The following code of business ethics was adopted by the board of directors of Morneau Shepell Inc. effective May 8, 2019.
This Code of Business Conduct and Ethics (the “Code”) covers a wide range of business practices and procedures. It does not cover every issue that may arise, but sets out basic principles to guide all directors, officers, employees and independent contractors of the Company (collectively, “Company Personnel”). “Morneau Shepell” or the “Company”, as used in this Code, means Morneau Shepell Inc. and its subsidiaries and affiliates.
All Company Personnel must conduct themselves accordingly and seek to avoid even the appearance of improper behaviour. Furthermore, all Company Personnel are required to ensure that their personal and professional dealings are conducted in an honest and ethical manner and are free of any deceitful, fraudulent or illegal activities. The responsibilities of each Company Personnel include helping to create and maintain a culture of high ethical standards and a commitment to compliance. In the case of directors and officers, responsibilities involve maintaining a work environment that encourages Company Personnel to raise concerns with management and promptly addressing Company Personnel compliance concerns.
If a law conflicts with a policy in this Code, the Company Personnel must comply with the law. If a local custom or policy conflicts with this Code, the Company Personnel must comply with this Code. If you have any questions about these conflicts, you should ask your manager or other appropriate personnel in superior position with the Company on how to handle the situation. The Company is responsible for administering this Code and the General Counsel of the Company, or a designate in the Company’s legal department is the designated contact person for any questions regarding the Code.
It is the responsibility of each Company Personnel to read and become familiar with the principles set out in the Code and the following Company policies and to integrate them into every aspect of the business of the Company:
- Whistleblower Policy
- Disclosure Policy
- Insider Trading Policy
- Confidential Information Policy
- Anti-Corruption and Bribery Policy
(The above policies and the Code collectively referred to herein as the “Company Policies”). Note that although not every individual Company Personnel is considered an “insider”, any Company Personnel with Company or client non-public material information (as defined in the Insider Trading Policy) is prohibited by law from trading in Morneau Shepell securities or client securities, as the case may be, and must comply with the Insider Trading Policy.
All Company Policies can be found on the Company’s intranet or provided to you by your manager or the Human Resources Department.
Annually all directors, officers and employees are asked to acknowledge that they are familiar with the Company Policies and confirm their adherence to them.
Management annually reports to the board of directors of the Company (the “Board”), or one of its Committees, on the annual employee confirmation of adherence to the Code.
Failure to comply with the Code, other Company Policies or applicable laws and regulations may be grounds for disciplinary action up to and including termination of employment or other relationship with the Company, may require restitution and may lead to civil or criminal action against individual Company Personnel and any company involved. If Company Personnel find themselves in a situation that they believe may violate or lead to a violation of this Code, they should follow the guidelines described below under “Compliance Procedures”.
Compliance with Laws, Rules and Regulations
The Company is subject to a number of laws, rules and regulations with respect to the conduct of its business. Obeying the law, both in letter and in spirit, is the foundation on which the Company s ethical standards are built and is critical to our reputation and continued success. All Company Personnel must respect and obey the laws of the various jurisdictions in which the Company operates and avoid even the appearance of impropriety. Although not all Company Personnel are expected to know the details of these laws, it is important to know enough to determine when to seek advice from your manager or other senior personnel. The General Counsel of the Company or a designate in the Company’s legal department is available to assist Company Personnel in determining applicable legal requirements and to seek the advice of external legal counsel where appropriate.
The Code does not purport to address all areas of the law that Company Personnel might encounter in the day-to-day business of the Company. The following areas however, should be specifically noted:
- Human Rights Laws, Discrimination and Harassment: The diversity of Company Personnel is a tremendous asset. The Company is firmly committed to providing equal opportunity in all aspects of employment and other forms of work. All Company Personnel have a responsibility for maintaining acceptable standards of personal behaviour and for ensuring that others have the opportunity to carry out their work assignments in a businesslike atmosphere free from harassment and discrimination on any of the following grounds: race, ethnicity, political affiliation, religion, gender, sexual orientation, age, marital and family status or disability. Any form of harassment or discrimination is prohibited.
Examples include derogatory comments based on racial or ethnic characteristics and unwelcome sexual advances. Violence and threatening behavior are not permitted. Company Personnel are encouraged to speak with either Human Resources or the General Counsel of the Company when a co-worker’s conduct makes them uncomfortable and to report harassment when it occurs. The Company will not tolerate any conduct that is discriminatory or harassing or otherwise compromises an individual’s human rights.
