HomeMy WebLinkAboutCLD-027-13 Addendum 0arington REPORT
MUNICIPAL CLERK'S DEPARTMENT
Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Date: October 28, 2013 Resolution#: By-law#:
Report#: Addendum to File#:
Report CLD-027-13
Subject: NOMINATION PROCESS —VERIDIAN CORPORATION AND VERIDIAN
CONNECTIONS INC.
RECOMMENDATIONS:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Addendum to Report CLD-027-13 be received;
2. THAT Report CLD-027-13 be received;
3. THAT the procedure for nominations to and the replacement of directors on the
Veridian Corporation and the Veridian Connections Inc. Boards, as outlined in
Attachment No. 2 to Addendum to Report CLD-027-13, be approved; and
4. THAT all interested parties listed in Addendum to Report CLD-027-13 be advised
of Council's decision.
Submitted by: Reviewed by:
PZtti ar , CMO Franklin Wu,
M nicipal Clerk Chief Administrative Officer
PLB
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T 905-623-3379
REPORT NO.: Addendum to Report CLD-027-13 PAGE 2
1.0 BACKGROUND
At the General Purpose and Administration Committee meeting of October 7,
2013, Report CLD-027-13 was referred back to staff for a further report on a
procedure for the appointment or replacement of non-elected members to the
Veridian Corporation and Veridian Connections Inc. Boards, including the
process of split-terms of Council members. A copy of Report CLD-027-13 is
included with this report as Attachment No. 1.
2.0 SHAREHOLDERS' AGREEMENT
As stated in Report CLD-027-13, the Shareholders' Agreement (the Agreement)
between the Town of Ajax, the City of Pickering, the City of Belleville, Veridian
Corporation, Veridian Connections Inc. and the Municipality of Clarington dictates
that the Veridian Corporation Board consists of 14 directors, of which 3 are
nominated by the Municipality of Clarington. These 3 directors are to be the
Mayor or the Mayor's Designate, and members of Council provided that at least
one of the nominees is not a member of Council. Although not stated in the
Agreement, should it be Council's desire, the term for the member of Council
may be split such that one councillor serves for the first two years of the four-year
term and another councillor serves for the last two years of the four-year term.
In seeking applications for the non-elected position, Veridian places an
advertisement in the local newspapers and on the shareholders' websites.
These applicants are interviewed by a consultant and recommendations are
made to Veridian's Nominating Committee. Once the Nominating Committee
approves the consultant's recommendations, the Nominating Committee's
recommendation together with the resumes of all applicants, is forwarded to each
Shareholder for their nomination to be made.
The Agreement also addresses the issue of director replacement on the Veridian
Corporation Board, stating that any initial Shareholder may replace any director
nominated by it at any time during the term of the Agreement and shall nominate
a new member to the Board as appropriate to replace the removed member.
Once the Veridian Corporation Board is appointed, they make appointments to
the Board of Veridian Connections Inc., without requesting nominations from
each of the Shareholders.
More details related to these processes are contained in Report CLD-027-13,
attached.
REPORT NO.: Addendum to Report CLD-027-13 PAGE 3
3.0 CLARINGTON'S PROCESS OF APPOINTMENTS TO BOARDS AND
COMMITTEES
In 2011 the Municipal Clerk's Department submitted a report to the General
Purpose and Administration Committee with a detailed process of nominations
and voting for the members to sit on the various boards and committees that are
appointed by Council. In consideration of this matter, Council determined to keep
the appointment process as it had been in the past, ie, all applications forwarded
to Council and a motion coming forward to nominate the various individuals to be
voted on. It is recommended that this process remain for the nominations to the
Veridian Corporation Board and the Veridian Connections Inc. Board.
4.0 CONCURRENCE
This report has been reviewed by the Director of Corporate Services and the
Municipal Solicitor who concur with the recommendations.
5.0 CONCLUSION
Based on the process of nomination of members of the Veridian Corporation
Board specifically addressed in the Shareholders' Agreement and the information
contained in Report CLD-027-13, it is recommended that the process currently
being followed for the nominations to the Veridian Corporation Board remain
unchanged but that Council provide a recommendation for the nomination to the
Corporation Board for the Director to represent Clarington on the Veridian
Connections Inc. Board. A detailed procedure is included as Attachment No. 2.
