The following code of business ethics was adopted by the board of directors of Morneau Shepell Inc. (the “Company”) effective January 1, 2011.
This Code of Business Conduct and Ethics 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, and employees of the Company, and its subsidiaries (collectively, “Company Group Personnel”). All Company Group Personnel must conduct themselves accordingly and seek to avoid even the appearance of improper behaviour. Furthermore, all Company Group 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.
If a law conflicts with a policy in this Code, the Company Group Personnel must comply with the law. If a local custom or policy conflicts with this Code, the Company Group Personnel must comply with this Code. If you have any questions about these conflicts, you should ask a senior officer of the Company on how to handle the situation. The Company is responsible for administering this Code and the Chief Executive Officer of the Company is the designated contact person for any questions regarding the Code.
THE COMPANY GROUP PERSONNEL WHO VIOLATE THE STANDARDS IN THIS CODE WILL BE SUBJECT TO DISCIPLINARY ACTION, UP TO AND INCLUDING TERMINATION OF THEIR EMPLOYMENT OR OTHER RELATIONSHIP WITH THE COMPANY OR ITS SUBSIDIARIES, IF ANY (COLLECTIVELY, ‘THE COMPANY GROUP’). If you are in a situation that you believe may violate or lead to a violation of this Code, follow the guidelines described below under “Compliance Procedures”.
Compliance with laws, rules and regulations
Obeying the law, both in letter and in spirit, is the foundation on which the Company Group’s ethical standards are built and is critical to our reputation and continued success. All Company Group Personnel must respect and obey the laws of the various jurisdictions in which the Company Group operate and avoid even the appearance of impropriety. Although not all Company Group Personnel are expected to know the details of these laws, it is important to know enough to determine when to seek advice from executive members or other appropriate personnel. The Chief Executive Officer of the Company is available to assist the Company Group Personnel in determining applicable legal requirements and to seek the advice of legal counsel where appropriate.
Specifically, all Company Group 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 and the International Society of Certified Employee Benefit Specialists.
Conflicts of interest
A “conflict of interest” exists when a person’s private interests interfere in any way with the interests of the Company Group. A conflict of interest can arise when the Company Group Personnel take actions or have interests that may make it difficult for them to perform their work for a Company Group entity objectively and effectively. Conflicts of interest also may arise when the Company Group Personnel or members of their families receive improper personal benefits as a result of their positions with a Company Group entity.
All Company Group Personnel are required to act objectively, in the best interests of the client without bias that may benefit the Company Group or the employee. It is imperative that the Company avoid the perception of, or actual conflicts of interest between the Company Group and the client, the Company Group and an employee, or the client and an employee.
Conflicts of interest are prohibited as a matter of policy, except as may be approved by the board of directors of the Company. Conflicts of interest may not always be clear‐cut. If you have a question, you should consult with your supervisor or department head. Any Company Group Personnel who become aware of a conflict or potential conflict should bring it to the attention of a supervisor or department head and consult the procedures described below under “Compliance Procedures”.
Company Group Personnel must maintain the confidentiality of confidential information entrusted to them by any Company Group and persons with whom the Company Group do business, except when disclosure is authorized under the Confidential Information Policy or required by laws or regulations. Confidential information includes all nonpublic information that might be of use to competitors or harmful to any Company Group entity or the person to whom it relates if disclosed. The obligation to preserve the confidentiality of confidential information continues even after the Company Group Personnel cease to have a relationship with the Company Group.
Company Group 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 the Company Group’s business. All Company Group Personnel should read and abide by the Company Confidential Information Policy, Disclosure Policy and Insider Trading Policy.
Company Group Personnel are required to respect the confidential and personal information obtained about clients and their employees or plan members, the Company Group business, and/or employees of the Company Group. 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 for which it is given.
Company Group Personnel are prohibited from taking for themselves personally opportunities that are discovered through the use of corporate property, information or positions without the consent of the board of directors and from using corporate property, information or positions for improper personal gain.
Company Group Personnel may not compete with any Company Group entity directly or indirectly. Company Group Personnel owe a duty to each Company Group entity to advance its legitimate interests when the opportunity to do so arises.
Protection and proper use of the company group assets
All Company Group Personnel should endeavor to protect the Company Group’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the profitability of the Company Group. Any suspected incident of fraud or theft should be reported immediately to your supervisor or department head for investigation.