- Health and Safety Laws: The Company strives to provide all Company Personnel with a safe and healthy work environment. All Company Personnel have responsibility for maintaining a safe and healthy workplace by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions to a supervisor or department head. Impairment in the workplace will not be tolerated, whether by drugs or alcohol, including prescription drugs (including medical marijuana), illegal use, recreational use, or otherwise.
- Securities Laws: The Company is committed to protecting securityholder investments and expects Company Personnel to comply with the applicable reporting obligations and trading restrictions imposed by the Company, any security commission or stock exchanges. Company Personnel who are in possession of material information about the Company must not trade in securities of the Company until such information is generally publically available. Providing inside information to others who then trade on such information is also strictly prohibited. Company Personnel should make themselves familiar and comply, where applicable, with the Company’s Insider Trading Policy and Disclosure Policy.
- Competition Laws: Competition laws are enacted to limit practices that are seen to impair the function of free and open marketplace. A complete description of these laws is beyond the scope of this Code, however they include price fixing, bid rigging, price discrimination, and boycotting certain suppliers or clients. Company Personnel having regular dealings with clients and suppliers should become familiar with these laws as non-compliance can result in severe penalties imposed on both the Company and the individual involved. Please see the section below on Competition and Fair Dealing for more information.
- Professional and Industry Standards: Company Personnel are required to comply with internal policies and procedures, relevant laws and regulations and rules of professional conduct and standards of practice established by outside professional and industry organizations, including the Canadian Institute of Actuaries, the International Society of Certified Employee Benefit Specialists and Professional Counselling Associations.
Conflicts of Interest
A “conflict of interest” exists when a person’s private interests or activities interfere in any way with the interests of the Company. A conflict of interest can arise when Company Personnel take actions or have interests that may make it difficult for them to perform their work for the Company objectively and effectively. Conflicts of interest also may arise when Company Personnel or members of their families receive improper personal benefits as a result of their positions with the Company.
All Company Personnel are required to act objectively, in the best interests of the client without bias that may benefit the Company or the Company Personnel. It is imperative that the Company avoid the perception of, or actual conflicts of interest between the Company and the client, the Company and Company Personnel, or the client and Company Personnel.
The Company respects the right to privacy in the personal activities and financial affairs of Company Personnel however it is the responsibility of each Company Personnel to ensure that his or her personal conduct complies with the following principles, which are not intended to address every potential conflict situation.
- Employment or other Affiliation with a Competitor, Supplier or Client: Company Personnel may not compete with the Company directly or indirectly which includes acting as directors, officers, employees, consultants or agents of entities that compete directly with the business of the Company without the approval of the Governance and Nominating Committee of the Board. Company Personnel owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises. Company Personnel shall notify the Company on an annual basis through an automated process coordinated by the Human Resources Department if they are acting as directors or officers of outside companies, non-profits or other organizations, including those that are clients and suppliers of the Company.
- Independent Business Ventures: Company Personnel may not engage in independent business ventures or agree to perform services for other businesses if the activity will interfere with the Company Personnel’s devotion of time and effort to the conduct of the business of the Company or otherwise affect his or her ability to work effectively. Company Personnel are prohibited from taking for themselves personal opportunities that are discovered through the use of corporate property, information or positions without the consent of the Board and from using corporate property, information or positions for improper personal gain.
- Personal Benefits, Gifts, Entertainment, Bribes and Kickbacks: As set out in the Company’s Anti - Corruption and Bribery Policy, Company Personnel may not use their position as Company Personnel to derive or secure any personal, financial or other benefit for themselves or their relatives.
Business gifts and entertainment are customary courtesies designed to build goodwill and constructive relationships among business partners. These courtesies may include such things as meals and beverages, tickets to sporting or cultural events, discounts not available to the general public, accommodation and other merchandise or services. In some cultures, they play an important role in business relationships. However, a problem may arise when these courtesies compromise, or appear to compromise, the Company’s ability to make fair and objective business decisions or could result in the Company gaining an unfair advantage.
Offering or receiving any gift, gratuity or entertainment that might be perceived to unfairly influence a business relationship should be avoided. These guidelines apply at all times and do not change during traditional gift-giving seasons.
No gift or entertainment should ever be offered, given, provided, authorized or accepted by any Company Personnel or their family members unless it is not a cash gift, is consistent with customary business practices, is not excessive in value, cannot be construed as a bribe, kickback or payoff and does not violate any laws. Strict rules apply when the Company does business with governmental agencies and officials (as discussed in more detail below). Company Personnel should discuss with their manager or department head any gifts or proposed gifts about which they have any questions.