The process for the replacement of directors is specified in Section 3.2 (c) of the
Agreement. The procedure attached hereto outlines the process which Council
will follow, in accordance with the Agreement, should it be necessary for a
director to be replaced.
CONFORMITY WITH STRATEGIC PLAN — Not Applicable
Staff Contact: Patti L. Barrie, Municipal Clerk
Attachments:
Attachment No. 1 — Report CLD-027-13
Attachment No. 2 — Procedure Re The Board of Directors of Veridian Corporation and
Veridian Connections Inc.
List of interested parties to be advised of Council's decision:
Veridian Corporation
Addendum to Report CLD-027-13
Attachment 1
CREPORT
MUNICIPAL CLERK'S DEPARTMENT
Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Date: October 7, 2013 Resolution#: By-law#:
Report#: CLD-027-13 File#:
Subject: NOMINATION PROCESS —VERIDIAN CORPORATION AND VERIDIAN
CONNECTIONS INC.
RECOMMENDATIONS:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report CLD-027-13 be received;
2. THAT the procedure for nominations to and the replacement of directors on the
Veridian Corporation and the Veridian Connections Inc. Boards, as outlined in
Attachment No. 1 to Report CLD-027-13, be approved; and
3. THAT all interested parties listed in Report CLD-027-13 be advised of Council's
decision.
*P.ar Submitted by; Reviewed by:MO Franklin Wu,
Chief Administrative Officer
PLB
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T 905-623-3379
REPORT NO.: CLD-027-13 PAGE 2
1.0 BACKGROUND
At the Council meeting held on April 15, 2013, the following recommendation of
the General Purpose and Administration Committee (GPA) was approved:
"WHEREAS the Municipality of Clarington is a shareholder of Veridian
Corporation Inc.;
AND WHEREAS Veridian Connections Inc. is a wholly owned subsidiary of
Veridian Corporation Inc.;
AND WHEREAS the Mayor of the Municipality of Clarington, one elected
representative from Clarington Council, and two non-elected representatives
have represented Clarington on the Boards of Veridian Corporation and
Veridian Connections Inc.;
AND WHEREAS the Veridian Connections Inc. Board of Directors is
appointed by the Veridian Corporation Inc. Board;
AND WHEREAS Veridian Corporation Inc. and Veridian Connections Inc.
need independent directors with experience in regulatory affairs, human
resources/executive compensation, legal, board governance, senior
management, and electrical utility distribution;
NOW THEREFORE BE IT RESOLVED:
THAT, for any future nominations for the Municipality of Clarington to the
Veridian Connections Inc. Board of Directors, one of the nominees from the
Municipality of Clarington shall be a non-elected resident of Clarington, which
nominee shall be voted on by the Council of the Municipality of Clarington in
an open and transparent process consistent with Clarington's process for the
appointment of community members to boards, and which nominee shall not
be the same person who is the non-elected director for Clarington on the
Veridian Corporation Inc. Board of Directors; and
THAT, for any future nominations for the council representative of the
Municipality of Clarington to the Veridian Connections Inc. Board of Directors,
in the event that the Mayor of the Municipality of Clarington does not sit on
the Board of Directors of Veridian Connections Inc., the nominee for the
Council representative position shall be the same member of the Council of
the Municipality of Clarington that was appointed to the Board of Directors of
Veridian Corporation Inc."
Subsequent to this resolution being passed, the following GPA recommendation
was approved on April 29, 2013:
REPORT NO.; CLD-027-13 PAGE 3
"THAT the Municipal Clerk be directed to prepare a procedure in accordance
with Resolution #GPA-239-13 for the open and transparent process for the
nomination by Council of a community member to the Veridian Corporation
Board, and the Veridian Connections Inc. Board, and any request by Council
for the removal of a community member from the Veridian Corporation Board,
and the Veridian Connections Inc. Board."
