Corporate Governance

Statement of Corporate Governance

1. Corporate Governance Practices

The board of directors (the “Board”) of Turquoise Hill Resources Ltd. (the “Corporation”) considers good corporate governance an important factor in the continued and long-term success of the Corporation and in maximizing shareholder value over time. As a corporation listed on the Toronto Stock Exchange (the “TSX”), the Corporation is subject to Canadian securities requirements and the rules and policies of the TSX relating to corporate governance.

As a foreign private issuer listed on the New York Stock Exchange (the “NYSE”) and the Nasdaq Capital Market (“Nasdaq”), the Corporation is not required to comply with most of the NYSE standards relating to corporate governance (the “NYSE Rules”) and the Nasdaq requirements relating to corporate governance (the “Nasdaq Rules”), and instead may comply with domestic requirements. The Corporation believes that its corporate governance practices comply in most respects with the NYSE and Nasdaq Rules and generally do not differ from those followed by U.S. companies under such rules. To the extent required by applicable law, rule, regulation or policy of an exchange, the Corporation will disclose any significant differences between its corporate governance practices and the NYSE Rules and Nasdaq Rules in its public filings.

The Corporation continues to review its corporate governance practices to ensure compliance with all of the applicable requirements under Canadian securities legislation and regulations and with the disclosure and listing requirements of the TSX, as well as applicable U.S. securities legislation and regulations, including the U.S. Sarbanes-Oxley Act of 2002 and the NYSE Rules and Nasdaq Rules.

2. Board of Directors

The Board of the Corporation is currently composed of seven members, a majority of whom are independent directors within the meaning of Canadian securities legislation, and the NYSE Rules and Nasdaq Rules.

The Board has responsibility for supervising the conduct of the Corporation’s affairs and the management of its business, with the objective of increasing shareholder value. The Board fulfills its mandate through direct oversight, setting policy, appointing committees of the Board, discharging their respective mandates, and appointing the CEO. The Board takes all reasonable measures to ensure that policies and processes are in place for identifying principal business risks and opportunities for the Corporation, addressing the extent to which such risks are acceptable to the Corporation, and requiring management to establish appropriate systems to manage those risks.

The Corporation expects its directors to commit sufficient time and effort to the Corporation’s business. The directors are expected to attend all board meetings and review in advance all meeting materials. The Board also ensures that prospective directors understand the role of the Board and its committees and the contribution that individual directors are expected to make, including, in particular, the commitment of time and energy that the Corporation expects of its directors.

a. Conflicts of Interest

Board members are regularly asked to disclose any conflict or potential conflict of interest prior to Board meetings. A director’s conflict or potential conflict is recorded in the minutes of the meeting and the director is required to abstain from voting on any resolution in respect of that matter. In particular, in relation to any agreements entered into between Rio Tinto and the Corporation, decisions are made solely by the independent directors of the Corporation.

b. Majority Voting

The Board has adopted a policy providing that in an uncontested election of directors, any nominee who receives a greater number of votes “withheld” or “abstained” than votes “for” will tender his or her resignation to the board promptly following the meeting of shareholders at which the director is elected. The Board will accept such resignation, except in exceptional circumstances, and announce such decision in a press release to be issued within 90 days following the meeting of Shareholders. The director who offered to tender his or her resignation pursuant to this policy will not participate in any committee or Board deliberations and decisions pertaining to the resignation offer.

c. Annual Performance Evaluation of the Board

The Nominating and Corporate Governance Committee oversees the process for assessing the effectiveness of the Board as a whole, the committees of the Board, and the contribution of individual directors. The Nominating and Corporate Governance Committee has developed and regularly updates an annual assessment process for the Board, each of its committees, and the contribution of individual directors. Directors complete Board and committee assessments.

The Nominating and Corporate Governance Committee and the Board review the completed questionnaires. As part of this evaluation process, directors also complete self-assessments which assess matters including skills and experience, preparation, attendance, accountability, communication, and contribution to strategic planning.

d. Director Compensation

In accordance with its charter, the Compensation and Benefits Committee reviews and makes recommendations to the Board on an annual basis with respect to the adequacy and form of the compensation for non-executive directors, taking into account the responsibilities and risks involved and the importance of not compromising the directors’ independence. It also determines fees payable to members of any ad hoc committees established by the Board.

e. Director Orientation and Continuing Education

The charter of the Nominating and Corporate Governance Committee provides that this committee is responsible for developing and maintaining orientation and continuing education programs for directors. The Corporation encourages and directors attend appropriate continuing education activities, including seminars, conferences, and industry forums. Directors have full access to the Corporation’s records and are encouraged to communicate with management, auditors and technical consultants to assist them in maintaining the skills and knowledge necessary to meet their obligations as directors; to keep themselves current with industry trends and developments and changes in legislation with management’s assistance; and to attend related industry seminars.

f. Retention of Independent Advisors

In performing its responsibilities, the Board or any committee of the Board may, as required and subject to advising the Chairman of the Board, engage an outside advisor for advice and assistance at the expense of the Corporation.

g. Direct Access to Management

Members of the Board have full access to the management of the Corporation. In addition, the Board encourages management to address the Board in those instances where a manager’s expertise and assistance can enhance the Board’s understanding of a particular issue under its consideration.

h. Management Succession

The Board is responsible for overseeing the existence of appropriate mechanisms regarding succession planning for the Corporation’s senior management. It chooses the Chief Executive Officer of the Corporation (the “CEO”) in agreement with its controlling shareholder. The Board oversees the succession plans for the CEO in agreement with the Corporation’s controlling shareholder.

i. Code of Business Conduct

The board has adopted a Code of Business Conduct that governs the behaviour of the Corporation’s directors, officers, contractors, suppliers and employees.

j. Complaints Regarding Auditing and Accounting Matters

Complaints from non-employees about accounting, internal accounting controls or auditing matters can be confidentially and anonymously submitted to EthicsPoint, an independent firm providing confidential and anonymous “hotline” reporting, by calling 1.866.384.4277 or through the Corporation’s website. The Corporation prohibits retaliatory action against any employee who, in good faith, reports a possible violation.

k. Communication with the Chairman of the Board

Shareholders and other interested parties may communicate confidentially with the Chairman of the Board or with non-management directors as a group by mail at Suite 354 - 200 Granville Street, Vancouver, British-Columbia, Canada V6C 1S4. Communications received in this manner will be processed in accordance with procedures approved by the Board’s independent directors.

