Corporate governance relates to the activities of an issuer’s board of directors, the members of which are elected by and are accountable to the issuer’s shareholders, and takes into account the role of the individual members of management who are appointed by such board of directors and who are charged with the day-to-day management of the issuer. The Board of Directors is committed to sound corporate governance practices that are both in the interests of its shareholders and contribute to effective and efficient decision-making. Antibe Therapeutics Inc. (“Antibe” or the “Corporation”) believes that its corporate governance practices ensure that its business and affairs are effectively managed so as to enhance shareholder value. Set out below is a description of the corporate governance practices of the Corporation as required by National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”) concerning corporate governance disclosure.
Pursuant to NI 58-101, a director is independent if the director has no direct or indirect material relationship with the issuer that could, in the view of the issuer’s board of directors, be reasonably expected to interfere with the exercise of a member’s independent judgment. Certain directors are deemed to have a material relationship with the issuer by virtue of their position or relationship with the Corporation. In assessing whether a director is independent for these purposes, the circumstances of each director have been examined in relation to a number of factors.
The current Board is comprised of Walt Macnee (Chair), Roderick Flower, Amal Khouri, Dan Legault, John Wallace, and Yung Wu. The majority of the current Board is independent. The current independent directors are Walt Macnee, Roderick Flower, Amal Khouri and Yung Wu. Dan Legault and John Wallace are not considered independent directors as each of them presently is, or within the last three years has been, an executive officer of the Corporation. There are no directorships held by the current directors in other public issuers.
The Board supervises the management of the business and affairs of Antibe and is mandated to act with a view to the best interests of the Corporation. The Board holds regular meetings to review the business and affairs of the Corporation and to make any decisions relating thereto. The Board believes that it functions independently of management. Directors are required to disclose any conflicts of interest. Further, independent directors are empowered to convene meetings without nonindependent directors and members of management in attendance, as appropriate. The ability to establish ad hoc committees comprised solely of independent directors provides the Board with the ability to meet independently of management whenever deemed necessary or appropriate and the chair of each such ad hoc committee provides the leadership for such committee.
The Board reviews its procedures on an ongoing basis to ensure that it can function independently of management. Currently, the Board is satisfied that it exercises its responsibilities for independent oversight of management.
Orientation and Education
Antibe does not have a formal process of orientation and education for new directors; however, as part of its mandate under the Board Charter (as defined below), the Board is responsible for ensuring that new directors receive appropriate orientation and education. Accordingly, the Board, as a whole, ensures that there is a discussion of the business of Antibe at all regular Board meetings, which provides new and existing directors an overview of the Corporation’s operations. In addition, corporate officers and legal, financial and other experts are invited from time to time to attend Board meetings to describe matters in their areas of expertise, which assists in providing continuing education to the directors.
Ethical Business Conduct
To date, the Board has not adopted a formal written Code of Business Conduct and Ethics. However, the current limited size of the Corporation’s operations and the small number of officers and consultants allow the Board to monitor on an ongoing basis the activities of management and to ensure that the highest standard of ethical conduct is maintained. As the Corporation grows in size and scope, the Board anticipates that it will formulate and implement a formal Code of Business Conduct and Ethics.
Nomination of Directors
Responsibility for identifying new candidates to join the Board belongs to the Board as a whole. In connection with the nomination or appointment of individuals as directors, the Board may consider the following factors among others: (i) the competencies and skills necessary for the Board as a whole to possess; (ii) the competencies and skills necessary for each director to possess; (iii) the competencies and skills that each new director nominee will bring to the Corporation; and (iv) whether or not each new director nominee can devote sufficient time and resources to his or her duties as a member of the Board.
The Board does not currently have a formal process in place for assessing the effectiveness of the Board as a whole, its committees or individual directors. However, such a process may be implemented in the future if deemed appropriate. Based on the Corporation’s size, its early stage of development and the number of individuals currently on the Board, the Board does not consider a formal assessment process to be necessary at this time.
The Board currently has three (3) standing committees: the Audit Committee, the Compensation Committee and the Governance Committee.
Antibe is relying on Section 6.1 of NI 52-110 with respect to the exemption from Part 3 (Composition of the Audit Committee) and Part 5 (Reporting Obligations) of NI 52-110. The Audit Committee is governed by its charter. A copy of the text of the Audit Committee’s charter, established in accordance with NI 52-110, is set out in Schedule B of its latest Information Circular.
The Audit Committee is comprised of Amal Khouri, Dan Legault and Walt Macnee (Chair). Amal Khouri and Walt MacNee are independent members of the Audit Committee. Dan Legault is not considered independent as he is the Corporation’s CEO. All members of the Audit Committee are financially literate within the meaning of NI 52-110.
Each of the above-noted individuals has acted as a senior officer, director, or audit committee member of other public issuers or financially regulated corporations in the past and as such has obtained experience in performing responsibilities as a member of the Audit Committee. In such capacity, each of the above-noted individuals has experience in the preparation, analysis and/or evaluation of financial statements generally and an understanding of internal controls and procedures for financial reporting. Based on the foregoing, it is the Board’s conclusion that each of the members of the Audit Committee has an understanding of the accounting principles used by the Corporation to prepare its financial statements, the ability to assess the general application of such accounting principles in connection with the accounting for estimates, accruals and reserves and experience in evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Corporation’s financial statements.
In the event that the Corporation wishes to retain the services of the Corporation’s external auditors for tax compliance, tax advice, tax planning or other non-audit services, such services must be pre-approved by the Audit Committee.
The Compensation Committee reviews and recommends to the Board the compensation of directors, including meeting fees, option grants and other benefits conferred upon Board members, to ensure that the compensation adequately reflects the responsibilities and risks involved in being a director of the Corporation.
The Compensation Committee is comprised of Roderick Flower and Walt Macnee (Chair), both of whom are independent.
The Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of the CEO, evaluates the CEO’s performance in light of such corporate goals and objectives, and makes recommendations to the Board with respect to the CEO’s compensation level based on such evaluation. The Compensation Committee also reviews and makes recommendations to the Board with respect to non-CEO officer compensation, including annual compensation and other benefits.
Corporate Governance Committee
The Corporate Governance Committee is responsible for developing the Company’s corporate governance policies and strategy, making recommendations to the Board regarding the Company’s approach to corporate governance, developing and recommending to the Board a set of corporate governance guidelines in light of applicable securities law and stock exchange requirements and periodically reviewing such guidelines and recommending any changes to the Board.
The Corporate Governance Committee is comprised of Rod Flower (Chair), Amal Khouri, Dan Legault and Walt Macnee. Rod Flower, Amal Khouri and Walt Macnee are independent members of the Corporate Governance Committee. Dan Legault is not considered independent as he is the Corporation’s CEO.