NOMINATING & CORPORATE GOVERNANCE COMMITTEE CHARTER
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.
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.
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.