3. Board Committees

From time to time, the Board may delegate certain tasks to its committees. However, such delegation does not relieve the Board of its overall responsibilities. The Corporation has an Audit Committee, a Compensation and Benefits Committee, a Nominating and Corporate Governance Committee and a Health, Safety and Environment Committee, and has adopted formal charters for each of its committees. These charters describe the responsibilities delegated to each committee.

a. Audit Committee

The primary objective of the Audit Committee is to act as a liaison between the Board and the Corporation’s independent auditors and internal auditors and to assist the Board in fulfilling its oversight responsibilities with respect to: (a) the accounting and financial reporting processes of the Corporation, including the integrity of the financial statements and other financial information provided by the Corporation to its shareholders, the public and others; (b) the Corporation’s compliance with legal and regulatory requirements; (c) the audit of the Corporation’s financial statements; (d) the qualifications, independence and performance of the independent auditors; (e) the Corporation’s risk management and internal financial and accounting controls, and management information systems, including the performance of the Corporation’s internal audit function; and (f) such other matters as shall be mandated under applicable laws, rules and regulations.

Each member of the Audit Committee must be financially literate, independent and at least one member must have accounting or related financial experience and be an audit committee financial expert. In determining whether or not a director is independent, financially literate or is an audit committee financial expert, the Board follows the applicable Canadian and U.S. securities legislation and regulations, as well as the NYSE Rules and Nasdaq Rules.

Because of the Audit Committee’s demanding roles and responsibilities, the mandate of such committee provides that no member of the Audit Committee may serve simultaneously on the audit committees of more than three public companies, including the Corporation, unless the Board of directors of the Corporation determines that such simultaneous service would not limit or impair the ability of such members to effectively serve on the Audit Committee. The basis for such determination is disclosed as required by law or stock exchange regulation. In addition, directors that are chief executive officers or other senior executives of public corporations, should hold no more than two public corporation directorships (including the Corporation’s Board), and other directors should hold not more than five public corporation directorships (including the Corporation’s Board).

b. Compensation and Benefits Committee

The primary objective of the Compensation and Benefits Committee is to assist the Board in discharging its responsibilities relating to compensation of the executive officers and directors of the Corporation.

c. Nominating and Corporate Governance Committee

The primary objective of the Nominating & Corporate Governance Committee is to assist the Board in fulfilling its oversight responsibilities by (a) identifying individuals qualified to become Board and Board committee members and recommending that the Board select director nominees for appointment or election to the Board; (b) developing and recommending to the Board corporate governance guidelines for the Corporation and making recommendations to the Board with respect to corporate governance practices; (c) recommending such permanent or ad hoc committees as it deems necessary for the purposes of assisting in the corporate governance of the Corporation; and (d) addressing such other matters as shall be mandated under applicable laws, rules and regulations.

d. Health, Safety and Environment Committee

The Health, Safety and Environment Committee assists the Board in fulfilling its oversight responsibilities by ensuring the Corporation has established appropriate practices with respect to health, safety and environmental matters affecting the Corporation.

The Corporation has a Health, Safety and Environment (“HSE”) Policy that affirms its commitment to protecting the environment and to safeguarding the health, safety and welfare of all employees, contractors and communities who are affected by the Corporation or its subsidiaries. The Corporation is dedicated to performing its duties in a safe, environmentally responsible and effective manner.

4. Amendment

These guidelines will be annually reviewed by the Board and may be amended from time to time.

Board Mandate

1. Purpose

The Board of Directors (the “Board”) of Turquoise Hill Resources Ltd. (the “Corporation”) shall have the oversight responsibility, authority and specific duties as described below.

From time to time, the Board may delegate certain tasks to its committees. However, such delegation does not relieve the Board of its overall responsibilities.

This Mandate will be reviewed periodically by the Board of Directors of the Corporation and modified as required from time to time.

2. Organization of the Board of Directors

(a) Size

Minimum of three (3) and maximum of fourteen (14), as provided for in the articles of the Corporation.

(b) Independence

The Board is constituted with a majority of individuals who qualify as independent directors, as determined by the Board.

(c) Director Compensation

The Board shall establish guidelines for determining the form and amount of director compensation, upon recommendation of the Compensation and Benefits Committee.

(d) Assessment

The Nominating and Corporate Governance Committee annually supervises the performance assessment of individual directors, the Board as a whole, the Board committees, and the Board and committee chairs.

3. Meetings of the Board of Directors

The quorum at any meeting of the Board is a majority of directors in office. The Board holds regular annual and quarterly meetings. The Board also meets on an ad hoc basis as required, generally by means of telephone conferencing facilities. Meetings of the Board shall be called by the chair or a majority of the directors of the Board.

The Board chair develops the agenda for each meeting of the full Board in consultation with the CEO. The agenda and the appropriate material are provided to directors of the Corporation on a timely basis prior to any meeting of the Board. Each director shall review all Board meeting materials in advance of each meeting, shall make all reasonable efforts to attend all Board and Board committee meetings, and is expected to take an active part in Board decisions.

The agenda for each regularly scheduled and ad hoc Board meeting will include as standing items at the end of each meeting: i) an in camera session of the full Board separate from management and ii) an in camera session of the independent directors separate from management. Additional meetings of independent directors may be held from time to time in order to discuss any related party transaction or matters which pertain to the controlling shareholder.

4. The Role of the Board of Directors

Specific responsibilities of the Board include, but are not limited to, the following:

(a) With respect to strategic planning

  • Establishing with management significant corporate plans and strategic initiatives.
  • Reviewing and approving, on at least an annual basis, the Corporation’s strategic plans, which take into account, among other things, the opportunities and risks of the business, and adopting a strategic planning process and monitoring the Corporation’s performance.
  • Taking all reasonable measures to ensure that policies and processes are in place for identifying principal business risks and opportunities for the Corporation, addressing the extent to which such risks are acceptable to the Corporation, and ensuring that appropriate systems are in place to manage risks.

(b) With respect to financial matters and internal control

  • Reviewing and approving the annual and quarterly capital and operating plans and budgets.
  • Reviewing and approving significant deviations from the capital and operating plans and budgets.
  • Overseeing the integrity and quality of the Corporation’s financial statements and approval of their disclosure.
  • Reviewing the general content of, and the Audit Committee’s report on the financial aspects of, the Corporation’s Management Discussion & Analysis, information circulars, annual information forms, annual reports, offering memorandums and prospectuses, and other documents required to be disclosed or filed by the Corporation and approving same for public disclosure and filing with regulatory authorities.
  • Approving material investments, dispositions and joint ventures, and approving any other major initiatives outside the scope of approved operating plans and budgets.
  • Approving the issuance of any securities of the Corporation.
  • Approving the incurrence of any debt by the Corporation outside the ordinary course of business.
  • Determining dividend policies and procedures, if applicable.
  • Taking all reasonable measures to ensure that policies and processes are in place to ensure the integrity of the Corporation’s internal control, financial reporting and management information systems.
  • Instructing the Corporation’s representatives on the Oyu Tolgoi Operating Committee and the Oyu Tolgoi Technical Committee on their votes on matters to be decided during those committee meetings.
  • Reviewing periodically the Corporation’s communications policy and monitoring the Corporation’s communications with analysts, investors and the public.