Company Personnel are expected to comply with the principles set out in this Code as well as the standards set out in the Company’s Anti-Corruption and Bribery Policy. Although the principles above refer only to Company Personnel, Company Personnel should also exercise care to avoid actual or potential conflicts of interest that may arise because of the activities of their immediate family members and other members of their household.
- Payments to Government Personnel: As set out in the Company’s Anti-Corruption and Bribery Policy all Company Personnel must comply with all laws prohibiting improper payments to domestic and foreign officials. Other governments have laws regarding business gifts that may be accepted by government personnel. The promise, offer or delivery to an official or employee of various governments of a gift, favour or other gratuity in violation of these laws would not only violate the Company’s policies but could also be a criminal offence. Illegal payments should not be made to government officials of any country. The General Counsel of the Company or a designate from the Company’s legal department can provide guidance to Company Personnel in this area.
- Reporting a Conflict: Conflicts of interest are prohibited as a matter of policy, except as may be approved by the Board. Conflicts of interest may not always be clear-cut. If you have a question, you should consult with your manager or department head. Any Company Personnel who become aware of a conflict or potential conflict should bring it to the attention of a manager or department head and consult the procedures described below under “Compliance Procedures”. Any conflict or potential conflicts of interest involving a director or executive officer should be disclosed directly to the chair of the Board.
Company Personnel who have access to confidential information are not permitted to use or share that information for trading purposes or for any other purpose except the conduct of Company business. All Company Personnel should read and abide by the Company’s Confidential Information Policy, Disclosure Policy and Insider Trading Policy.
Company Personnel are required to respect the confidential and personal information obtained about clients and their employees or plan members, suppliers, the Company’s business including operations, strategic plans, financial affairs and trade secrets, and/or employees of the Company. As well, they are required to actively ensure that all confidential and personal information is protected from access by others and is not used for any purpose, other than that for which it is given.
Protection and Proper Use of the Company Assets
All Company Personnel should endeavor to protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the profitability of the Company. Any suspected incident of fraud or theft should be reported immediately to a manager or other appropriate personnel in a superior position for investigation.
The obligation of Company Personnel to protect the assets of the Company includes the Company’s proprietary information. Proprietary information includes any information that is not known generally to the public or would be helpful to competitors of the Company. Examples of proprietary information include intellectual property (such as trade secrets, patents, trademarks and copyrights), business, marketing and service plans, designs, databases, software, hardware, formulae, algorithms, concepts, inventions, processes, know-how, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Company policy and could be illegal and result in civil or criminal penalties. The obligation to preserve the confidentiality of proprietary information continues even after Company Personnel cease to have a relationship with the Company.
For clarity, all information technology software, programs and systems are the property of the Company, and are to be used only for business purposes. The Company’s assets may never be used for illegal purposes.
Competition and Fair Dealing
The Company seeks to excel and to outperform any competitors fairly and honestly through superior performance and not through unethical or illegal business practices. Taking or using confidential or proprietary information without the owner’s consent or inducing disclosure of that information from current or past Company Personnel is prohibited. Company Personnel shall respect the rights of, and deal fairly with, the Company’s competitors and persons with whom the Company has a business relationship. No Company Personnel shall take unfair advantage of anyone through illegal conduct, manipulation, concealment, abuse of confidential or proprietary information, misrepresentation of material facts or any other intentional unfair-dealing practice. Nor shall any Company Personnel act in a manner that may be anti-competitive under anti‑trust laws. The General Counsel of the Company or a designate from the Company’s legal department is available to assist Company Personnel in determining the application of those laws and to seek the advice of external legal counsel where appropriate.
Overall, Company Personnel are required to behave with respect and integrity in all their activities, and to be forthright, fair and honourable in dealings with clients, colleagues and business associates.
The Company will not tolerate modern slavery in its labour force or supply chains. Modern slavery can take many forms including slavery, servitude, forced or compulsory labour and human trafficking. The Company is committed to taking appropriate steps to tackle modern slavery, and will monitor its labour force and supply chains to identify and rectify any areas of concern in this regard, which may include terminating business relationships with organizations that knowingly engages in practices that may constitute modern slavery. Company Personnel are expected to assist in this monitoring in a manner appropriate to their role and must report actual or suspected incidents of modern slavery of which they become aware in the Company or within its supply chain as provided under the heading “Duty to Report any Illegal or Unethical Behaviour”.