2.0 SHAREHOLDERS' AGREEMENT
2.1 Veridian Corporation Board of Directors
The Municipality of Clarington entered into a Shareholders' Agreement (the
Agreement) between the Town of Ajax, the City of Pickering, Veridian
Corporation and Veridian Connections Inc. in November 1999. In September
2001, Belleville Utilities merged with Veridian Corporation and the City of
Belleville became a party to the Agreement.
2.2 Shareholder Action
In accordance with section 3.2 (a) of the Agreement, each of the Shareholders
agrees to elect as members of the Veridian Corporation Board of Directors the
nominees put forward by each other Shareholder from time to time in accordance
with the provisions of the Agreement.
2,3 The Board and Subsidiary Boards
In accordance with the Agreement, section 3.2 (b), the business and affairs of
Veridian Corporation are managed or supervised by the Board which consists of
14 directors. The Municipality of Clarington shall nominate 3 of these directors.
Section 3.2 (d) states that each Shareholder shall nominate the Mayor or the
Mayor's Designate as one of the Shareholder's nominees to the Board, provided
that if the Mayor ceases to hold the office of Mayor, the appointing Shareholder
shall forthwith replace the Mayor or the Mayor's Designate, as applicable. Each
Shareholder shall nominate to the Board members rof its council provided that at
least one nominee of each Shareholder shall not be a member of council.
Qualifications of candidates for the Board shall, where possible, include the
following:
i) Business experience;
ii) Time availability;
iii) Financial skills;
iv) Marketing skills;
v) Industry knowledge;
vi) Independence of judgment;
vii) Integrity;
viii) Knowledge of public policy issues relating to the Corporations; and
REPORT NO.: CLD-027-13 PAGE 4
ix) Knowledge and experience concerning environmental matters, labour
relations and occupational health and safety issues.
2.4 Director Replacement
Section 3.2 (c) of the Agreement deals with replacing directors of the Veridian
Corporation Board and states that any initial Shareholder may replace any
director nominated by it at any time during the term of the Agreement and shall
nominate a new member to the Board as appropriate to replace the removed
member.
2.5 Nominating Committee
In accordance with Section 3.3 (b) of the Agreement, the Veridian Corporation
Board appoints members to the Nominating Committee whose purpose it is to
make recommendations to the Shareholders concerning candidates for the
Board and the compensation for members of the Board, the Chair, Vice-Chair
and Board Committee members and chairpersons.
2.6 Veridian Connections Inc. Board
Technically, the Municipality of Clarington has no authority to make any
nominations to the Veridian Connections Inc. Board. At the Inaugural meeting of
the Veridian Corporation Board, the Chair and Vice-Chair of the Board are
elected from the newly appointed directors and the Corporation Board makes its
appointments to the Board of Veridian Connections Inc. Clarington has never
made recommendations for nominations to the Board of Directors of Veridian
Connections Inc. Board.
3.0 NOMINATION PROCESS
The term for the Board, which has been determined by the Shareholders, is
consistent with the term of Council. In the fall of each election year, Veridian
places advertisements in the local newspapers and on the Shareholders'
websites seeking candidates to serve on the Board of Directors for Veridian
Corporation and Veridian Connections Inc. Resumes are forwarded directly to
Veridian.
In 2010, a consulting firm was engaged to interview interested candidates and
make recommendations to the Nominating Committee. Once approved by the
Nominating Committee, the recommendations were submitted to the various
Shareholders, with a request that each Shareholder make their nominations to
the Veridian Corporation Board of Directors, in accordance with the Agreement,
REPORT NO.: CLD-027-13 PAGE 5
Because of the notification deadline of mid-December, Clarington's nominations
to the Board are considered at the Inaugural Meeting of Council. The
recommendations of the Nomination Committee are distributed to all members of
Council, confidentially, for their consideration at that meeting.