(c) With respect to human resources and performance assessment

  • Reviewing and approving the Corporation’s incentive compensation plans.
  • Appointing the CEO in agreement with its controlling shareholder.
  • Monitoring the performance of the CEO and succession plans for the CEO in agreement with the Corporation’s controlling shareholder and, with the advice of the Compensation and Benefits Committee, approving the compensation of the CEO.
  • Monitoring the performance of senior management and succession plans for senior management in agreement with the Corporation’s controlling shareholder and, with the advice of the Compensation and Benefits Committee, approving the compensation of senior management.
  • Overseeing labour and human resources policies.

(d) With respect to director nominations and corporate governance matters

  • Nominating the candidates for the Board to the shareholders, based on recommendations from the Nominating and Corporate Governance Committee.
  • Taking all reasonable measures to satisfy itself as to the integrity of management and that management creates a culture of integrity throughout the Corporation.
  • Reviewing, on a regular basis, appropriate corporate governance structures and procedures, including the identification of decisions requiring approval of the Board and, where appropriate, measures for receiving stakeholder feedback, and the adequate public disclosure thereof.
  • Determining the composition, structure, processes, and characteristics of the Board and the terms of reference of committees of the Board, and establishing a process for monitoring and evaluating the performance of the Board, its committees and its directors on an ongoing basis.
  • Enhancing succession planning at the Board level by requiring directors to offer their resignation to the chair of the Nominating and Corporate Governance Committee upon reaching twelve (12) years of service on the Board, for consideration by the Board in its absolute discretion. In exercising this discretion, the Board takes into consideration the skills, background and diversification requirements of the Corporation’s future strategic initiatives.
  • Taking reasonable steps to ensure the ability of each candidate to make the commitment of time necessary to be a director of the Corporation, including the application of the following guidelines when considering candidates to become directors of the Corporation or continued membership on the Board: (a) for candidates that are chief executive officers or other senior executives of public corporations, individuals should hold no more than two (2) public corporation directorships (including the Corporation’s Board), and (b) for other candidates, individuals should hold not more than five (5) public corporation directorships (including the Corporation’s Board).
  • Reviewing and approving, at its discretion, any outside directorships proposed to be held by any executive officer of the Corporation.
  • Appointing Board committees and delegating to any such committees powers of the Board as appropriate and legally permissible.
  • Ensuring an appropriate orientation and education program for directors is provided.
  • Monitoring the ethical conduct of the Corporation and ensuring that it complies with applicable legal and regulatory requirements as well as adopting and reviewing, on a regular basis, the Corporation’s Code of Business Conduct, applicable to the Corporation’s directors, its CEO, its financial officers and its other officers and employees and monitoring compliance with such code.
  • Reviewing this Mandate and other Board policies and charters for Board committees in place from time to time and proposing modifications as applicable based on the recommendation of the Nominating and Corporate Governance Committee.
  • Taking all reasonable measures to ensure that appropriate policies and processes are in place to ensure the Corporation’s compliance with applicable laws and regulations, including timely disclosure of relevant corporate information and regulatory reporting.
  • Ensuring that the directors have direct access to management and, as necessary and appropriate, independent advisors.
  • Ensuring evaluations of the Board, Board committees and Directors are carried out at least annually.
  • Approving the Corporation’s Management Information Circular and Annual Information Form based on the recommendations of the Nominating and Corporate Governance Committee, the Audit Committee and the Compensation and Benefits Committee.

(e) With respect to health, environment, safety and communities

  • Overseeing the adoption and review of environmental policies and procedures.
  • Taking all reasonable measures to ensure safety and security throughout the operations of the Corporation based on the recommendation of the Health, Safety, Environment and Communities Committee.
  • Taking all reasonable measures to ensure that appropriate management reporting and control systems are in place to monitor the status of compliance with the Corporation’s health, safety, environmental and communities policies, as well as applicable laws and regulations in the areas of health, safety, environment and communities based on the recommendation of the Health, Safety Environment and Communities Committee.
  • Assessing the adequacy of the Corporation’s remedial actions following the identification of areas of concern with respect to health, safety, environmental and/or communities matters.
  • Reviewing the systems and controls in place to ensure appropriate scoping, estimating and accounting for environmental costs.

5. Retention of Independent Advisors

In performing its responsibilities, the Board may, as required and subject to advising the chair of the Board, engage an outside advisor for advice and assistance at the expense of the Corporation.

6. Additional

Note that the Corporation is subject to the requirements set forth in the following agreements which may affect the above:

  • The Private Placement Agreement dated October 18, 2006 among the Corporation and Rio Tinto International Holdings Limited;
  • The Heads of Agreement dated December 8, 2010 among the Corporation and Rio Tinto International Holdings Limited;
  • The Memorandum of Agreement dated April 17, 2012 among the Corporation, Rio Tinto International Holdings Limited and Rio Tinto South East Asia Limited, as amended pursuant to an Amending Agreement dated May 22, 2012;
  • The Memorandum of Agreement dated August 23, 2013 among the Corporation, Rio Tinto International Holdings Limited and Rio Tinto South East Asia Limited, as amended pursuant to an Amending Agreement dated November 14, 2013; and The Financing Support Agreement dated December 15, 2015 among the Corporation and Rio Tinto plc.
  • Nothing contained in this mandate is intended to expand applicable standards of conduct under statutory, regulatory or exchange requirements for the directors of the Corporation or the members of the Board committees.

Nothing contained in this mandate is intended to expand applicable standards of conduct under statutory, regulatory or exchange requirements for the directors of the Corporation or the members of the Board committees.

Policy Regarding Diversity

1. DEFINITIONS

“Board” means the Company’s board of directors.

“Company” means Turquoise Hill Resources Ltd.

“Executive Officer” means an individual who is (a) a chair, vice-chair or president, (b) a chief executive officer or chief financial officer, (c) a vice-president in charge of a principal business unit, division or function, or (d) performing a policy making function at the Company.

“Policy” means this policy regarding diversity on the Board and in Executive Officer positions.

2. PURPOSE

This Policy sets forth the Company’s approach to achieving and maintaining diversity on its Board and in Executive Officer positions, with a specific emphasis on gender diversity.

