Terms of Reference
Financial Reporting and Risk Oversight Committee
The Financial Reporting and Risk Oversight Committee (FRROC) is a standing committee of Council. It reports to Council through the Executive Committee of Council (ECC). The FRROC assists Council in fulfilling its oversight responsibilities in the areas of enterprise risk management (strategic, operational and external risks), financial reporting, the annual audit processes, and compliance with laws and regulations. Similarly, the FRROC assists the Board of Directors of the Royal College Foundation in its financial and risk oversight responsibilities.
Moreover, the FRROC supports Council in its oversight of Royal College Canada International Inc. (RCI) as a subsidiary of the Royal College, in accordance with the Royal College-RCI Inter-organizational Charter.
Responsibility and Authority
- Reviews the immediate and longer-term financial needs of the Royal College and recommends approval of appropriate financial budgets and/or policies;
- Receives regular and timely financial reports;
- Reviews any report from management that accompanies published financial statements (to the extent that such a report discusses the financial position or operating results) for consistency of disclosure with financial statements themselves;
- Reviews the results of the external audits and any changes in accounting policies or practices, and their impact on the financial statements;
- Reviews developments in emerging Canadian accounting standards for not-for-profit organizations that could affect the Royal College, including significant accruals, provisions or estimates and their effect on the financial statements, as well as other sensitive matters such as measurement and disclosure of related party transactions;
- Reviews with management, external auditors and legal counsel any material litigation claims or other contingencies including tax issues and adequacy of financial provisions that could materially affect financial reporting;
- Recommends to Council appointment of the public accountant;
- Meets with the Royal College’s auditors to discuss and review the financial operations of the Royal College, any changes in accounting policies or practices and their impact on the financial statements of the Royal College and the pension plan, and ensures that acceptable accounting practices and controls are in place; and
- Reviews the audited financial statements of the Royal College and the Royal College pension plan, and reports on the external audit and process of the financial statements to Council.
While Council retains overall responsibility for the pension plan, it has delegated its oversight responsibilities in respect of the pension plan to the committee.
- Oversees the performance and management of three investment portfolios, namely the Royal College investment portfolio, as well as the pension plan and the Foundation portfolios;
- Reviews and monitors the funds’ performance and results and those of the investment managers; and
- Reviews, monitors and recommends policies and mandates governing investments.
- Oversees the Royal College’s risk management process;
- Oversees the identification, measurement, monitoring and control of the Royal College’s principal risks and ensuring that appropriate systems are in place to manage these risks;
- Reviews and recommends Council approval of risk management policies that establish the appropriate approval levels for decisions and other checks and balances used to manage and mitigate risk;
- Assesses and monitors financial and other risks stemming from claims and law suits, contract management, operating budget management, etc.; and
- Oversees and reviews the Royal College’s risk profile and performance against risk metrics and ensuring that adequate policies, procedures and controls to assess and manage the principal risks to which the Royal College is exposed are in place and are complied with.
Royal College Foundation
The FRROC also conducts the responsibilities listed above for the Royal College Foundation. Recommendations for approval of the budgets, policies and financial statements related to the Foundation are made to its Board of Directors.
Oversight of RCI
- Receives for information on behalf of Council
- the RCI unaudited quarterly financial reports;
- the annual audited financial statements and public accountants report for RCI;
- RCI’s financial forecasts; and
- policies specific to RCI.
- RCI’s financial policy compliance; and
- RCI risks impacting the Royal College.
The FRROC shall consist of no fewer than five and no more than eight committee members (Bylaw No. 20, Article 14.1).
The chair of the FRROC shall not be an officer or an employee of the Royal College or any of its affiliates, or have been such an officer in the preceding three years (Bylaw No. 20, Article 14.1.2).
The committee will be made up of Fellows of the Royal College as well as external members who bring key competencies and expertise to the committee. One of the committee members will be the Chair of the RCI Finance Committee.
Key Competencies and Characteristics
Committee members should possess general knowledge of the Royal College and its subsidiaries, strong business acumen, legal and tax knowledge, information management and technology knowledge, budgeting, accounting knowledge, risk management, and ability to read financial statements prepared in accordance with Canadian accounting standards for not-for-profit organizations.
Committee members shall also understand the significant risks to which the Royal College is exposed, the Royal College’s enterprise risk management (ERM) framework, and the policies, procedures and controls used by management to assess and manage these risks.
Committee members should possess the ability and willingness to meet the strategic directions of the Royal College and the willingness to participate effectively in committee meetings.
Term of Office
The usual term of office of the chair is two years, renewable once (maximum four years). As a standing committee of Council, the chair is appointed from among the current members of Council (Bylaw No. 20, Article 15.1.1) and is a member of the Executive Committee of Council.
The usual term of office of members is two years, renewable twice (maximum six years). All terms shall begin and end at the time of the Annual Meeting of the Members when vacancies need to be filled. Terms shall be staggered to allow for and ensure a continuity of knowledge and expertise.
The FRROC meets quarterly or more often as/if required. Face to face at least twice a year and by telephone conference as needed.
Quorum consists of a majority of the voting members of the committee (i.e., 50% plus one). The chair is counted as a voting member in constituting quorum. However as the presiding official of the committee, the chair does not move motions. Furthermore, the chair shall only vote when the vote is conducted by secret ballot. Every question shall be decided by a majority of the votes cast. In the event of a tie vote, the question shall be defeated. When a committee is called to make a decision outside of a meeting by e-ballot, the same rules apply.
Appointment to a Royal College committee carries significant responsibilities, and all committee members are expected to adhere to the Volunteer Code of Conduct. In addition, committee members are required to maintain absolute discretion and not divulge, re-produce, or release any confidential information except when authorized by the Royal College. Committee members are permitted to download a copy of committee materials for use solely for the purposes of the Committee. All downloaded materials must be deleted once used for the intended purpose.
|Most recent resolution:||Resolution No. 2019/2020-56|
|Previous resolution(s):||Resolution No. 2018/2019-10|
|Approval Date:||February 20-21, 2020|
|Approval path:||GC, Council|
|Effective date:||February 21, 2020|
|Date of next review:||Spring 2021|
|Royal College Office:||Office of Finance and Administrative Services|