The Company is subject to strict securities rules regarding disclosure of financial and other material information to the public. Selective disclosure of confidential information by Company Personnel can create liabilities for the Company and for that individual. All discussions about the Company in a public environment should comply with the Disclosure Policy and the Confidential Information Policy, to which Company Personnel should refer to for further details. Management of the Company has the general responsibility for preparing securities filings and such other communications and should ensure such filings and communications of the Company comply with all applicable laws, rules and regulations. Company Personnel must provide all necessary information to management when requested and must inform management if they become aware that any information in any such filing or communication was untrue or misleading at the time such filing or communication was made or if they have information that would affect any filings or communications to be made in the future.
Accuracy of Records and Reporting
The Company requires honest and accurate recording and reporting of information to make responsible business decisions. The Company’s accounting records are relied upon to produce reports for management, directors, securityholders, governmental agencies and persons with whom the Company does business. All of the Company’s financial statements and the books, records and accounts on which they are based must appropriately reflect the Company’s activities and conform to applicable legal, accounting and auditing requirements and to the Company’s system of internal controls. Unrecorded or “off the books” funds or assets should not be maintained unless required by applicable law or regulation.
All Company Personnel have a responsibility, within the scope of their positions, to ensure that the Company’s accounting records do not contain any false or intentionally misleading entries. The Company does not permit intentional misclassification of transactions as to accounts, departments or accounting records. All transactions must be supported by accurate documentation in reasonable detail and recorded in the proper accounts and in the proper accounting period. Company Personnel must comply with the Whistleblower Policy if they suspect any fraudulent behaviour in the recording or reporting activities of the Company.
Many Company Personnel use business expense accounts, which must be documented and recorded accurately. If Company Personnel are not sure whether a certain expense is legitimate, a manager or other senior personnel can provide advice. General rules and guidelines are outlined in the Travel and Expense Management Policy.
Business records and communications often become public through legal or regulatory proceedings or the media. Company Personnel should avoid exaggeration, derogatory remarks, guesswork or inappropriate characterizations that can be misunderstood. This requirement applies equally to communications of all kinds, including e‑mail, informal notes, internal memos and formal reports.
Waivers of the Code
Any waiver of this Code for directors or executive officers may be made only by the Board (or a committee of the Board to whom that authority has been delegated) and will be promptly disclosed as required by law or stock exchange regulation.
Duty to Report any Illegal or Unethical Behaviour
The Company has a strong commitment to the conduct of its business in a lawful and ethical manner and Company Personnel who know of, or suspect, a violation of this Code or of any applicable law, rule or regulation have an obligation to immediately report this information. Company Personnel are encouraged to talk to managers or to appropriate personnel in a superior position when in doubt about the best course of action in a particular situation. The Company has adopted a Whistleblower Policy to assist in this regard. It is the policy of the Company not to allow retaliation for reports of misconduct by others made in good faith. It is, at the same time, unacceptable to file a report knowing that it is false. All Company Personnel are expected to cooperate in internal investigations of misconduct.
All Company Personnel must work to ensure prompt and consistent action against violations of this Code. However, in some situations it is difficult to know right from wrong. Since the Company cannot anticipate every situation that will arise, it is important that Company Personnel have a way to approach a new question or problem. These are the steps to keep in mind:
- Make sure you have all the facts. In order to reach the right solutions, we must be as fully informed as possible.
- Ask yourself: What specifically am I being asked to do? Does it seem unethical or improper? This will help you to focus on the specific question you are faced with and the alternatives you have. Use your judgment and common sense - if something seems like it might possibly be unethical or improper, it probably is.
- Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.
- Discuss the problem with your manager. This is the basic guidance for all situations. In many cases, your manager will be more knowledgeable about the question and will appreciate being brought into the decision-making process. Remember that it is your manager’s responsibility to help solve problems.
- Seek help from company resources. In the rare case where it may not be appropriate to discuss an issue with your manager or where you do not feel comfortable approaching your manager with your question, discuss it locally with other senior personnel. If that is not appropriate for any reason, contact either the General Counsel, the Chief Financial Officer or the Chief Executive Officer, or follow the avenues set out in the Company Whistleblower Policy.
- You may report ethical violations in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, your anonymity will be protected. The Company does not permit retaliation of any kind against Company Personnel for good faith reports of ethical violations.
- Always ask first, act later: If you are unsure of what to do in any situation, seek guidance before you act.