3. POLICY STATEMENT

The Company is of the view that Board member and Executive Officer appointment decisions should be based on merit and remains committed to selecting the best person to fulfill these roles. At the same time, the Company recognizes that diversity is important to ensure that the profiles of Board members and Executive Officers provide the necessary range of perspectives, experience and expertise required to achieve effective stewardship and management.

In an increasingly complex global marketplace, the ability to draw on a wide range of viewpoints, backgrounds, skills, and experience is critical to the Company’s success. By bringing together men and women from diverse backgrounds and giving each person the opportunity to contribute their skills, experience and perspectives in an inclusive workplace, the Company believes that it is better able to develop solutions to challenges and deliver sustainable value for the Company and its stakeholders. The Company considers diversity to be an important attribute of a well-functioning Board and an efficient team of Executive Officers, and will assist the Company to achieve its goal of becoming a leading mining company in its sector.

For the purposes of Board composition and composition of the team of Executive Officers, diversity includes, but is not limited to, gender, ethnicity, aboriginal status, physical disabilities and age. In particular, the Company recognizes that gender diversity is a significant aspect of diversity and acknowledges the important role that women play in contributing to the diversity of perspective on the Board and in Executive Officer positions.

4. BOARD APPOINTMENTS

The Board’s Nominating and Corporate Governance Committee is responsible for recommending qualified persons for Board nominations that possess the competencies, skills, business and financial experience, leadership and level of commitment required of a director to fulfill Board responsibilities. Diversity of directors is considered in assessing the skills matrix of the Board. The Nominating and Corporate Governance Committee recognises that the evolution of the mix of skills and diversity is a long-term process and weighs the various factors relevant to board balance and diversity when vacancies arise. With respect to Board nominees appointed by Rio Tinto, the Company’s majority shareholder, the Nominating and Corporate Governance Committee coordinates with Rio Tinto to review the qualifications of its nominees prior to a final selection being made.

In the process of searching for qualified persons to serve on the Board, the Nominating and Corporate Governance Committee strives for the inclusion of diverse groups, knowledge, and viewpoints. To accomplish this, the Nominating and Corporate Governance Committee may retain an executive search firm to help meet the Board’s diversity objectives.

In connection with its efforts to create and maintain a diverse Board, the Nominating and Corporate Governance Committee:

  • develops recruitment protocols that seek to include diverse candidates in any director search. These protocols take into account that qualified candidates may be found in a broad array of organizations, including academic institutions, privately held businesses, non-profit organizations and trade associations, in addition to the traditional candidate pool of corporate directors and officers;
  • strives to use, to their fullest potential, the current network of organizations and trade groups that may help identify diverse candidates;
  • periodically reviews Board recruitment and selection protocols to ensure that diversity remains a component of any director search; and
  • in order to support the specific objective of gender diversity, considers the level of representation of women on the Board and will seek to include women in the short list of candidates being considered for a Board position.

5. MECHANISMS OF BOARD RENEWAL

Director term limits have been adopted to ensure Board renewal, as described in the Company’s Board Mandate, as amended, and disclosed in the Company’s Management Information Circular.

6. EXECUTIVE OFFICER APPOINTMENTS

In fulfilling its role, the person or committee of the Board in charge of the nomination of Executive Officers:

  • considers candidates that are highly qualified based on their experience, education, expertise, personal qualities, and general and sector-specific knowledge;
  • reviews potential candidates from a variety of backgrounds and perspectives, with the Company’s diversity objectives in mind including, without limiting the generality of the foregoing, the specific objective of gender diversity; and
  • considers the level of representation of women in Executive Officer positions when making Executive Officer appointments and will seek to include women in the short list of candidates being considered for a Board position.

7. ANNUAL REVIEW

On an annual basis, the Nominating and Corporate Governance Committee:

  • assesses the effectiveness of the nomination process at achieving the Company’s diversity objectives outlined in this Policy;
  • measures the annual and cumulative progress in achieving its gender diversity objectives; and
  • monitors the implementation of this Policy.

8. DISCLOSURE OF POLICY

The Company discloses in its Management Information Circular, among other things:

  • a short summary of the Policy’s objectives and key provisions;
  • the measures taken to ensure that the Policy has been effectively implemented;
  • annual and cumulative progress in achieving the Policy’s objectives;
  • whether, and if so how, the Board or its Nominating and Corporate Governance Committee measures the effectiveness of the Policy;
  • how the Board or its Nominating and Corporate Governance Committee considers the level of representation of women on the Board in identifying and nominating candidates for election or re-election to the Board;
  • how the person or committee of the Board in charge of nominations considers the level of representation of women in Executive Officer positions when making Executive Officer appointments;
  • a description of the Company’s policy on mandatory retirement age, term limits or other mechanisms of Board renewal;
  • whether the Company has adopted a target regarding women on the Board and, if not, the reasons why it has not done so;
  • whether the Company has adopted a target regarding women in Executive Officer positions and, if not, the reasons why it has not done so;
  • the number and proportion (in percentage terms) of directors on the Board who are women; and
  • the number and proportion (in percentage terms) of Executive Officers of the Company, including all major subsidiaries of the Company (as such term is defined in Section 1.1 of National Instrument 58 101 Disclosure of Corporate Governance Practices), who are women.

This Policy will be published on the Company’s website for public information.

Majority Voting Policy

1. On March 22, 2013, the Board of Directors of the Corporation (the “Board”) adopted a “majority voting” policy, pursuant to which if a nominee for election as a director of the Corporation receives a greater number of votes “withheld” or “abstained” than votes “for”, with respect to the election of directors by shareholders, he or she will be expected to offer to tender his or her resignation to the Board promptly following the meeting of shareholders at which the director is elected.

2. Upon receiving such resignation, the Nominating & Corporate Governance Committee will consider such resignation and make a recommendation to the Board whether or not to accept it, provided however, that the resignation will be accepted absent exceptional circumstances.

3. The Board will make its decision as to whether or not to accept the resignation(s) in question based upon the recommendation of the Nominating and Corporate Governance Committee and announce such decision in a press release to be issued within 90 days following the meeting of shareholders. A copy of such press release shall be provided to the Toronto Stock Exchange. If the Board determines not to accept the resignation(s), the press release shall state the reasons for such decision.

4. The director who offered to tender his or her resignation should not participate in any committee or Board deliberations and decisions pertaining to the resignation offer.

5. A resignation tendered pursuant to this policy shall be effective upon its acceptance by the Board.

6. This policy only applies in circumstances involving an uncontested election of directors. An “uncontested election of directors” means that the number of director nominees is the same as the number of directors to be elected to the Board and that no proxy material is circulated in support of one or more nominees who are not part of the candidates proposed by the Corporation’s management and supported by the Board.