4.0 OTHER SHAREHOLDERS
In discussion with the other municipal Shareholders (Ajax, Pickering and
Belleville) it has been determined that they follow the same process as
Clarington, with one exception. The Town of Ajax makes their nomination to the
Board of Directors for Veridian Corporation in the same manner in which
Clarington does, but they also provide a recommendation for their preferred
nomination for the Board of Veridian Connections Inc. This individual is chosen
from the recommendations of the Nominating Committee for the Veridian
Corporation Board. In providing this recommendation, Ajax is fully aware that the
Veridian Corporation Board makes the appointment to the Veridian Connections
Inc. Board and that they are not obligated, in any way, to approve the nomination
from the Town. The recommendations that have been put forward have,
however, always been appointed to the Veridian Connections Inc. Board by the
Corporation Board.
5.0 MUNICIPALITY OF CLARINGTON'S PROCESS OF BOARD/COMMITTEE
APPOINTMENTS
The Municipality appoints community members to a number of boards and
committees, for a term consistent with the term of Council. In the fall of an
election year, the Municipal Clerk's Department places an advertisement in the
local newspapers and on the Municipality's website seeking applications from
individuals interested in filling the positions on the various boards/committees.
Once received, the Municipal Clerk's Department prepares a report to the
General Purpose and Administration Committee (GPA), providing a listing of all
individuals who have applied and attaching their completed applications
confidentially. The report is considered during the public portion of the GPA
meeting. Should the members of Council wish to discuss specific qualifications
about an identifiable individual(s), they do so in closed session, in accordance
with the Municipal Act.
6.0 CONCURRENCE
This report has been reviewed by the Director of Corporate Services and the
Municipal Solicitor who concur with the recommendations.
REPORT NO.: CLD-027-13 PAGE 6
7.0 CONCLUSION
The process of nomination of members of the Veridian Corporation Board is
specifically addressed in the Shareholders' Agreement. This process is similar to
the Municipality of Clarington's process of appointments to boards/committees in
that an advertisement is placed seeking interested individuals and that the
nominations are considered by Council at an open meeting. The process differs
in that the applicants are interviewed, with recommendations being forwarded to
Council, and the fact that the Corporation Board makes the nomination to the
Veridian Connections Inc. Board, without input from Council. It is therefore
recommended that the process currently being followed for the nominations to
the Veridian Corporation Board remain unchanged but that Council provide a
recommendation for the nomination to the Corporation Board for the Director to
represent Clarington on the Veridian Connections Inc. Board.
The process for the replacement of directors is specified in Section 3.2 (c) of the
Agreement. The procedure attached hereto outlines the process which Council
will follow, in accordance with the Agreement, should it be necessary for a
director to be replaced.
CONFORMITY WITH STRATEGIC PLAN — Not Applicable
Staff Contact: Patti L. Barrie, Municipal Clerk
Attachments:
Attachment No. 1 — Procedure Re The Board of Directors of Veridian Corporation and
Veridian Connections Inc.
List of interested parties to be advised of Council's decision:
Veridian Corporation
Attachment 1
To Report CAD-427-13
PROCEDURE RE
THE BOARD OF DIRECTORS OF
VERIDIAN CORPORATION AND VERIDIAN CONNECTIONS INC.
A. NOMINATIONS TO THE BOARDS OF DIRECTORS
1. In December of an Election Year, Veridian places advertisements in the local
newspapers and on the Shareholders' websites seeking candidates to serve on
the Board of Directors for Veridian Corporation and Veridian Connections. Once
these applications are received, Veridian's Nominating Committee will make
recommendations to each of their Shareholders for the Councils to make their
nominations to the Board of Directors for Veridian Corporation. Once these
nominations are made, and a formal election has taken place, the Board of
Directors of Veridian Corporation elects members to the Board of Directors of
Veridian Connections Inc.
2. Upon receipt of the report of the Nominating Committee, the Municipal Clerk's
Department will reproduce the report for distribution, confidentially, to the
Members of Council together with the agenda for the Inaugural Meeting of
Council.
3. The matter will be considered by Council during the Inaugural Meeting with a
motion coming forward to:
(a) Nominate three individuals to the Veridian Corporation Board of Directors as
follows:
- 2 - Attachment 1
To Report CLD-027-13
i) The Mayor or the Mayor's Designate
ii) One member of Council
iii) One non-elected representative.
