Bill C-78

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	Chairperson
Chairperson	14. (1) The Governor in Council shall, on the recommendation of the Minister after the Minister has consulted with the board of directors, the Minister of National Defence and the Solicitor General of Canada, designate one of the directors as Chairperson to hold office during good behaviour.
Removal	(2) The Governor in Council may remove the Chairperson for cause.
Presiding at meetings	(3) The Chairperson shall preside at all meetings of the board of directors and may exercise the powers and perform the duties and functions that are specified by the board of directors.
Replacement of Chairperson	(4) If the Chairperson is absent at any meeting of the board of directors, one of the directors present who is chosen to so act by the directors present shall preside and have all the powers, duties and functions of the Chairperson.
Incapacity of Chairperson	(5) If the Chairperson is incapable of performing his or her duties or there is a vacancy in the office of Chairperson, the Minister may designate another director to exercise the powers and perform the duties and functions of the Chairperson.
Remuneration of Chairperson	(6) The Chairperson is entitled to receive from the Board the remuneration that may be fixed by the by-laws, which remuneration shall be fixed having regard to the remuneration received by persons having similar responsibilities and engaged in similar activities.
	Officers
Appointment of officers	15. (1) The board of directors may, subject to the by-laws, designate the offices of the Board, appoint officers of the Board and specify their duties.
Directors not officers	(2) A director is not eligible to be appointed an officer of the Board.
Two or more offices	(3) A person may hold two or more offices of the Board.
	Standard
Obligation	16. (1) Every director and officer of the Board in exercising any of the powers of a director or an officer and in discharging any of the duties of a director or an officer shall
	(a) act honestly and in good faith with a view to the best interests of the Board; and
	(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
Special knowledge or skill	(2) A director or officer of the Board who in fact possesses, or by reason of profession or business ought to possess, a particular level of knowledge or skill relevant to the director's or officer's powers or duties shall employ that particular level of knowledge or skill in the exercise of those powers or the discharge of those duties.
Reliance on statements	(3) A director or an officer of the Board is deemed to comply with subsections (1) and (2) if he or she relies in good faith on
	(a) financial statements of the Board represented by an officer of the Board, or represented in a written report of the Board's auditor, to be a fair reflection of the financial condition of the Board; or
	(b) a report of an accountant, lawyer, notary or other professional person whose profession lends credibility to a statement made by the person.
Duty to comply	17. (1) Every director, officer and employee of the Board shall comply with this Act and the by-laws.
No exculpation	(2) No provision in any contract, in any resolution of the Board or in the by-laws relieves any director, officer or employee of the Board from the duty to act in accordance with this Act or relieves a director, officer or employee from liability for a breach of the Act.
Directors' and officers' insurance	18. (1) The Board may purchase and maintain insurance for the benefit of a director or officer of the Board, a former director or officer of the Board, or any person who acts or acted at the Board's request as a director or officer of an entity of which the Board is or was a shareholder or in which the Board has or had a financial interest - and the personal representatives of that person - against any liability incurred by the person in that capacity unless the liability relates to a failure to act honestly and in good faith.
If no insurance	(2) If the Board does not purchase and maintain insurance under subsection (1), the Board shall indemnify each person referred to in that subsection, out of the funds, against any liability incurred by the person in that capacity, so long as the person acted honestly and in good faith.
	Decisions of Board of Directors
Decisions	19. Apart from the meeting required by section 49, the board of directors, or any committee of the board of directors, need not have any meetings unless required to do so by the by-laws. It shall make decisions by majority vote of a quorum of members, either in person or otherwise, in accordance with the by-laws.
	Conflicts of Interest
Disclosure of director's interest	20. (1) A director or officer of the Board shall disclose in writing to the Board or request to have entered in the minutes of a meeting of the board of directors or one of its committees the nature and extent of the director's or officer's interest, as prescribed,
	(a) as a party to a transaction or proposed transaction with the Board; or
	(b) as a director or an officer of any entity that is a party to a transaction or proposed transaction with the Board or as a person who holds a material interest in any such entity.
Time of disclosure for director	(2) The disclosure must be made, in the case of a director,
	(a) at the meeting at which a proposed transaction is first considered;
	(b) if the director was not at the time of that meeting interested in a proposed transaction, at the first meeting after the director becomes so interested;
	(c) if the director becomes interested after a transaction is made, at the first meeting after the director becomes so interested; or
	(d) if a person who is interested in a transaction later becomes a director, at the first meeting after the person becomes a director.
Time of disclosure for officer	(3) The disclosure must be made, in the case of an officer,
	(a) without delay after the officer becomes aware that the transaction or proposed transaction is to be considered or has been considered at a meeting of the board of directors or one of its committees;
	(b) if the officer becomes interested after the transaction is made, without delay after the officer becomes so interested; or
	(c) if a person who is interested in the transaction later becomes an officer, without delay after the person becomes an officer.
Time of disclosure for director or officer	(4) If a transaction or proposed transaction is one that, in the ordinary course of the Board's business, would not require approval by the board of directors, a director or officer shall disclose in writing to the Board or request to have entered in the minutes of a meeting of the board of directors or one of its committees the nature and extent of the interest of the director or officer without delay after the director or officer becomes aware of the transaction or proposed transaction.