7. Subject to any corporate law restrictions, in the case where the Board accepts the offer of resignation of a director and such director resigns, the Board may leave the resultant vacancy unfilled until the next annual meeting of shareholders. It may also choose to fill the vacancy through the appointment of a new director whom the Board considers to merit the confidence of the shareholders. It may further decide to call a special meeting of shareholders at which there will be presented a new candidate to fill the vacant position.

Committee Charters

1. Charter of Audit Committee

1. Purpose

The primary objective of the Audit Committee (the “Committee”) of Turquoise Hill Resources Ltd. (the “Corporation”) is to act as a liaison between the Board of Directors of the Corporation (the “Board”) and the Corporation’s independent auditors (the “Auditors”) and to assist the Board in fulfilling its oversight responsibilities with respect to: (a) the accounting and financial reporting processes of the Corporation, including the integrity of the financial statements and other financial information provided by the Corporation to its shareholders, the public and others, (b) the Corporation’s compliance with legal and regulatory requirements, (c) the audit of the Corporation’s financial statements, (d) the qualifications, independence and performance of the Auditors, (e) the Corporation’s risk management and internal financial and accounting controls, and management information systems, including the performance of the Corporation’s internal audit function, and (f) such other matters as shall be mandated under applicable laws, rules and regulations.

2. Organization of the Audit Committee

The Committee shall consist of three or more directors and shall satisfy the independence, financial literacy, expertise and financial experience requirements of applicable securities laws, stock exchanges and any other regulatory requirements. The members of the Committee shall be appointed by the Board on the recommendation of the Nominating and Corporate Governance Committee and serve at the pleasure of the Board.  A majority of the members of the Committee shall constitute a quorum.

Members of the Committee must be financially literate as the Board interprets such qualification in accordance with applicable Canadian and U.S. securities legislation and regulations, as well as the New York Stock Exchange (“NYSE”) standards relating to corporate governance and Nasdaq Capital Market (“Nasdaq”) standards relating to corporate governance.

No member of the Committee may serve simultaneously on the audit committees of more than three public companies, including the Corporation, unless the Board determines that such simultaneous service would not limit or impair the ability of such members to effectively serve on the Committee.  The basis for such determination shall be disclosed as required by law or stock exchange regulation.

The Committee has at all times a direct line of communication with the internal auditors and the Auditors.

Meetings of the Audit Committee

The Committee shall meet as many times as the Committee deems necessary to carry out its duties effectively, but not less frequently than four times per year.  The Committee will meet with management, the Corporation’s internal auditors and the Auditors in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately. Meetings shall be called by the chair of the Committee or by a majority of the members of the Committee.

The Board, or failing such selection, the members of the Committee, shall select a chair who will preside at each meeting of the Committee.

The chair of the Committee shall ensure that the agenda for each upcoming meeting of the Committee is circulated to each member of the Committee on a timely basis in advance of such meeting.

The Corporation’s internal auditors shall attend any meeting when requested to do so by the chair of the Committee.

4. Responsibilities of the Committee

The Committee shall have the following responsibilities:

(a) With respect to the Auditors

  • Be directly responsible for the appointment, compensation, retention (including termination) and oversight of the work of any independent registered public accounting firm engaged by the Corporation (including for the purposes of preparing or issuing an audit report or performing other audit, review or attestation services or other work for the Corporation and including the resolution of disagreements between management and the Corporation’s independent registered public accounting firm regarding financial reporting) and ensure that such firm shall report directly to it; recommend to the Board the independent auditors to be nominated for appointment as Auditors of the Corporation at the Corporation’s annual meeting, the remuneration to be paid to the Auditors for services performed during the preceding year; and recommend to the Board and the shareholders the termination of the appointment of the Auditors, if and when advisable. The Committee shall have the sole authority to determine the terms of engagement and the extent of funding necessary (and to be provided by the Corporation) for payment of compensation to the Auditors retained to advise the Committee and ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
  • Review the Auditor’s audit plan with the Auditor and management and approve the scope, extent and schedule of such audit plan.
  • Evaluate on an annual basis the performance of the Auditors, including the lead audit partner.
  • Take reasonable steps to confirm the independence of the Auditors, which include:
    • Reviewing the annual written statement of the Auditors regarding all of their relationships with the Corporation and other engagements that may reasonably be thought to bear on the independence of the Auditors, and discussing any relationships or services that may impact on their objectivity or independence;
    • Approving and overseeing the disclosure of all audit services provided by the external advisors to the Corporation or any of its subsidiaries, pre-approving all non-audit services provided by the Auditors and, exceptionally, approving and overseeing the disclosure of permitted non-audit services to be performed by the Auditors; and
    • As necessary, taking or recommending that the Board take appropriate action to oversee the independence of the Auditors.
  • Review and approve any disclosures required to be included in periodic reports under applicable securities laws, rules and regulations and stock exchange and other regulatory requirements with respect to non-audit services.
  • Consider the tenure of the lead audit partner on the engagement in light of applicable securities laws, stock exchange or applicable regulatory requirements.
  • Review all reports required to be submitted by the Auditors to the Committee under applicable securities laws, rules and regulations and stock exchange or other regulatory requirements.
  • Review and approve policies for the hiring of employees, partners, former employees or former partners of the Auditors or the Corporation’s former independent auditors.

(b) With respect to accounting and financial reporting

  • Review and discuss with management, the financial and accounting officer(s) and the Auditors, the Corporation’s annual audited financial statements and accompanying notes, the Auditors’ report thereon and the related press release, including disclosures made in management’s discussion and analysis, and obtain explanations from management on all significant variances with comparative periods, prior to recommending approval by the Board and the release thereof.
  • Review and discuss with management, the financial and accounting officer(s) and the Auditors, the Corporation’s interim and annual financial statements (and the interim or annual profit or loss press release associated therewith), management’s discussion and analysis and the Auditor’s review thereof, before recommending the approval by the Board and the release thereof.
  • Be satisfied that adequate procedures are in place for the review and approval, if required, of the Corporation’s disclosure of financial information extracted or derived from the Corporation’s financial statements and periodically assess the adequacy of these procedures.
  • Review with management and the Auditors the quality and not just the acceptability of the Corporation’s accounting policies and any changes that are proposed to be made thereto, including: (i) all critical accounting policies and practices used, (ii) any alternative treatments of financial information that have been discussed with management, the ramification of their use and the Auditors’ preferred treatment, and (iii) any other material communications with management with respect thereto, and reviewing the disclosure and impact of contingencies and the reasonableness of the provisions, reserves and estimates that may have a material impact on financial reporting.
  • Discuss with the Auditors the matters required to be discussed by applicable auditing standards requirements relating to the conduct of the audit.
  • Discuss with management and the Auditors major issues regarding accounting principles used in the preparation of the Corporation’s financial statements, including any significant changes in the Corporation’s selection or application of accounting principles.  Review and discuss analyses prepared by management and/or the Auditors setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative approaches under generally accepted accounting principles.
  • Review the Corporation’s Annual Information Form and Form 40-F and recommend these for approval by the Board.