(b) Request that the Veridian Corporation Board nominate and elect to the
Veridian Connections Inc. Board of Directors, two individuals (based on the
current number of directors of the Veridian Connections Board) as follows:
i) Either the Mayor, the Mayor's Designate, or the member of Council who is
nominated to the Veridian Corporation Board of Directors; and
ii) One non-elected representative, who shall not be Clarington's non-elected
nomination to the Veridian Corporation Board of Directors.
(In making the recommendations for nominations to the Veridian Connections
Board of Directors, Council is aware that the Veridian Corporation Board is
not obliged to appoint the nominees put forward by the Municipality.)
B. REPLACEMENT OF DIRECTORS
1. VERIDIAN CORPORATION BOARD
In accordance with Section 3.2 (c) of the Shareholders' Agreement, the
Municipality of Clarington may replace any director nominated by it to the Board
of Directors of Veridian Corporation at any time. Should this be necessary, a
resolution of Council shall be passed removing the Director and nominating a
new member to the Board to replace the removed Director.
- 3 - Attachment 1
To Report CLD-027-13
2. VERIDIAN CONNECTIONS BOARD
Should it be Council's desire to replace a member of the Board of Directors of
Veridian Connections Inc. who Clarington requested be nominated and elected to
such Board, a resolution of Council shall be passed requesting that the Veridian
Corporation Board of Directors remove the Director and nominate and elect a
new member to the Board to replace the removed Director.
Addendum to Report CLD-027-13
Attachment 2
Council Nominations to
Veridian Corporation and
Veridian Connections Inc. Boards
1.0 PURPOSE:
To establish an open and transparent process for the nomination by Council
of members to the Veridian Corporation Board and the Veridian Connections
Inc. Board and any request by Council for the removal of a member from the
Veridian Corporation Board and the Veridian Connections Inc. Board.
2.0 PROCEDURES:
2.1 Application
a) In the fall of the last year of the term of council, Veridian will advertise
in the local newspapers and on the Shareholders' websites seeking
candidates to serve on the Board of Directors for Veridian Corporation
and Veridian Connections Inc. for a four-year term, as determined by
the Shareholders. All applications will be submitted directly to Veridian
Corporation.
b) Once the applications have been received and reviewed by Veridian's
consultant who has been contracted to receive and review applications
for nominations, Veridian's Nominating Committee shall make
recommendations to each of their Shareholders for the councils to
make their nominations to the Board of Directors for Veridian
Corporation.
c) Upon receipt of the report of Veridian's Nominating Committee, the
Municipal Clerk's Department will reproduce the report for distribution,
confidentially, to the Members of Council together with the agenda for
the Inaugural Meeting of Council. The agenda is published in
accordance with the Municipality's Procedural By-law.
d) The matter will be considered by Council during the Inaugural Meeting.
Should members of Council wish to discuss specific qualifications
about an identifiable individual, the meeting will be "closed" in
accordance with the Municipal Act. Once Council is back in "open"
session, a motion will come forward to:
Page 1 of 4
i) Nominate three individuals to the Veridian Corporation Board of
Directors as follows:
a. The Mayor or the Mayor's Designate;
b. One member of Council (Should Council so desire, the term of
the appointment for the member of Council may be split, ie, one
councillor nominated for the first two years of the four-year term
and a second councillor nominated for the last two years of the
four-year term); and
c. One non-elected representative.
ii) Request that the Veridian Corporation Board nominate and elect to
the Veridian Connections Inc. Board of Directors, two individuals
(based on the current number of directors of the Veridian
Connections Inc. Board) as follows:
a. Either the Mayor, the Mayor's Designate, or the member of
Council who is nominated to the Veridian Corporation Board of
Directors; and
b. One non-elected representative, who shall not be Clarington's
non-elected nomination to the Veridian Corporation Board of
Directors. The name of the representative may be chosen from
the submitted candidates list for the Corporation Board position,
or a member of the public who has not submitted their name for
consideration.
(In making the recommendations for nominations to the Veridian
Connections Board of Directors, Council is aware that the Veridian
Corporation Board is not obliged to appoint the nominees put forward
by the Municipality.)
e) The Municipal Clerk will advise Veridian Corporation of Council's
decision.
