Corporate Governance

The Board of Directors ("Board") and management of the Company are committed to strong corporate governance and believe it is a vital component for the effective and efficient operation and future success of the Company. Good corporate governance demonstrates the Board’s ability to independently direct and evaluate the performance of the Company’s management as well as that of the Board members themselves. This is achieved through a well qualified Board, a strong relationship between the Board and senior management, and strong governance practices and procedures.

The Company has considered the guidance provided by the CSA’s National Policy 58-201 ("NP 58-201") in developing its corporate governance practices. NP 58-201 is intended to assist companies in improving their corporate governance practices and contains guidelines on issues such as the constitution and independence of corporate boards and their functions. The Company’s corporate governance practices generally comply with NP 58-201’s fundamental principles. The Company also follows the provisions of CSA National Instrument 58-101 with respect to disclosure of its corporate governance practices.

CSA has also enacted rules regarding the composition of audit committees (Multilateral Instrument 52-110 - Audit Committees) and the certification of an issuer’s disclosure controls and procedures and design of internal control over financial reporting (Multilateral Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings). The Company is currently in compliance with the requirements of these instruments.

The Company’s corporate governance practices are outlined below.

Mandate and Responsibilities of the Board

The shareholders of Accord elect the members of the Board who in turn are responsible for overseeing all aspects of the Company’s business, including appointing management and ensuring that the business is managed properly, taking into account the interests of the shareholders and other stakeholders, such as employees, clients, suppliers and the community at large. The Board’s duties are formally set out in its Charter. In addition to the Board’s statutory obligations, the Board is specifically responsible for the following:

(i) satisfying itself as to the integrity of the Company’s President and other executive officers and that they create a culture of integrity within the Company;

(ii) adoption of a strategic planning process – the Board participates in strategic and operational planning initiatives as they develop, provides direction to management and monitors its success in achieving those initiatives;

(iii) identification of the principal risks of the Company’s business and ensuring that there are systems in place to effectively monitor and manage these risks. In this respect, the Board reviews and approves all credit above $1,000,000, including loans to clients and assumption of credit risk;

(iv) appointing, training and monitoring senior management and planning for succession – the Board evaluates senior management on a regular basis, sets objectives and goals and establishes compensation to attract, retain and motivate skilled and entrepreneurial management;

(v) a communications policy to communicate with shareholders and other stakeholders involved with the Company – the Company has a policy in place to disseminate information, respond to inquiries, issue press releases covering significant business activities and display information on the Company’s web site;

(vi) the integrity of the Company’s internal control and management information systems – the Audit Committee oversees the integrity of the Company’s internal control and management information systems and reports to the Board;

(vii) reviewing the Company’s quarterly and annual financial statements, MD&A and related press releases, and overseeing its compliance with applicable audit, accounting and reporting requirements through the functions of its Audit Committee; and

(viii) ensuring strong governance is in place by establishing structures and procedures to allow the Board to function independently of management, establishing Board committees to assist it in carrying out its responsibilities and undertaking regular self-evaluation as to the effectiveness and independence of the Board.

In addition to those matters which must by law be approved by the Board, management seeks Board approval for any transaction which is outside of the ordinary course of business or could be considered to be material to the business of the Company. The frequency of the meetings of the Board, as well as the nature of agenda items, change depending upon the state of the Company’s affairs and in light of opportunities or risks which the Company faces. The Board meets at least quarterly to review the business operations and financial results of the Company, including regular meetings both with, and without, management to discuss specific aspects of the operations of the Company. Each director is expected to attend all Board meetings and comprehensively review meeting materials provided in advance of each meeting.

Composition of the Board

The Board has considered its size and the number of directors and believes that the current size facilitates effective decision making and direct and immediate communication between the directors and management. It also permits individual directors to involve themselves directly in specific matters where their personal inclination or experience will best assist the Board and management in dealing with specific issues.

The Board has neither a corporate governance committee nor a nominating committee preferring instead to perform these functions directly at the Board level. The Board and its committees have had, and continue to have, varied responsibilities. They include nominating new directors, assessing the effectiveness of the Board, its committees and members individually and as a whole, approving requests of directors to engage outside advisors at the expense of the Company and reviewing the adequacy and form of compensation of directors. Directors’ compensation is set after giving due consideration to the directors’ workload and responsibilities and reviewing compensation paid to directors of similar-sized public companies.

The Board does not have a formal chair or "lead" director and it is felt that, given the current structure of the Board and the fact that seven of its eight members are independent of management, one is not needed. The Board believes that there are adequate structures in place to facilitate the functioning of the Board independent of management without the need for a chair. Should the need develop in the future, the Board will consider whether a formal or acting chair or a "lead" director is required.

Given the fact that there have only been two new directors of the Company in the past fifteen years, no formal orientation and education program for new directors is currently considered necessary. However, as individual circumstances dictate, each new director receives a detailed orientation to the Company, which covers the nature and operations of the Company’s business and his responsibilities as a director.

Directors are also expected to continually educate themselves to maintain the skill and knowledge necessary for them to meet their obligations as directors. They do this principally through attendance at seminars and the review of publications and materials relevant to a director’s role as provided by the Company’s management, external auditors, lawyers, other directorships and/or other outside sources.

Committees of the Board

The Board discharges its responsibilities directly and through two committees: an Audit Committee and a Compensation Committee.

The Audit Committee is composed of Mr. Austin Beutel, Chairman, Mr. Ben Evans, Mr. John Lamont and Mr. Frank White, each of whom is an independent director. Each member of the Audit Committee is financially literate, that is, they are able to read and understand fundamental financial statements. The Charter of the Audit Committee sets out the Committee’s responsibilities which include reviewing quarterly and annual financial statements and MD&A and related press releases before they are approved by the Board; making recommendations to the Board regarding the appointment of independent auditors and assuring their independence; meeting with the Company’s management at least quarterly; reviewing annual audit findings with the auditors and management; and reviewing the risks faced by the Company, the business environment, the emergence of new opportunities, and the steps management has taken to mitigate exposure to significant risks.

The Audit Committee has adopted a corporate Code of Ethics and a "whistleblower policy" whereby any director, officer or employee of the Company or its subsidiaries who is aware of acts by a director, officer or employee which are in contravention of the standards of business and personal ethics required of them by the Company, or in violation of applicable laws and regulations, is required to bring such matters to the attention of management or directly to the Chairman of the Audit Committee. All reported violations will be investigated and appropriate corrective action taken if warranted.

The Compensation Committee is composed of Mr. Austin Beutel, Mr. John Lamont and Mr. Thomas Beck, each of whom is an independent director. The Compensation Committee’s mandate includes evaluating the performance of the Company’s executives and making recommendations for approval by the Board with respect to their remuneration. The Compensation Committee reviews compensation paid to management of similar-sized companies to ensure that remuneration is consistent with industry standards. The Compensation Committee also considers and makes recommendations with respect to such matters as incentive plans, employee benefit plans and the structure and granting of stock options or share appreciation rights. A report on executive compensation is included in the Company’s Management Proxy Circular each year.

Expectations of Management

The Board expects management to adhere to the highest standards of business and personal ethics and to conduct itself with the utmost degree of honesty and integrity in fulfilling its duties and responsibilities and complying with all applicable laws and regulations. The Board expects management to operate the Company in accordance with approved annual business and strategic plans, to do everything possible to enhance shareholder value and to manage the Company in a prudent manner. Management is expected to provide regular financial and operating reports to the Board and to make the Board aware of all important issues and major business developments, particularly those that had not been previously anticipated. Management is expected to seek opportunities for business acquisitions and expansion, and to make appropriate recommendations to the Board.