With respect to risk management and internal controls

  • Take all reasonable measures to ensure that management has designed and implemented effective systems of risk management and internal controls and, at least annually, review the effectiveness of the implementation of such systems.  In consultation with the Auditors and the internal audit group, review the adequacy of the Corporation’s internal controls and its procedures designed to ensure compliance with laws and regulations, and any special audit steps adopted in light of material control deficiencies.
  • Establish procedures for (a) the receipt, retention and treatment of complaints received by the Corporation with respect to any matter, including accounting, internal accounting controls or auditing matters and (b) the confidential, anonymous submission by employees of the Corporation of concerns respecting any aspect of the Corporation’s business, including questionable accounting or auditing matters.

(d) With respect to the internal auditors

  • Monitor the qualifications of the internal auditors.
  • Maintain a direct report relationship with the internal auditors and review: (i) the internal control reports prepared by management, including management’s assessment of the effectiveness of the Corporation’s internal control structure and procedures for financial reporting; and (ii) the performance of the internal auditors on an annual basis.
  • Discuss with management, the internal auditors and the Auditors any changes in internal control over financial reporting considered for disclosure in the Corporation’s public filings.
  • Review the internal audit plan periodically and monitor its execution.

(e) With respect to the Committee

  • Review and assess annually its own performance and the adequacy of this Charter and recommend to the Nominating and Corporate Governance Committee any changes to this Charter deemed appropriate by the Committee.

In fulfilling its duties and responsibilities under this Charter, the Committee will be entitled to reasonably rely on (a) the integrity of those persons within the Corporation and of the professionals and experts (such as the Auditors) from which it receives information, (b) the accuracy of the financial and other information provided to the Committee by such persons, professionals or experts, and (c) the representations made by the Auditors as to any services provided by it to the Corporation.

5. Reporting

The chair of the Committee reports regularly to the Board on the business of the Committee as well as at such time and in such manner as the Board may otherwise require.

The Committee shall review with the full Board any issues that have arisen with respect to the quality or integrity of the Corporation’s financial statements, the Corporation’s compliance with legal or regulatory requirements, the performance or independence of the Auditors or the performance of the Corporation’s financial and accounting group.

6. Retention of Independent Advisors

In performing its responsibilities, the Committee may, as required and subject to advising the chairman of the Board, engage an outside advisor for advice and assistance at the expense of the Corporation.

7. Additional

  • Note that the Corporation is subject to the requirements set forth in the following agreements which may affect the above:
  • The Private Placement Agreement dated October 18, 2006 among the Corporation and Rio Tinto International Holdings Limited;
  • The Heads of Agreement dated December 8, 2010 among the Corporation and Rio Tinto International Holdings Limited;
  • The Memorandum of Agreement dated April 17, 2012 among the Corporation, Rio Tinto International Holdings Limited and Rio Tinto South East Asia Limited, as amended pursuant to an Amending Agreement dated May 22, 2012;
  • The Memorandum of Agreement dated August 23, 2013 among the Corporation, Rio Tinto International Holdings Limited and Rio Tinto South East Asia Limited, as amended pursuant to an Amending Agreement dated November 14, 2013; and
  • The Financing Support Agreement dated December 15, 2015 among the Corporation and Rio Tinto plc.

Nothing contained in this Charter is intended to expand applicable standards of conduct under statutory, regulatory or exchange requirements for the directors of the Corporation or the members of the Committee.

2. Charter of Nominating & Corporate Governance Committee

1. Purpose

The primary objective of the Nominating & Corporate Governance Committee (the “Committee”) of Turquoise Hill Resources Ltd. (the “Corporation”) is to assist the Board of Directors of the Corporation (the “Board”) in fulfilling its oversight responsibilities by (a) identifying individuals qualified to become Board and Board committee members and recommending that the Board select director nominees for appointment or election to the Board; (b) developing and recommending to the Board corporate governance guidelines for the Corporation and making recommendations to the Board with respect to corporate governance practices; (c) recommending such permanent or ad hoc committees as it deems necessary for the purposes of assisting in the corporate governance of the Corporation; and (d) addressing such other matters as shall be mandated under applicable laws, rules and regulations.

2. Organization of the Committee

The Committee shall consist of three or more directors and shall satisfy the independence requirements of applicable securities laws, stock exchanges and any other regulatory requirements. The members of the Committee shall be appointed by the Board on the recommendation of the Committee and serve at the pleasure of the Board. All members shall have a working familiarity with corporate governance practices. A majority of the members of the Committee shall constitute a quorum.

3. Meetings of the Committee

The Committee shall meet as many times as the Committee deems necessary to carry out its duties effectively, but not less frequently than three times per year.  Meetings shall be called by the chair or a majority of the members of the Committee.

The Board, or failing such selection, the members of the Committee, shall select a chair who will preside at each meeting of the Committee. The chair shall be an independent director.

The chair of the Committee shall ensure that the agenda for each upcoming meeting of the Committee is circulated to each member of the Committee on a timely basis in advance of such meeting.

4. Responsibilities of the Committee

The Committee shall have the following responsibilities:

(a) With respect to Board composition and succession planning

  • Examine the size and composition of the Board and committees of the Board and recommend adjustments from time to time to ensure that the Board and its committees are of a size and composition that facilitates effective decision making.
  • Identify and assess the necessary and desirable competencies and characteristics, including as to director independence and diversity, for Board membership and regularly assess the extent to which those competencies and characteristics are represented on the Board.
  • Identify individuals qualified to become members of the Board in a manner consistent with the criteria approved by the Board and make recommendations to the Board for the appointment or election of director nominees.
  • Make recommendations to the Board with respect to membership on committees of the Board.
  • Regularly review the time required from non-executive directors to perform their functions and assess whether they are satisfying those time requirements.
  • Ensure succession plans are in place to maintain an appropriate balance of skills on the Board and periodically review those plans.
  • Receive comments from all directors as to the Board’s performance, oversee the execution of a process assessing the effectiveness of the Board as a whole, the Board committees, Board and committee chairs, and the contribution of individual directors.

Assist the Board in determining whether individual directors have material relationships with the Corporation that may interfere with their independence, as provided under applicable regulatory requirements.