The obligation of the Company Group Personnel to protect the assets of the Company Group includes the Company Group’s proprietary information. Proprietary information includes any information that is not known generally to the public or would be helpful to competitors of any Company Group. Examples of proprietary information include intellectual property (such as trade secrets, patents, trademarks and copyrights), business, marketing and service plans, designs, databases, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate the Company Group’s policy and could be illegal and result in civil or criminal penalties. The obligation to preserve the confidentiality of proprietary information continues even after the Company Group Personnel cease to have a relationship with the Company Group.
As well, all information technology software, programs and systems are the property of the Company Group, and are to be used only for business purposes. The Company Group’s assets may never be used for illegal purposes.
Competition and fair dealing
The Company Group seeks to excel and to outperform any competitors fairly and honestly through superior performance and not through unethical or illegal business practices. Taking proprietary information without the owner’s consent, inducing disclosure of that information by past or present employees of other persons or using that information is prohibited. The Company Group Personnel should respect the rights of, and deal fairly with, the Company Group’s competitors and persons with whom the Company Group has a business relationship. No Company Group Personnel should take unfair advantage of anyone through illegal conduct, manipulation, concealment, abuse of proprietary information, misrepresentation of material facts or any other intentional unfair‐dealing practice. Nor should any Company Group Personnel act in a manner that may be anticompetitive under anti‐trust laws. The Chief Executive Officer of the Company is available to assist the Company Group Personnel in determining the application of those laws and to seek the advice of legal counsel where appropriate.
Overall, the Company Group Personnel are required to behave with respect and integrity in all their activities – to be forthright, fair and honourable in dealings with clients, colleagues and business associates.
Gifts and entertainment
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 Group’s ability to make fair and objective business decisions or gain 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 Group 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 or payoff and does not violate any laws. Strict rules apply when a Company Group entity does business with governmental agencies and officials (as discussed in more detail below). Company Group Personnel should discuss with their supervisor or department head any gifts or proposed gifts about which they have any questions.
Payments to government personnel
All Company Group 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 Group’s policies but could also be a criminal offence. Illegal payments should not be made to government officials of any country. The Chief Executive Officer of the Company can provide guidance to the Company Group Personnel in this area.
Discrimination and harassment
The diversity of the Company Group Personnel is a tremendous asset. The Company Group is firmly committed to providing equal opportunity in all aspects of employment. All Company Group 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 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 Group 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.
Health and safety
The Company Group strives to provide all Company Group Personnel with a safe and healthy work environment. All Company Group 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.
Being under the influence, and the possession, of illegal drugs in the workplace will not be tolerated. Company Group Personnel should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol.
Accuracy of records and reporting
The Company Group requires honest and accurate recording and reporting of information to make responsible business decisions. The Company Group’s accounting records are relied upon to produce reports for management, directors, managers, securityholders, governmental agencies and persons with whom the applicable Company Group entity does business. All of the Company Group’s financial statements and the books, records and accounts on which they are based must appropriately reflect the Company Group’s activities and conform to applicable legal, accounting and auditing requirements and to the Company Group’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 Group Personnel have a responsibility, within the scope of their positions, to ensure that the Company Group’s accounting records do not contain any false or intentionally misleading entries. The Company Group 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.
Many Company Group Personnel use business expense accounts, which must be documented and recorded accurately. If the Company Group Personnel are not sure whether a certain expense is legitimate, a supervisor or department head can provide advice. General rules and guidelines are available from the Chief Financial Officer of the Company.
Business records and communications often become public through legal or regulatory proceedings or the media. The Company Group 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 directors (or a committee of the board of directors to whom that authority has been delegated) and will be promptly disclosed as required by law or stock exchange regulation.
Reporting any illegal or unethical behavior
The Company Group has a strong commitment to the conduct of its business in a lawful and ethical manner. The Company Group Personnel are encouraged to talk to supervisors, managers or other appropriate personnel about observed illegal or unethical behavior and 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 Group 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 Group Personnel are expected to cooperate in internal investigations of misconduct.
All Company Group 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 we cannot anticipate every situation that will arise, it is important that the Company Group 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 your “two‐up”. If that is not appropriate for any reason, contact either 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 Group does not permit retaliation of any kind against employees 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.
All directors, officers, and employees are asked to read this policy annually and confirm their adherence to it. Management annually reports to the board of directors of the Company, or its governance committee, if any, on the annual employee confirmation of adherence to the Code.