitions, joint ventures or similar opportunities prior to review by the full board.
Evolution of Practices
Stroud’s corporate governance practices are subject to changes as the Company evolves. The Board shall remain sensitive to corporate governance issues and shall continuously seek to set up the necessary measures, control mechanisms and structures to ensure an effective discharge of its responsibilities without creating additional overhead costs and reducing the return on Shareholders’ equity. The Board of Directors recognizes that the Company’s existing corporate governance practices do not fully comply with all of the TSX Guidelines. The Board of Directors is committed to complying in all respects with the TSX Guidelines as the Company grows in size and when the TSX Guidelines become appropriate for Stroud to adopt entirely.