Corporate Governance

The Board of Directors of the Corporation is responsible for supervising the business and affairs of the Corporation and providing strategic guidance to management. The Board of Directors of the Corporation is composed of seven independent directors and three city councillors. All directors are appointed by the sole shareholder of the Corporation. The Board of Directors has five regularly scheduled meetings each year but meets as often as is necessary to fulfill its responsibilities to the Corporation.

The Board of Directors has worked to put in place a system of corporate governance that meets the requirements of applicable Canadian Securities rules. As part of its ongoing commitment to corporate governance, the Board of Directors operates in accordance with a board mandate, and its committees operate in accordance with committee charters, which are all reviewed and approved by the Board of Directors.

 All employees, officers and directors of Toronto Hydro are required to comply with the principles set out in the Code of Business Conduct, which was implemented by the Corporation in 2004. The Code provides for the appointment of an Ethics and Compliance Officer and establishes a direct hotline to the Ethics and Compliance Officer by which perceived violations of the principles set out in the Code may be reported, anonymously or otherwise. The Ethics and Compliance Officer reports quarterly to the Audit Committee of the Board on the nature of complaints received including those related to audit and accounting matters. Where the complaint involves the conduct of a director or officer of the Corporation, the Ethics and Compliance Officer is required to report it to the Chair of the Audit Committee, who oversees the investigation of that complaint.

The Board of Directors recognizes the importance of complying with all disclosure requirements applicable by Canadian Securities rules and is committed to promoting consistent disclosure practices aimed at accurate and timely disclosure of material information. To ensure consistent and appropriate disclosure practices, the Corporation has adopted a Disclosure Policy to govern the disclosure by its employees, officers and directors of material information about the Corporation and has established a Disclosure Committee composed of senior executives to assist the Chief Executive Officer and the Chief Financial Officer in making accurate, complete and timely disclosure. The composition and operation of the Disclosure Committee are established in the Disclosure Policy.

Committees

The Board of Directors believes that its ability to discharge its responsibilities is enhanced by the active participation of committees in the corporate governance process. Currently there are four committees of the Board of Directors: Corporate Governance, Audit, Compensation, and Health and Safety. Each committee meets regularly throughout the year and provides a report at meetings of the Board of Directors on material matters considered by the committee.

Audit Committee

The Audit Committee is responsible for overseeing the adequacy and effectiveness of financial reporting, accounting systems and internal controls. The Audit Committee reviews the Corporation’s quarterly and annual financial statements as well as financial statements prepared in connection with securities offerings or required by applicable regulatory authorities, reviews the audit plans of the external auditors, oversees the internal audit of the Corporation, reviews officers’ personal expenses on an annual basis and recommends the external auditor for appointment by the Corporation’s sole shareholder.

Corporate Governance Committee

The Corporate Governance Committee is responsible for considering and making recommendations to the Board with respect to matters relating to the corporate governance of Toronto Hydro, including board and committee composition and mandates, and guidelines for assessing the effectiveness of the Board and its committees and procedures to ensure that the Board functions independently from management.

Compensation Committee

The Compensation Committee is responsible for reviewing and assisting the Board in overseeing Toronto Hydro’s compensation program.

Health and Safety Committee

The Health and Safety Committee is responsible for considering and making recommendations to the Board with respect to matters of health and safety.