Hydro Ottawa Holding is committed to the goal of having leading governance practices for a company of its size and mandate. It is a goal that requires constant attention because governance standards are continuously evolving.
Hydro Ottawa Holding is a private company, incorporated under the Business Corporations Act of Ontario, in accordance with the Electricity Act, 1998. At the same time, the Corporation has a public sector shareholder and a public mandate, and is mindful of its responsibility to be accountable both to its shareholder and the public. The company’s governance practices are guided not simply by legal obligations, but by best business practices and standards established by independent agencies.
While Hydro Ottawa is not a reporting issuer under the Securities Act, and therefore not required to meet governance standards that apply to publicly-traded companies, the company is guided by these standards and seeks to meet or exceed them. In addition, Hydro Ottawa regularly compares itself to the practices of both private and public sector organizations, and to the standards set by agencies such as the Canadian Securities Administrators and the Ontario Securities Commission.
In 2007, the Corporation undertook a number of governance improvements to enhance public accountability and keep pace with emerging standards.
The company’s governance practices are guided not simply by legal obligations, but by best business practices and standards established by independent agencies.
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Governance Structure
Accountability for the effective operation of the Corporation and its subsidiaries rests with an eleven-member Board of Directors, which provides direction to the Corporation on behalf of the shareholder, the City of Ottawa. The Board provides leadership for the company within a framework of effective controls that enables risks to be assessed and managed, and is responsible for supervising the management of the business and affairs of the company and its subsidiaries.
In carrying out its oversight function, the Board of Directors is guided by a Shareholder Declaration issued by Ottawa City Council and revised from time to time, most recently on June 29, 2006. The company’s Code of Conduct, its Director Conflict of Interest and Conduct Guidelines and a Related Party Transaction Disclosure Policy and Process also govern the Board’s actions.
In 2006, a separate Board of Directors was established to oversee the operations of Hydro Ottawa Limited, in compliance with the Affiliate Relationships Code for Electricity Distributors and Transmitters issued by the Ontario Energy Board. The powers and functions of that Board are set out in a Shareholder Declaration issued by the Hydro Ottawa Holding Inc. Board of Directors. Ottawa City Council appointed seven members to this board in June 2006. A majority of the members of both Boards are independent of management and shareholder.
On a day-to-day basis, the Corporation is led by an Enterprise Executive Team, comprised of the Corporation’s President and Chief Executive Officer, the Chief Financial Officer and the senior executives of the subsidiaries. This team oversees the alignment of business practices and strategies with the goals of the Corporation, and drives performance by managing risks and opportunities. The Executive Team is accountable to the Corporation’s Board of Directors through the President and Chief Executive Officer.
2007 Governance Achievements
In 2007, the Corporation took a number of measures to keep pace with best governance practices and improve the functioning of its Boards. The company prepared a Governance Practices Manual which sets out the governance principles and practices of the Corporation in a way that is transparent to the shareholder. The Boards and management also undertook an aggressive Governance Workplan, including the development of a Director Attendance Policy, Board Assessment Policy and Protocol, Director Orientation and Continuing Education Policy and Protocol, Director and Executive Expense Reporting Policy, CEO Assessment Protocol, Salary Disclosure Protocol and defined roles and responsibilities for Committee Chairs.
The Corporation responded to shareholder expectations by providing a thorough disclosure of Executive compensation in its 2006 Annual Report, a practice that has been continued in this year’s report, by providing quarterly operational updates to the shareholder, and by committing to provide quarterly financial updates beginning in 2008.
The Corporation initiated the development of a renewed Code of Business Conduct for employees, members of the Boards and contractors working on company premises. This establishes guidelines, standards and expectations for behaviour. The development of an anonymous, third party operated Business Conduct Hotline was also initiated to complement the new Code of Conduct by providing a mechanism to identify, review and address non-compliance with the Code and other applicable policies and laws.
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