Voting	(5) A director referred to in subsection (1) shall not vote on a resolution or participate in a discussion to approve the transaction mentioned in that subsection unless the transaction is
	(a) one relating primarily to the director's remuneration as a director of the Board or one of its subsidiaries;
	(b) one for insurance or indemnity under section 18; or
	(c) one with a subsidiary.
Continuing disclosure	(6) For the purposes of this section, a general notice to the board of directors or to one of its committees by a director or officer, declaring that the director or officer is a director or officer of, or has a material interest in, an entity and is to be regarded as interested in any transaction made with that entity, is a sufficient declaration of interest in relation to any transaction so made.
Avoidance standards	(7) A transaction between the Board and one or more of its directors or officers, or between the Board and another entity of which a director or officer of the Board is a director or officer or in which a director or officer of the Board has a material interest, is not null, void or voidable by reason only of that relationship or by reason only that a director with an interest in the transaction is present at or is counted to determine the presence of a quorum at a meeting of the board of directors or on one its committees that authorized the transaction, if
	(a) the director or officer disclosed the interest in accordance with subsection (2), (3), (4) or (6);
	(b) the transaction was approved by the directors; and
	(c) the transaction was reasonable and fair to the Board at the time it was approved.
Application to court	(8) If a director or officer of the Board fails to disclose an interest in a transaction in accordance with this section, a court may, on the application of the Board, set aside the transaction on any terms that it thinks fit.
Meaning of ``transaction''	(9) In this section, ``transaction'' includes a contract, a guarantee and an investment.
	General
No constructive notice	21. No person dealing with the Board or with any person who has acquired rights from the Board is deemed to have notice or knowledge of the contents of a document, other than an Act of Parliament or any instrument required to be published in the Canada Gazette pursuant to the Statutory Instruments Act, concerning the Board by reason only that the document is available at the head office of the Board or has been made public.
Validity of acts	22. An act of the Chairperson or other director of the Board, or of the chief executive officer or other officer of the Board, is not invalid by reason only of an irregularity in that person's appointment or a defect in that person's qualifications.
Assertions	23. The Board may not assert against a person dealing with the Board - or with a person who has acquired rights from the Board - other than one who has knowledge that the facts asserted are true
	(a) that this Act or the by-laws have not been complied with; or
	(b) that a document issued by a director, officer or an agent or mandatary of the Board having apparent authority to issue the document is not valid or genuine by reason only that the person who issued the document lacked actual authority to issue the document.
	BY-LAWS
By-laws	24. (1) The board of directors may make by-laws that are consistent with this Act to govern the conduct and management of the Board's business and affairs, including by-laws
	(a) for the administration, management and control of the Board's property;
	(b) governing the calling of meetings of the board of directors and its committees, the time and place of those meetings and the quorum and procedure in all matters relating to those meetings;
	(c) respecting the functions, duties and remuneration of the directors, officers and employees of the Board; and
	(d) respecting the establishment of committees of the board of directors and the appointment of members to those committees.
Effective date	(2) A by-law is effective as soon as it is made or on a later date that may be stated in the by-law to be its effective date.
Copy to ministers	25. (1) The board of directors shall provide a copy of every by-law and every amendment to or repeal of any by-law to the Minister, the Minister of National Defence and the Solicitor General of Canada within 14 days after its effective date.
By-laws available to the public	(2) A copy of every by-law shall be kept at the head office of the Board. Anyone is entitled, during the usual business hours of the Board, to examine the by-laws and, on payment of a reasonable fee, to make copies of or take extracts from them.
Statutory Instruments Act does not apply	26. The Statutory Instruments Act does not apply in respect of by-laws.
	COMMITTEES
	Establishment
Audit and investment committees	27. (1) The board of directors shall establish an audit committee and an investment committee.
Other committees	(2) The board of directors may establish the other committees that it considers necessary and assign to them the duties that it considers appropriate.
	Audit Committee
Duties of audit committee	28. The audit committee shall
	(a) require the Board's management to implement and maintain appropriate internal control procedures;
	(b) review, evaluate and approve those internal control procedures;
	(c) review and approve the Board's annual financial statements and report to the board of directors before those statements are approved by the board of directors;
	(d) meet with the Board's auditor to discuss the Board's annual financial statements and the auditor's report;
	(e) review all investments and transactions that could adversely affect the return on the Board's investments that are brought to the committee's attention by the Board's auditor or officers;
	(f) meet with the chief internal auditor of the Board, or with the person acting in a similar capacity, and with the Board's management, to discuss the effectiveness of the internal control procedures; and
	(g) perform the other duties that the board of directors assigns to it.
Audit committee may request consideration of matters	29. The board of directors shall consider, on request of the audit committee, a matter of concern to the committee.
Auditor's right to attend meetings	30. (1) The Board's auditor is entitled to receive notice of and to attend meetings of the board of directors and meetings of the audit committee, at the Board's expense, and to be heard at those meetings on matters relating to the auditor's duties.
Rights if no meeting	(2) If the board of directors or the audit committee proposes to make a decision with respect to matters referred to in subsection (1) without holding a meeting, the auditor is entitled to notice of a proposed decision to be made by the board or the committee and the proposed decision shall not be made until the auditor has been given the opportunity to make submissions on the matter in writing, in accordance with the by-laws.
Requiring auditor's attendance	(3) The Board's auditor shall attend meetings of the audit committee, if requested to do so by a member of the audit committee - and shall attend meetings of the board of directors, if requested to do so by a director - at the Board's expense.