(b) With respect to corporate governance matters

  • Develop for approval by the Board, monitor and oversee the disclosure of appropriate corporate governance structures and procedures, including the identification of decisions requiring approval of the Board and, where appropriate, measures for receiving feedback from the shareholders.
  • Develop for approval by the Board, monitor and oversee the disclosure of a Code of Business Conduct applicable to the Corporation’s directors, officers, contractors, suppliers and employees, and review and approve any change of the foregoing.
  • Review the Corporation’s Management Information Circular and, with respect to corporate governance disclosure, the Annual Information Form and recommend these for approval by the Board.
  • Review at least annually the Corporation’s diversity policy and recommend to the Board any changes deemed appropriate by the Committee.
  • Advise the Board on the Corporation’s engagement with shareholders and other stakeholders.
  • Ensure that the Board has appropriate structures and procedures so that the Board can function with the proper degree of independence from management.
  • Establish induction programmes for new directors.
  • Develop and maintain continuing education programmes for directors.
  • Review any proposed changes to the Corporation’s articles and by-laws as such documents relate to corporate governance matters.
  • Reviewing periodically the mandate of the Board and charters of its committees.
  • Review the adequacy of this Charter and recommend to the Board any changes to this Charter deemed appropriate by the Committee.

5. Reporting

The chair of the Committee reports regularly to the Board on the business of the Committee as well as at such time and in such manner as the Board may otherwise require.

6. Retention of Independent Advisors

In performing its responsibilities, the Committee may, as required and subject to advising the chairman of the Board, engage an outside advisor for advice and assistance at the expense of the Corporation.

7. Additional

Note that the Corporation is subject to the requirements set forth in the following agreements which may affect the above:

  • The Private Placement Agreement dated October 18, 2006 among the Corporation and Rio Tinto International Holdings Limited;
  • The Heads of Agreement dated December 8, 2010 among the Corporation and Rio Tinto International Holdings Limited;
  • The Memorandum of Agreement dated April 17, 2012 among the Corporation, Rio Tinto International Holdings Limited and Rio Tinto South East Asia Limited, as amended pursuant to an Amending Agreement dated May 22, 2012;
  • The Memorandum of Agreement dated August 23, 2013 among the Corporation, Rio Tinto International Holdings Limited and Rio Tinto South East Asia Limited, as amended pursuant to an Amending Agreement dated November 14, 2013; and
  • The Financing Support Agreement dated December 15, 2015 among the Corporation and Rio Tinto plc.

Nothing contained in this Charter is intended to expand applicable standards of conduct under statutory, regulatory or exchange requirements for the directors of the Corporation or the members of the Committee.

3. Charter of Health, Safety, Environment & Communities Committee

1.    Purpose

The Health, Safety, Environment and Communities Committee (the “Committee”) of Turquoise Hill Resources Ltd. (the “Corporation”) assists the Board of Directors of the Corporation (the “Board”) in fulfilling its oversight responsibilities by ensuring the Corporation has established appropriate practices with respect to sustainable development matters affecting the Corporation in the following areas: health, safety, environment and relationships with communities.

2.    Organization of the Committee

The Committee shall consist of three or more directors, at least one of whom shall satisfy the independence requirements of applicable securities laws, stock exchanges and any other regulatory requirements.

The members of the Committee shall be appointed by the Board on the recommendation of the Nominating and Corporate Governance Committee and serve at the pleasure of the Board. A majority of the members of the Committee shall constitute a quorum.

3.    Meetings of the Committee

The Committee shall meet as many times as the Committee deems necessary to carry out its duties effectively, but not less frequently than three times per year.  Meetings shall be called by the chair or a majority of the members of the Committee.

The Board, or failing such selection, the members of the Committee, shall select a chair who will preside at each meeting of the Committee. 

The chair of the Committee shall ensure that the agenda for each upcoming meeting of the Committee is circulated to each member of the Committee on a timely basis in advance of such meeting.

4.    Responsibilities of the Committee

The Committee shall have the following responsibilities:

  • Take all reasonable measures to ensure that appropriate health, safety, environmental and communities’ policies are in place and review and recommend, as appropriate, changes to such policies.
  • Take all reasonable measures to ensure that appropriate management reporting and control systems are in place to monitor the status of compliance with the Corporation’s health, safety, environmental and communities’ policies, as well as applicable laws and regulations in the areas of health, safety, environment and communities.
  • Assess the adequacy of the Corporation’s remedial actions following the identification of areas of concern with respect to health, safety, environmental and/or communities’ matters.
  • Review and assess management recommendations with respect to health, safety, environment and communities’ industry trends and recommendations for improvement of the Corporation’s health, safety, environmental and communities policies and procedures.
  • Take all reasonable measures to ensure that appropriate employee training standards and communications are developed.
  • Review the systems and controls in place to ensure appropriate scoping, estimating and accounting for environmental costs.
  • Review and assess annually its own performance and the adequacy of this Charter and recommend to the Nominating and Corporate Governance Committee any changes to this Charter deemed appropriate by the Committee.

5.    Reporting

The chair of the Committee reports regularly to the Board on the business of the Committee as well as at such time and in such manner as the Board may otherwise require.

6.    Retention of Independent Advisors

In performing its responsibilities, the Committee may, as required and subject to advising the chairman of the Board, engage an outside advisor for advice and assistance at the expense of the Corporation.

7.    Additional

  • Note that the Corporation is subject to the requirements set forth in the following agreements which may affect the above:
  • The Private Placement Agreement dated October 18, 2006 among the Corporation and Rio Tinto International Holdings Limited;
  • The Heads of Agreement dated December 8, 2010 among the Corporation and Rio Tinto International Holdings Limited; and
  • The Memorandum of Agreement dated April 17, 2012 among the Corporation, Rio Tinto International Holdings Limited and Rio Tinto South East Asia Limited, as amended pursuant to an Amending Agreement dated May 22, 2012;
  • The Memorandum of Agreement dated August 23, 2013 among the Corporation, Rio Tinto International Holdings Limited and Rio Tinto South East Asia Limited, as amended pursuant to an Amending Agreement dated November 14, 2013; and
  • The Financing Support Agreement dated December 15, 2015 among the Corporation and Rio Tinto plc.

Nothing contained in this Charter is intended to expand applicable standards of conduct under statutory, regulatory or exchange requirements for the directors of the Corporation or the members of the Committee.

4. Charter of Compensation & Benefits Committee

1. Purpose

The primary objective of the Compensation and Benefits Committee (the “Committee”) of Turquoise Hill Resources Ltd. (the “Corporation”) is to assist the Board of Directors of the Corporation (the “Board”) in discharging its responsibilities relating to compensation of the executive officers and directors of the Corporation.

