Corporate governance has become increasingly important to all businesses, regardless of their industry. Although ethical concerns in the financial services sector have sometimes been undermined by a focus on profit, the corporate governance debate has grown louder as the societal impact of corporations has grown, touching on issues such as the purpose of business, the role of board members and shareholder rights.
In 2018, Canadian payment services provider Interac completed a corporate reorganisation process that brought its product development and research arm, Acxsys, and its non-profit entity dealing with transactions, Interac Association, under a single for-profit brand. The restructuring promises significant changes to the firm’s governance structure. World Finance spoke to the company’s corporate governance team about what the amalgamation means for the future.
Interac’s board members bring their industry insights, business experience and individual perspectives to bear while acting together in the best interests of shareholders
How has Interac’s reorganisation affected its governance structure and approach to corporate governance?
As a result of the amalgamation, Interac now has a hybrid board of directors that consists of four independent directors, eight nominee directors and our president and CEO. Our board members bring their industry insights, business experience and individual perspectives to bear while acting together in the best interests of our shareholders, forging a new path that reinforces the position of Interac as an agile, forward-thinking leader in the evolving payments ecosystem. To maximise the efficiency and effectiveness of our board operations, five board committees and a board-level advisory committee were established in 2018.
While our approach to corporate governance continues to embody the principles of transparency, integrity and accountability, the 2018 reorganisation allows us to create more strategic value for our investors – and the broader community – with a more flexible and well-rounded governance framework that follows the best industry practices.
What is the mandate of the corporate governance team and what kind of role does it play in elevating the organisation?
The corporate governance team’s mandate is to establish the frameworks that promote good governance. As part of this, we implement effective policies, programmes and mechanisms, work in collaboration with the board and management to ensure the company operates ethically and responsibly, and maintain open lines of communication.
Further, we provide comprehensive reporting to clients and shareholders, buttressing all of the above with corporate programmes and initiatives that elevate the corporate profile.
How does Interac instil shareholder confidence and generate shareholder value in the absence of a stock price?
Interac’s history as a cooperative venture among major financial institutions is core to the organisation’s robust corporate governance model. Shareholder value is generated and sustained by way of ensuring open lines of communication and sharing information through various channels, including annual general meetings, corporate governance reports and a digital portal for comprehensive and timely reporting.
Interac’s corporate programmes and contributions to the community at large drive shareholder value and enhance brand reputation
The organisation’s corporate programmes and contributions to the community at large also drive shareholder value and enhance brand reputation. These channels operate in parallel with board-level advisory committees, which allow management to skilfully balance the diverse perspectives of shareholders when seeking out high-value opportunities, including complementary and strategic acquisitions.
The corporate secretariat oversees effective and transparent communication between the board, management and shareholders, and, in cooperation with various other departments across the organisation, works to ensure our institutional investors – and others who might be interested in the company’s viability and financial stability – remain informed.
As a privately held company, how does Interac exhibit best corporate governance practices?
We strive to put ourselves on par with publicly traded companies’ corporate governance practices by providing comprehensive reporting that is reliable, consistent and transparent. As such, we adopt an integrated approach to corporate governance with clearly defined protocols, mechanisms and published policies to ensure a strong, viable culture of transparency, integrity and accountability at every level of the organisation.
At the board level, for example, we have a governance committee that oversees the organisation’s corporate governance matters, business conduct and ethics. At the corporate level, we have five divisions under the corporate governance umbrella (investor relations, board operations, ombudsman, enterprise compliance, and diversity and inclusion) that form the operational foundation of our activities. Relevant policies and practices are reviewed annually – at the very least – to enhance our governance structure and practices in the evolving corporate governance environment.
In what way does Interac ensure and protect the rights of minority shareholders?
By encouraging effective communication between Interac’s board, management and shareholders, our corporate governance team aims to increase transparency and foster positive development that aligns with our shareholders’ interests. While we have implemented a variety of tools to enhance all of our shareholders’ experiences, we have also put certain governance practices in place to ensure the views of our diverse shareholder body are heard.
By encouraging effective communication between Interac’s board, management and shareholders, our corporate governance team aims to increase transparency
One way we’ve done this is through the establishment of our board advisory committee, which comprises 10 of Interac’s smaller clients. This committee meets twice a year and is a forum dedicated to soliciting the views of our minority shareholders on a variety of topics, including product development and strategic infrastructure activities. In turn, views expressed at this committee are reported to our board of directors, ensuring that the views expressed by our smaller shareholders are heard at the highest level of our management.
What were Interac’s key corporate governance accomplishments in 2019?
In 2019, we established two additional service-level advisory committees to boost our organisation’s expansive client engagement service and enhanced our enterprise compliance function through a mandatory enterprise-wide training programme, which was customised to address specific business needs. Moreover, we introduced annual business unit self-assessments, respondent interviews and executive attestations, as well as a successful annual compliance assessment for the organisation.
The formalisation of our investor relations function through the launch of new information channels, including a virtual data room, detailed shareholder reporting and an annual meeting, should also improve transparency. Meanwhile, the establishment of the ombudsman’s office, which successfully works with cross-functional teams both internally and externally, served as a vital resource in conflict management in 2019, coordinating resolutions for several issues raised by the public while fielding inquiries from members of parliament and other government bodies.
The corporate governance team at Interac comprises Kikelomo Lawal, Chief Legal Officer, Ombudsman and Corporate Secretary; Victoria Seth, Senior Legal Counsel and Assistant Corporate Secretary; Isabel Lee, Head of Enterprise Compliance; Saleha Ali, Legal Counsel and Senior Governance Advisor; Isabelle Hon-Lee, Corporate Governance Lead; Genna Vonasek, Corporate Governance Senior Specialist; and Aziza Ibrahim, Executive Assistant, Corporate Secretariat.