Governance & Leadership

Corporate Governance

The Board of Directors (the “Board”) is representative of the diversity of the Greater Toronto Area and the major economic sectors in the region that Toronto Pearson serves.

The GTAA was incorporated in 1993 as a non-share capital corporation and recognized as a Canadian Airport Authority by the Government of Canada in 1994. The GTAA assumed operation of Toronto Pearson International Airport on December 2, 1996. In 2014, the GTAA was continued under the Canada Not-for-profit Corporations Act. Although the GTAA is a non-share capital corporation, the GTAA complies with Canadian securities legislation as a reporting issuer. As a corporation without share capital, the GTAA has Members rather than shareholders or other equity holders.

The GTAA is governed by a Board consisting of 15 Directors elected by the GTAA’s Members. Memberships in the GTAA are issued by the Board. Directors serve terms of up to three years and are eligible to be re-elected by the Members subject to a maximum total term of nine years. Board members collectively have a fiduciary responsibility to represent the interests of the corporation and all of its stakeholders.

Five Directors are elected by the Members from candidates nominated by municipalities (specifically, the regional municipalities of York, Halton, Peel and Durham, and the City of Toronto). Prior to the end of the term of a member nominated by a municipality, the relevant municipality is entitled to provide the names of up to three candidates. Following a rigorous assessment process, the Board issues a membership to one of the candidates who is then elected by the Members as a Director.

In addition, seven Directors are elected by the Members on a cyclical basis from a pool of eligible candidates who are identified and assessed through a search process, which includes engaging the Law Society of Upper Canada, Professional Engineers Ontario, the Institute of Chartered Accountants of Ontario, the Toronto Region Board of Trade, the Board of Trade of the City of Mississauga and the Board of Trade of the City of Brampton.

Finally, the Government of Canada nominates two individuals and the Province of Ontario nominates one individual, all of whom are elected as Directors by the Members.

All Directors on the GTAA’s Board are independent, as that term is defined in the applicable securities legislation. The GTAA’s Board is a “skills based” Board; namely, the Directors are elected on the basis of their abilities, experience and skills needed to oversee the GTAA’s complex and industry- leading activities of operating and managing Toronto Pearson, a vital transportation facility for the region’s economic and social benefit.

The GTAA’s Board meets on a regular basis; its principal responsibility is to oversee the conduct of the GTAA’s business and to set the strategic direction of the GTAA.

The Board oversees the development of long-term goals and strategies and implementation in support of Toronto Pearson’s mandate to support and foster growth in the Greater Toronto Area.

The Board also oversees the processes and systems to manage the risks associated with the GTAA’s business, and monitors and measures management’s performance in carrying out the GTAA’s strategic plan, vision and mission.

The terms of reference of the Board are included in the GTAA’s Annual Information Form, which may be accessed at www.sedar.com.

In 2017, there were five standing committees of the Board: the Audit Committee; the Governance and Stakeholder Relations Committee; the Risk Oversight Committee; the Human Resources and Compensation Committee; and the Planning and Commercial Development Committee. In addition to the standing Board committees, the Ad Hoc Airport Ownership Review Committee provided guidance to the Board in connection with the Government of Canada’s review of ownership models of airport authorities in Canada. The mandates of the Committees of the Board are summarized below:

Audit Committee

The Audit Committee’s mandate is to fulfill the legal obligations that apply to audit committees of reporting issuers and to assist the Board in fulfilling its oversight responsibilities with respect to financial reporting, accounting, auditing and internal controls. In so doing, the Committee oversees all aspects of the GTAA’s financial and accounting management procedures and the integrity of the GTAA’s financial statements and financial reporting process. It also oversees the work of the GTAA’s external auditor engaged for the purpose of preparing and issuing an auditor’s report, overseeing the qualifications and independence of the external auditor, and providing an open avenue of communication between the senior management of the GTAA, the external auditor, the internal auditor, and the members of the Board and Committees of the Board.

The Committee also oversees the GTAA’s insurance programs which minimize risk and exposure and provide for compliance with the insurance requirements under the Ground Lease and the Master Trust Indenture. Finally, the Committee monitors and oversees the defined benefit and defined contribution pension plans for the GTAA’s employees. The Charter of the Audit Committee is included in the GTAA’s Annual Information Form, which may be accessed at www.sedar.com.

Governance and Stakeholder Relations Committee

The Governance and Stakeholder Relations Committee is charged with the implementation and assessment of effective corporate governance principles and with oversight of the GTAA’s relationships and strategic communications program with governments, the community, community investment programs and the GTAA’s stakeholders. The Committee also is responsible for developing and reviewing the roles and responsibilities of the Board, the Chair of the Board, the Chairs of the Board Committees, and the President and Chief Executive Officer; overseeing the Member nomination process; recommending the issuance of memberships to candidates as Members; Board succession planning; the orientation program for new Directors; overseeing Director educational and professional development; reviewing the terms of reference of Board Committees; assessing the effectiveness of the Board and the Committees of the Board; and overseeing adherence to corporate governance requirements.

Risk Oversight Committee

The Risk Oversight Committee oversees the identification, management and mitigation of the GTAA’s principal risks. The Committee’s mandate includes proposing to the Board risk tolerances and appetites for identified risks driven by and aligned with the GTAA’s strategic goals and priorities, overseeing the effectiveness of the GTAA’s risk management program including resilience and adaptability to deal with emerging risks, risk mitigation, stress testing and scenario planning. The Committee’s responsibilities include overseeing risks relating to environmental, safety, security and airport operations.

Human Resources and Compensation Committee

The Human Resources and Compensation Committee’s mandate is to oversee matters related to the GTAA’s human resources strategy, including occupational health and safety, hiring, employee training and talent development, performance oversight and succession planning for key management positions, the GTAA’s compensation and benefit policies, recruitment and compensation matters relating to the President and Chief Executive Officer and officers, and matters relating to regulatory disclosure of compensation.

Planning and Commercial Development Committee

The Planning and Commercial Development Committee’s mandate includes oversight of the GTAA’s commercial development of the airport, business and marketing strategy, planning, development and utilization of infrastructure and facilities to meet the needs of the GTAA’s customers and stakeholders, including air carriers, passengers and cargo shippers. The Committee also is responsible for providing oversight with respect to the GTAA’s airport master plan including a land use plan.

AD HOC Airport Ownership Review Committee

Established in 2016 and disbanded in May 2017, this Committee provided guidance to the Board regarding the Government of Canada’s review of ownership models of airport authorities in Canada.