Presented by: Hartley R. Nathan, Q.C. Partner Minden Gross LLP Ryan Gelbart Associate

1. Minden Gross LLP & ACC Canada presentTHE PREPARATION FOR AND CONDUCT OF BOARD MEETINGSNovember 3, 2010 Presented by: Hartley R. Nathan, Q.C. Partner Minden Gross LLP Ryan Gelbart Associate Minden Gross LLP Guest Speaker: Carol McNamara VP, Assistant General Counsel and Corporate Secretary Royal Bank of Canada

2. Strategy Tip • Do not automatically adopt a “form” of pre-printed By-law for the sake of expediency.

3. Authority to Call Meetings • Provisions relating to the calling of meetings typically contained in company By-laws • Generally a duty of the Corporate Secretary • S. 126(8) of the OBCA permits a quorum of directors to call a meeting • Proceedings conducted at a meeting called by an unauthorized person may be null and void

4. Strategy Tip • A notice should set out by whose authority it has been given and should be signed by the empowered officer - where the secretary signs a notice given by order of the directors or another officer, it is good practice to have it so state.

5. Notice Requirements • Only statutory time requirement is 10 days notice under OBCA for meeting called by quorum • Must look to company By-laws • Waivers are permitted under OBCA / CBCA

6. Strategy Tip • Even when all of the directors attend a meeting being called on short notice, it is still good practice to have a waiver signed in order to avoid any subsequent challenge to the validity of the meeting on the grounds that proper notice was not given

7. To Whom To Send Notice • Every director has the right to attend board meetings • It is not open to a corporation to exclude a director from a meeting on the basis that the director is unfit, has allegedly engaged in misconduct, sits on the board of a competitor or has been convicted of a criminal offence • Notice should be given to a director who has indicated verbally that he cannot attend a meeting on the basis that he or she may change his or her mind

8. Form of Notice • Must check By-laws to determine level of disclosure to be set out in notice • Few statutory requirements: • Notice of meeting called by quorum under S. 126(8) of OBCA must state general nature of business to be conducted • 114(5) of CBCA says that certain matters to be transacted must be listed in notice (i.e. approving take-over bid)

9. Strategy Tip • Avoid surprises - whether or not there is a disclosure requirement in the By-laws, the desirable practice is to provide disclosure of all matters to be addressed at the meeting

10. MeetingMaterials • Agenda • Standing Agenda • Specific Meeting Agenda • Chair’s Agenda • Consent Agenda • Materials Book • Reliance on info volunteered by management is often not enough

11. Strategy Tip • The corporation should designate a “point person” to whom directors can direct questions or from whom directors are able to obtain access to information or copies of documents, if necessary

12. Essentials of a Valid Notice • Contains the date, time and place of the meeting • Contains a description of the purpose of the meeting • Contains a description of any special business to be conducted • Complies with requirements in corporate statutes and By-laws as to form and content • Must be issued on good authority

13. Essentials of a Valid Notice Cont’d • Must be delivered in the manner prescribed in the By-laws • Must allow the appropriate length of time between service and the date of meeting • Must be sent to every person entitled to receive it • Should be accompanied by agenda and materials book

14. Refusal to Attend • A concerted plan by a director to absent himself or herself from a meeting in order to prevent a quorum may be improper • Courts have been reluctant to issue an injunction to compel attendance but a damages claim may be available • Consider removing the dissident director through a special meeting of shareholders

15. Strategy Tip • By-laws can provide that if a director fails to attend a certain number of meetings without reasonable excuse, he or she will be deemed to have resigned

16. Role of the Chair • Conduct of a board meeting is largely in the hands of the Chair • Chair expected to preserve order • Chair responsible for conducting votes and granting adjournments • Chair authorized to decide on questions arising at the meeting

17. Strategy Tip • If there are divided factions within the board consider an independent Chair, and/or consider counsel for each faction • This should be by agreement of the disputing parties, if possible

18. Debate • Corporation entitled to have directors engage in meaningful debate before a decision is made • All directors are entitled to participate including the minority even though they will be bound by the majority decision

19. Casting Vote • No casting vote for the Chair at common law or under corporate statutes • Must be provided for in the By-laws • Casting vote used to remedy occasional tie votes not to deal with continuous and settled deadlock condition • Chair must act in good faith in casting a tie-breaking vote but is not compelled to cast it

20. Secret Ballots • Not typically used • Could give rise to problems – i.e. How does one dissent in these circumstances and have this reflected in minutes? • Could be within the discretion of the Chair to use secret ballots for sensitive decisions

21. Strategy Tip • Drafters of the By-law using some foresight and careful drafting could make effective provision for voting by secret ballot

22. Appeals from Decisions of the Chair • The Chair of a meeting has prima facie authority to decide all questions relating to procedure at the meeting. If the Chair’s decision is challenged, any member may request a ruling from the meeting itself. Other decisions are deemed to be correct unless successfully challenged in Court by a member • On procedural matters, appeal is to the meeting • On other matters, recourse is to the Court

23. Dealing with Disorder • Procedure and appropriate decorum at a meeting is largely in the hands of the Chair • Chair can declare a recess or declare adjournment • In extreme cases the Chair can terminate the meeting • Chair can expel a director with the support of the majority

24. Strategy Tip • The Board should establish a written code of conduct for directors to adhere to, which includes consequences of non-compliance • Code of conduct should be adopted by By-law.

25. Conflicts of Interest • Directors must not allow personal interests to conflict with the interests of the corporation • The requirement to disclose interests in contracts are set out in Section 120 of the CBCA and 132 of the OBCA. • Under the OBCA s.132(5) a conflicted director may not stay for any discussion regarding the issue under discussion • Nominee directors are not to be servient to their appointers • Position of a nominee director highlights the conflict situation

26. The Independence of Directors • Directors of regulated corporations • Duties are to the corporation as fiduciaries • Independent directors should not support a course of action that is inconsistent with their fiduciary duties • There are numerous options for a director to consider if unable to acquiesce in a decision

27. Role of the Corporate Secretary • Arrange and manage the process of calling board meetings • Ensure effective running of activities of the Board and committees • Act as a primary point of contact

28. Contact Us Hartley R. Nathan, Q.C., Partner Minden Gross LLP (416) 369-4109 hnathan@mindengross.com Ryan Gelbart, Associate Minden Gross LLP (416) 369-4172 rgelbart@mindengross.com