2. Organization of the Committee

The Committee shall consist of three or more directors and shall satisfy the independence and experience requirements of applicable securities laws, stock exchanges and any other regulatory requirements. Members of the Committee shall have, as a whole: (i) direct experience in executive compensation, and (ii) skills and experience that should enable the Committee to make decisions on the suitability of compensation policies and practices, all as determined by the Board. The members of the Committee shall be appointed by the Board on the recommendation of the Nominating and Corporate Governance Committee and serve at the pleasure of the Board. A majority of the members of the Committee shall constitute a quorum.

3. Meetings of the Committee

The Committee shall meet as many times as the Committee deems necessary to carry out its duties effectively, but not less frequently than two times per year. Meetings shall be called by the chair or a majority of the members of the Committee.

The Board, or failing such selection, the members of the Committee, shall select a chair who will preside at each meeting of the Committee. The chair shall be an independent director.

The chair of the Committee shall ensure that the agenda for each upcoming meeting of the Committee is circulated to each member of the Committee on a timely basis in advance of such meeting.

4. Responsibilities of the Committee

The Committee shall have the following responsibilities:

(a) With respect to executive officers’ and directors’ compensation

  • Review and approve on an annual basis corporate goals and objectives relevant to Chief Executive Officer (“CEO”) compensation, evaluate the CEO’s performance in light of those goals and objectives and set the CEO’s compensation level based on this evaluation. The CEO shall not be present during voting or deliberations relating to his or her compensation.
  • Determine fees payable to members of any ad hoc committees established by the Board.
  • Review and make recommendations to the Board on an annual basis with respect to the adequacy and form of compensation and benefits of all executive officers and directors.
  • Administer and make recommendations to the Board with respect to the Corporation’s incentive compensation plans and equity-based plans, including setting performance targets so that incentive compensation aligns with the Corporation’s performance and the interests of all shareholders.
  • Review the recipients of, and the nature and size of equity-linked awards and bonuses granted from time to time, in compliance with applicable securities laws, stock exchanges and any other regulatory requirements.
  • Prepare any report as may be required under applicable securities laws, stock exchanges and any other regulatory requirements.
  • Oversee risk identification and management in relation to compensation policies and practices and reviewing disclosure in this respect.
  • Oversee the selection of a benchmark group for the purposes of comparing compensation or any element of compensation and reviewing disclosure in this respect.
  • Review the compensation discussion and analysis section of the Corporation’s management information circular and recommend its approval to the Board.

(b) With respect to other matters

  • Monitor the appropriate compensation structures in place so that the Corporation can attract, motivate and retain the quality of personnel required to meet its business objectives.
  • Maintain an assessment and compensation philosophy that rewards the creation of shareholder value.
  • Monitor strategic labour and human resources policies and practices.

(c) With respect to Committee issues

  • Review and assess annually its own performance and the adequacy of this Charter and recommend to the Nominating and Corporate Governance Committee any changes deemed appropriate by the Committee.

5. Reporting

The chair of the Committee reports regularly to the Board on the business of the Committee as well as at such time and in such manner as the Board may otherwise require.

6. Retention of Independent Advisors

In performing its responsibilities, the Committee may, as required and subject to advising the Chairman of the Board, engage an outside advisor (an “Advisor”) for advice and assistance at the expense of the Corporation. Before retaining an Advisor (other than in-house legal counsel and any Advisor whose role is limited to consulting on broad-based, non-discriminatory plans or providing information that is not customized in particular for the Corporation), the Committee shall consider the independence of such Advisor, including any independence factors that it is required to consider by applicable securities laws, stock exchanges or any other regulatory requirements.

7. Additional

  • Note that the Corporation is subject to the requirements set forth in the following agreements which may affect the above:
  • The Private Placement Agreement dated October 18, 2006 among the Corporation and Rio Tinto International Holdings Limited;
  • The Heads of Agreement dated December 8, 2010 among the Corporation and Rio Tinto International Holdings Limited;
  • The Memorandum of Agreement dated April 17, 2012 among the Corporation, Rio Tinto International Holdings Limited and Rio Tinto South East Asia Limited, as amended pursuant to an Amending Agreement dated May 22, 2012;
  • The Memorandum of Agreement dated August 23, 2013 among the Corporation, Rio Tinto International Holdings Limited and Rio Tinto South East Asia Limited, as amended pursuant to an Amending Agreement dated November 14, 2013; and
  • The Financing Support Agreement dated December 15, 2015 among the Corporation and Rio Tinto plc.

Nothing contained in this Charter is intended to expand applicable standards of conduct under statutory, regulatory or exchange requirements for the directors of the Corporation or the members of the Committee.

Chair of the Board

TURQUOISE HILL RESOURCES LTD.
(the “Company”)
POSITION DESCRIPTION FOR
CHAIR OF THE BOARD

The role of the Chair is critical to the effective functioning of the Board. The Chair sets the tone for the relationship between the Board and Management, plays a significant role in the development of the Company’s strategic direction and acts as a spokesperson for the Company in its relationships with shareholders and other stakeholders.

The Chair of the Board is appointed by the directors.

The roles and responsibilities of the Board Chair include:

  1. Leadership of the Board, ensuring its effectiveness in all aspects of its oversight and monitoring role.
  2. Ensuring good governance practices at the Board level and setting the ethical tone of the Board.
  3. Managing conflicts of interests.
  4. Setting the agenda, in consultation with the CEO of the Company, to ensure all relevant matters to the Company are addressed at Board meetings.
  5. Ensuring the provision of accurate, timely, complete, relevant, honest and clear information to the directors.
  6. Upholding rigorous standards of preparation for Board meetings so that all directors have read the materials in advance to ensure effective discussions and decision making.
  7. Chairing meetings of the Board in accordance with the By-laws of the Company and Canadian corporate law.
  8. Ensuring adequate participation of all Board members in discussions and decision making.
  9. Ensuring effective communication with all shareholders.
  10. Chairing meetings of the shareholders of the Company in accordance with the By-Laws of the Company and Canadian corporate law.
  11. Facilitating Board discussions to ensure core issues facing the Company are addressed in the Company’s best interests.
  12. Promoting constructive and respectful relations among Board members and between the Board and Management.
  13. Monitoring how the Board works together and how individual directors perform.
  14. Identifying and participating in the selection of new Board members along with the Nominating and Corporate Governance Committee.
  15. Overseeing a formal succession plan for the Board, the CEO and certain key Management positions.
  16. Fulfilling any other duties as provided for in the By-Laws of the Company.
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