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OTL CORPORATE GOVERNANCE
Corporate governance refers to the policies and structure of the board of directors of a company, whose members are elected by and are accountable to the shareholders of the company. Corporate governance encourages establishing a reasonable degree of independence of the board of directors from executive management and the adoption of policies to ensure the board of directors recognizes the principles of good management. The Board of Oriental Minerals is committed to sound corporate governance practices, as such practices are both in the interests of shareholders and help to contribute to effective and efficient decision-making.
These practises include having a majority of independant directors, providing orientation and continuing education to board members, ensuring business is conducted ethically, carefully nominating new or replacement directors, ensure compensation is formally decided and regularly reviewed, establishing a Corporate Governance Committee and engaging in regular assessments of the board and management interaction and strategic direction.
Board of Directors
Directors are considered to be independent if they have no direct or indirect material relationship with the company. A "material relationship" is a relationship which could, in the view of the company's board of directors, be reasonably expected to interfere with the exercise of a director's independent judgment. The Company's Board facilitates its exercise of independent judgement in carrying out its responsibilities by carefully examining issues and consulting with outside counsel and other advisors in appropriate circumstances. Three-quarters of the Board is currently independent. The independent members of our Board are Damien Reynolds, Ian Fodie, William Kable, Malcolm Stevens, William Ramsay and Hein Poulus. The non-independent directors are William McLucas (our President and Chief Executive Officer) and Stephen Flechner (our previous President).
Orientation and Continuing Education
When new directors are appointed, they receive orientation, commensurate with their previous experience, on the Company's properties, business, the mining industry and on the responsibilities of directors. Board meetings may also include presentations by the Company's management and employees to give the directors additional insight into the Company's business.
Ethical Business Conduct
The Company's Board has found that the fiduciary duties placed on individual directors by the Company's governing corporate legislation and the common law and the restrictions placed by applicable corporate legislation on an individual directors' participation in decisions of the board in which the director has an interest have been sufficient to ensure that the board operates independently of management and in the best interests of the Company. Further, the Company's auditor has full and unrestricted access to the audit committee at all times to discuss the audit of the Company's financial statements and any related findings as to the integrity of the financial reporting process.
Nomination of Directors
The Company's Board considers its size each year when it considers the number of directors to recommend to the shareholders for election at the annual meeting of shareholders, taking into account the number required to carry out the Board's duties effectively and to maintain a diversity of views and experience. The Company's Board does not have a nominating committee, and these functions are currently performed by the Company's Board as a whole. However, if there is a change in the number of directors required by the Company, this policy will be reviewed.
Compensation
The Company's Board has a compensation committee, the members of which are Damien Reynolds, Ian Fodie and William Kable. The function of the compensation committee is to review, on an annual basis, the compensation paid to the Company's executive officers and to the directors, to review the performance and compensation paid to the Company's executive officers and to make recommendations on compensation to the Board. In addition, the Committee reviews annually the compensation plans for the Company's non-executive staff.
Other Board Committees
The Company also currently has a Corporate Governance Committee comprised of Damien Reynolds, Ian Fodie and Malcolm Stevens. The Company's Board has no other committees other than the audit committee, compensation committee and corporate governance committee.
Assessments
The Company's Board monitors the adequacy of information given to directors, communication between the Board and management and the strategic direction and processes of the Board and committees.
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