Guidelines on Corporate Governance

Our Corporate governance rules aim at allowing each authority of the Company to fully assume their role and act in the best interest of all the shareholders.

The management of the Company is supervised by a Board of Directors (the “Board”) composed almost exclusively of unrelated directors. Pursuant to the guidelines of the Toronto Stock Exchange (“TSX”) an “unrelated director” is a director who is independent of management and is free from any relationship, including business relationships that could, or could reasonably be perceived to, materially interfere with the director’s ability to act with a view to the best interest of the Company.

The Toronto Stock Exchange requires that listed companies describe their approach taken towards corporate governance relative to a series of guidelines aimed at sound management practices (Guidelines of the Toronto Stock Exchange).

The guidelines of the Toronto Stock Exchange concern in particular the composition, mandate, effectiveness and independence of the board of directors, and the function of the board and its committees.

Each year Virginia Mines, in its information circular, publishes the guidelines recommended by the TSX, including supplementary comments and observations when needed, in order to clarify Virginia’s position on these guidelines.

 

Mandate of the Board

The mandate of the Board is to supervise the management of the business and affairs of the Company. It monitors the manner in which the Company conducts its business as well as the senior management responsible for the day-to-day operations of the Company. The Board sets the Company’s policies, assesses their implementation by management and reviews the results. In addition to decisions requiring formal approval by the Board pursuant to the law or the Company’s articles of incorporation and by-laws, the Board makes all important decisions concerning, among other things, major investments and significant divestitures.

At the end of each fiscal year, the Board receives, analyses and, where appropriate, approves a yearly plan of action and budget for the following fiscal year. The directors also consider strategy-related matters, which go beyond operational and financial control issues.

 

Composition of the Board

The Board is composed of five members. Of this number, one, the President and CEO, is an employee of the Company and, as such, is considered to be related director. All other members of the Board are considered unrelated directors. Mr. Claude St-Jacques declares his business relation with the company on office rental. Consequently, he will not vote on matters related to Gestion St-Pierre's services, a company controlled by Mr. St-Jacques. The current size of the Board is appropriate to conduct its business effectively, while providing within the Board a range of diverse skills and experience.

 

Independence of the Board from Management

The Board can and does act independently of management. The positions of Chairman of the Board and of President and CEO are separate and held by two different persons. The Chairman of the Board is an unrelated director. The President and CEO is not a member of any Board committees.

 

Information

The Board receives and has access to the information it needs to fulfill its role. Directors are consulted on the agendas for board and committee meetings. Each committee reports to the Board at the board meeting which follows the committee meeting.

 

Committees

All committees are created by the Board and report directly to it. There are currently two committees of the Board, which are described below. All committee members are appointed by the Board.

 

Audit Committee

The Audit Committee consists of three directors who are unrelated. All members of the committee are financially literate and one member is designeted as a financial expert. This committee has the general mandate to review and, if deemed appropriate, recommend the approval of the Company’s annual and quarterly financial statements, and management’s discussion and analysis of same, to the Board, and more particularly to consider and evaluate all aspects of the Company’s financial reporting process, internal control.

With respect to the external auditors, the committee ensures that they remain independent of management. The committee reviews the audit plan and its execution, evaluates the auditors’ overall performance and makes recommendations regarding their nomination.

 

Compensation Committee

The Compensation Committee consists of three directors who are unrelated. All members of the committee are financially literate and have management skills. This committee has the general mandate to review and if deemed appropriate, recommend the approval of the annual compensation of the officers of the company. The committee has also put forward an option share purchase plan which sets the company's policies in regards of option compensation to the officers, directors and employees of the company as well as to certain key contractors and consultants.

 

Board's Expectations of Management

The Board expects management to assume responsibility for the day-to-day operations of the Company while conforming to the strategic plan, exploration budget and various corporate policies approved by the Board. The Board expects to be regularly informed by management of the results obtained, the progress achieved, any business opportunities which may arise and any difficulties encountered. The Board also expects management to submit for its approval alternative plans and strategies to be implemented based on the actual economic and market conditions.

The Board’s main expectation of management is that it will act with a view to the best interests of the Company and ensure long-term enhancement of shareholder value.

 

Communications with Shareholders

The Company communicates with its shareholders, investors and the financial community on a regular basis through quarterly reports, annual reports and press releases. The Company’s disclosure policy provides for the timely, factual and accurate disclosure of all material information in order to keep shareholders and all other stakeholders informed about the Company’s activities and business. The Company has put in place a shareholder relations program as well as an investor relations and communications program through which the Company can answer the questions and concerns raised by shareholders and investors and efficiently communicate with them as well as with the public at large. A disclosure policy committee has been formed and every member has a defined role. Furthermore, the company has put in place guidelines on disclosure policies and delay and communication policies. Any shareholder who wishes to communicate with the Company may do so directly through the investor relations department.

 

Code of Ethics

Acting with integrity, honesty and in good faith with respect to what is in the best interests of the Company’s stakeholders is fundamental to the Company’s reputation and ongoing success. Our Code of Ethics affirms the Company’s commitment to uphold high moral and ethical principles and specifies the basic norms of behavior for those conducting business on its behalf. Virginia is committed to sustainable growth within the parameters of protecting the environment, ensuring the safety and well-being of its employees, and supporting the communities in which it operates. It is essential that the Company's directors, officers, main consultants or contractors and employees respect and adhere to the Company's code of Ethics and to the rules and procedures outlined in the corporate policies.