Atlantic Lottery Corporation

Department

Finance

Authority

Unanimous Shareholders Agreement Lotteries Act

Remuneration

The ALC will remunerate independent Directors when they conduct business on behalf of the corporation, to recognize their role in providing corporate stewardship, oversight and protection of the shareholders' interests. According to the by-laws of the Corporation: Non-Independent Directors will not receive any remuneration from the Corporation for their services as Directors Independent Directors will receive remuneration from the Corporation for their services as Directors, as fixed by the Board and on terms established by the Board. The current ALC Board Remuneration Policy is as follows: Independent Chair of the Board $15,000 annual retainer $500 fee for each of the following functions: Chairing a Board or Board Committee meeting Preparation for a meeting and Attending a Board or Committee meeting $250 for conference calls Independent Directors $500 director's fee each day while conducting ALC business $500 for attending a Board or Committee meeting $500 for preparation for a Board or Committee meeting $500 for chairing a Board or Committee meeting $250 for conference calls Director expenses for travel to Board meetings and ALC business are reimbursed in accordance with ALC's travel policies and standard.

Purpose:

In 1976, under the authority of section 3(c) of the Lotteries Act, the Government of Newfoundland and Labrador entered into an agreement (the Unanimous Shareholders Agreement) with the other three Atlantic Provinces to establish the Atlantic Lottery Corporation (ALC). The purpose of the ALC is to provide safe and responsible products for those Atlantic Canadians who choose to participate in lottery games. All profits earned by the ALC are returned to its shareholders and used to support the funding of essential services and infrastructure. The ALC shareholders are as follows:

• New Brunswick Lotteries and Gaming Corporation
• Nova Scotia Provincial Lotteries & Casino Corporation
• Prince Edward Island Lotteries Commission
• Province of Newfoundland and Labrador

Each of the Atlantic Provinces owns one (1) of the four (4) common shares of ALC. Under the Unanimous Shareholder Agreement, each of the Atlantic Provinces has appointed ALC as its agent: Nova Scotia has appointed ALC as its agent to operate lotteries in Nova Scotia while New Brunswick, Newfoundland and Labrador, and Prince Edward Island have each appointed ALC as its agent to manage, conduct and operate lottery schemes on behalf of each Province.

The ALC Board of Directors determines the strategic direction and corporate policies, oversees business operations, and approves the annual business plan, operating and capital budgets. Assisted by the Audit Committee, the Board oversees the management of Atlantic Lottery’s internal controls and financial systems. Overall duties and responsibilities of the Board include:

• Appoint ALC’s bank and designates officers and/or other persons to transact banking business on behalf of ALC
• Establish the manner and terms and conditions of bonding of all ALC officers and employees
• Work with Management to review and approve policies to guide ALC Management that are consistent with the authorities contained in the Governing Documents, and which are in accordance with the business conduct and ethical standards of the organization.
• May establish other ALC offices and agencies elsewhere in Canada, in addition to the head office of the Corporation, which is located in Moncton, New Brunswick
• Determine the form of the corporate seal of the Corporation
• Direct the manner in which, and the persons by whom deeds, transfers, assignments, contracts, obligations and other instruments in writing or any class of such items shall be signed

Structure:

Pursuant to the General By-Laws, each Shareholder is entitled to appoint up to three Directors, two of which are to be Independent Directors and only one of which shall be a Non-Independent Director. An Independent Director is a Director that is not:

• A director, officer or employee of a Shareholder
• A public servant in the Province of the Shareholder who appointed such director
• An elected official in the Province of the Shareholder who appointed such director

A Non-Independent Director is one who is not an Independent Director.

The Government of Newfoundland and Labrador’s Non-Independent Director is appointed as the Deputy Minister (or their delegate) of the Department of Finance. The two Independent Director appointments are therefore subject to this independent appointments process.

The Board appoints an independent Chair to hold office for a term as determined by the Board. The Chair of the Board cannot be a current member of the Board nor an officer of the Corporation. The Chair of the Board is a non-voting member and cannot be a current member of the Board nor an officer of the Corporation.

The elected officers of the Corporation include a Vice-Chair and Secretary and such other officers that the Board of Directors may determine by By-Law. The Board of Directors will appoint the Vice-Chair and Secretary at the first Directors’ Meeting following the Annual Shareholders’ Meeting at the AGM and they will hold office for one year.

Competency Profile:

The Board of Directors should collectively possess the following competencies to support its responsibility for stewardship of the ALC:              

• Government Operations/Knowledge
• Financial/Accounting Leadership
• Information Technology
• Marketing Leadership
• Legal
• Organizational Design & Development
• Commercial Enterprise – Executive Leadership or Entrepreneurship
• Strategic Focus
• Risk Management/Assessment
• Innovation/Design Thinking

Qualifications:

The following attributes are assets to serving on the ALC Board of Directors:

• Established creditability in the Province and/or the Atlantic Canadian marketplace
• Knowledge of the lottery industry
• Directors College or other Formal Directors Training
• Other similar board experience (such as complexity, multi-jurisdictional perspective, and commercial crown corporation)

Time Commitments:

Meetings of the Board may be held at such time and place as may be determined by the Directors.

Board meetings can be held within the jurisdiction of any Shareholder and are typically a maximum of one day in length. Board books are emailed to members one week prior to each meeting.

Board Meetings

• ALC Board members typically meet 7 months/year for a full Board meeting. These meetings are half-day meetings with a few hours of preparation time.

Sub-Committee Meetings

• Directors may also be expected to participate on the Board’s three sub-committees. The sub-committees are as follows:
• Audit Committee
• Organizational Development and Social Responsibility Committee
• Governance Committee
• Sub-committee members meet anywhere from 4-5 times/year. These meetings are half-day meetings with a few hours of preparation time. Sub-committee Chairs have some additional preparation time in order to facilitate the meetings.
  

Conference Calls

• On occasion between meetings, a conference call may be organized for the full Board or Committee. This is normally to address a specific, time-sensitive agenda topic. Some preparation would be required.
  

Ongoing Education

• There are also conferences, training and other educational sessions offered to Directors throughout the year as part of Board Development.

Term:

Each Director is appointed for a three year term. Appointments are made at the annual general meeting of the Corporation. Directors hold office until the third annual meeting of the Corporation following the date of such appointment. The annual general meeting is typically held in June and its location rotates between the jurisdictions of the Shareholders.

The Directors appointed by each Shareholder will serve staggered terms and to give effect to such staggered terms, the term of each Director appointed by the Shareholder will commence as follows:

• The Non-Independent Director will be appointed to hold office until the next annual general meeting following the date of such appointment
• One Independent Director will be appointed to hold office until the second annual general meeting following the date of such appointment
• One Independent Director is appointed to hold office until the third annual general meeting following the date of such appointment

Thereafter, except where a Director is appointed to fill a vacancy, Directors will be appointed for three year terms.