Corporate Governance
Calissio Resources: STATEMENT OF CORPORATE GOVERNANCE PRACTICES
Calissio Resources has embraced the following corporate governance practices:
1. Stewardship of the Company
The goal of the Company is to create shareholder value through the development of its mining properties, firstly at the Jovita Mine in Michoacan Mexico and then in the rest of North America.
The Board of Directors has the responsibility for the stewardship of the Company, which includes oversight of the operation of the Company and to supervise management.
Every Board director is part of the process of establishing policies for the Company and its operations.
(a) The Strategic Planning Process. The Board participates in strategic planning by considering and, if deemed appropriate, adopting plans proposed and developed by management, with management having the primary responsibility for developing a strategic plan.
(b) Risk Management. The Board considers the risks inherent in the mining industry and receives periodic assessments from management as to these risks and the Company's strategies to manage these risks.
(c) Succession Planning. The Board reviews the personnel needs of the Company from time to time, having particular regard to succession issues relating to senior management. The Board appoints the President, Chief Executive Officer and Chairman, as well as the Audit Committee members and officers each year at its first meeting of Directors immediately following the Annual General Meeting.
(d) Communications Policy. The Board assesses from time to time how effectively the Company communicates with shareholders, and has a Corporate Disclosure Policy. The Company meets or exceeds all requirements to disseminate material information in a timely manner.
(e) Integrity of Internal Control. The Board, through the Audit Committee assesses the adequacy of the Company's internal control systems. This process is undertaken on an annual basis. The Audit Committee also reviews and assesses the financial statements on a quarterly basis and reviews annually the Corporate Disclosure.
2. Independence of the Board
When Calissio concludes all of the appointments, the Board will have four directors. Due to the entrepreneurial nature of the Company, and the current evolution of the Company's development, makes it appropriate for the Board to be expanded from the present of two to a total of four Directors. The current Board of Directors believes that when weighed against the resulting increase in cost to the Company and possible reduction in the efficiency with which decisions are made, it would not be warranted to significantly increase the size of the Board to any more than four Directors in total.
3. Nominating Committee
The Board has not created a nominating committee to suggest new nominees to the Board and for assessing directors' performance because the Company is too small to justify a formal process. The Board as a whole will discuss potential candidates for the Board, particularly during the preparation of the Annual General Meeting Information Letter.
4. Assessing the Board's Effectiveness
The Board has not formed a committee to determine the effectiveness of the Board as whole or in part, however, the Board as a whole has responsibility for ensuring the effective operation of the Board.
5. Orientation and Education of Directors
Calissio does not have a formal process of orientation and education for new members of the Board. All Board members currently have considerable mining sector experience.
6. Compensation of Directors
Board members are not presently compensated in their capacity as a director although they are reimbursed for expenses incurred in connection with their service. Compensation will be given to the existing Board members of Calissio when revenue from operations is sufficient.
7. The Audit Committee
The Audit Committee meets each quarter to review the interim financials and meets at least on one occasion, and more if necessary, to review the year end financials. The Audit Committee reviews the Company's annual consolidated financial statements and interim financial statements before the board approves them.
8. Approach to Corporate Governance
The Board of Directors has taken the responsibility for developing the Company's view to governance issues and responding to governance guidelines.
9. Position Descriptions
At this time Calissio has not formally developed position descriptions for the Board and the Chief Executive Officer, however, the Board is satisfied that senior management is fully aware of their responsibilities and those matters that are within their scope of duties.
10. Board Independence
In view of the present size of Calissio, with management representation on the Board, and the nature of its business, it is essential that those having an intimate knowledge of the Company's operations be present during important Board discussions. Notwithstanding the foregoing, when Calissio's current board of directors has been fully expanded from the existing two members to four in total, if at that time, the Board believed it was appropriate and meaningful; it would formalize a process whereby the Board could meet without management present at the meeting.
11. Ethical Business Conduct
The Board has adopted a Code of Business Conduct and Ethics. A copy of the Code and Policy can be found on the Calissio's website.
When Calissio's Board is fully expanded to four members there will be appointed a Compliance Officer who is responsible for investigating and resolving all reported complaints and allegations concerning violations of the Code of Business Conduct. The Compliance Officer has direct access to the Audit Committee and the Board and the Compliance Officer is required to report to the Board at least semi- annually regarding matters of compliance activity.
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