2.2 Replacement of Directors
2.2.1 Veridian Corporation Board
In accordance with Section 3.2 (c) of the Shareholders' Agreement, the
Municipality of Clarington may replace any director nominated by it to the
Board of Directors of Veridian Corporation at any time. Should this be
necessary, a resolution of Council shall be passed removing the Director, in
accordance with the Municipality's Procedural By-law.
Page 2 of 4
2.2.1.1 Elected Representative
a) If the removed director is a member of Council, a motion shall be
passed to nominate a member of Council as a replacement director.
b) The Municipal Clerk will advise Veridian Corporation of Council's
decision.
2.2.1.2 Non-Elected Representative
a) If the removed director is the non-elected representative, following the
resolution to remove the director being passed, the Municipal Clerk will
advise Veridian Corporation and the removed director of Council's
decision.
b) The Municipal Clerk shall request Veridian to undertake their process
as outlined in subsection 2.1 a) to seek applications to fill the vacancy
and make recommendations to Council for Clarington's nominee to the
Veridian Corporation Board of Directors.
c) Upon receipt of the report of Veridian's Nominating Committee
containing the list of all applicants and the Nominating Committee's
recommended Director, the Municipal Clerk's Department will include it
on the next regularly scheduled Council meeting agenda, reproducing
the report for distribution, confidentially, to the Members of Council
together with the agenda. The agenda will be published in accordance
with the Municipality's Procedural By-law.
d) In consideration of the report from Veridian's Nominating Committee,
should it be desirable to discuss specific qualifications about
identifiable individuals, the meeting will be "closed" in accordance with
the Municipal Act. Once the meeting is "open", a motion to nominate
the non-elected representative will come forward. The name of the
representative may be chosen from the submitted candidates list for
the Corporation Board position, or a member of the public who has not
submitted their name for consideration.
e) The Municipal Clerk will advise Veridian Corporation and the individual
nominated of Council's decision.
2.2.2 Veridian Connections Inc. Board
While, as noted earlier, the Veridian Corporation Board is not obliged to
appoint the nominees put forward by the Municipality to the Board of
Directors of Veridian Connections Inc., every attempt will be made to work
with Veridian to implement the following process:
Page 3 of 4
a) Should it be Council's desire to replace a member of the Board of
Directors of Veridian Connections Inc., a resolution of Council shall be
passed, in accordance with the Municipality's Procedural By-law,
requesting that the Veridian Corporation Board of Directors remove the
director.
b) The Municipal Clerk will advise Veridian Corporation of Council's
decision. If the director requested to be removed is the non-elected
director, the Municipal Clerk will also request Veridian to commence
their process as outlined in subsection 2.1 a) to seek applications to fill
the vacancy and provide Clarington Council the opportunity for input
prior to making the appointment.
2.2.2.1 Elected Representative
a) Upon notification that the director has been removed, Council shall
consider the matter at a regularly scheduled Council meeting and pass
a motion to request Veridian Corporation to nominate and elect to the
Veridian Connections Inc. Board of Directors the member of Council so
nominated.
b) The Municipal Clerk will advise Veridian Corporation of Council's
decision.
2.2.2.2 Non-Elected Representative
a) Upon notification that the director has been removed and receipt of the
report from the Veridian Nominating Committee containing the list of all
applicants and the Nominating Committee's recommended Director,
the Municipal Clerk's Department will include it on the next regularly
scheduled Council meeting agenda, reproducing the report for
distribution, confidentially, to the Members of Council together with the
agenda. The agenda will be published in accordance with the
Municipality's Procedural By-law.
b) In consideration of the report, should it be desirable to discuss specific
qualifications about identifiable individuals, the meeting will be "closed"
in accordance with the Municipal Act. Once the meeting is "open", a
motion to nominate the non-elected representative will come forward.
c) The Municipal Clerk will advise Veridian Corporation and the individual
nominated of Council's decision and request that the Corporation
Board make the appointment to the Veridian Connections Inc. Board.
Page 4 of 4