Statement of Corporate Governance Practices and Policies (statement of corporate governance policies and practices 2025 en)

Statement of Corporate Governance Policies and Practices

February 12, 2025

SUN LIFE FINANCIAL INC. AND SUN LIFE ASSURANCE COMPANY OF CANADA (TOGETHER, "SUN LIFE")

Statement of Corporate Governance Policies and Practices

Membership

The by-laws provide for the Board of Directors (Board) of Sun Life to have a minimum of eight and a maximum of twenty directors. Each director shall possess the attributes set out in the Position Description for Directors. In addition, a majority of the directors must meet the independence requirements set out in the Director Independence Policy.

Director Election and Tenure

Prior to each annual meeting, the Governance Committee will review the candidacy of each nominee and confirm to the Board that each nominee meets the expectations outlined in the Position Description for Directors and satisfies the criteria for Board membership. In addition, the Governance Committee will report on the independence and tenure of each nominee as defined in the Director Independence Policy.

Each director will be elected for a term ending at the conclusion of the next annual meeting. Subject to the provisions related to tenure in the Director Independence Policy, a director may stand for re-election at the end of each term until the twelfth annual meeting after their initial election or appointment to the Board, at which time he or she will retire.

A director who is a member of management must resign from the Board when he or she leaves active employment with Sun Life or its affiliates.

Majority Voting

In elections where only the nominees recommended by the Board stand for election, a director who receives more "withheld" votes than "for" votes for their election must immediately tender a written offer to resign from the Board. The Board will accept the resignation unless there are exceptional circumstances. The Board will make its decision within 90 days of the annual meeting and will promptly disclose its decision by way of news release. If the Board does not accept the resignation, it will fully explain the exceptional circumstances and the reasons for its decision in the news release.

A director who tenders their resignation pursuant to the preceding paragraph will not participate in the consideration by the Board of the resignation offer.

Access to Management

Each director shall have unrestricted access to management, as necessary, to carry out their responsibilities.

Statement of Corporate Governance Policies and Practices

February 12, 2025

Attendance at Board and Committee Meetings

The Governance Committee reviews the attendance of directors each year as part of the nomination process for director elections. A director who does not, in two consecutive years, attend at least 75% of the meetings of the Board and the Board committees to which they are assigned, must if requested by the Governance Committee tender a written offer to resign to the Chair of the Governance Committee for acceptance or rejection by the Board. The Governance Committee will review any attendance below 75% during such period and consider whether the director should tender a written offer to resign from the Board.

Change of Occupation/Proposed New Director Roles

Directors must promptly notify the Chair of the Board (the "Board Chair"), the Chair of the Governance Committee, the President and Chief Executive Officer and the Chief Legal Officer prior to engaging in any new professional activities, including accepting another director role on a public, private or not-for-profit board.

Directors must also promptly provide notice where their principal employment or other business or professional circumstances change materially from that which they held when elected to the Board (including retirement from their principal employment). The Governance Committee will review the change and consider whether the director should tender a written offer to resign for acceptance or rejection by the Board. The Board is not of the view that directors in such circumstances must always leave the Board, however, an opportunity should be given to review the continued appropriateness of Board membership under the revised circumstances. If the Governance Committee and Board determine that a resignation is appropriate in the circumstances, the director will be expected to offer to tender their resignation to the Board immediately.

In connection with any new activities, the Board Chair, the Chair of the Governance Committee, the President and Chief Executive Officer and the Chief Legal Officer will assess whether:

1. the proposed activity gives rise to any real or apparent conflict of interest, including taking into consideration whether the new organization competes with or is otherwise adverse in interests to Sun Life;
2. the director continues to have the time and commitment to fulfil their obligations to the Board, and
3. the director is otherwise in compliance with these Corporate Governance Policies and Practices, including with respect to any public company or other interlocks (as defined below).

A director shall notify the Corporate Secretary annually about their principal occupation, other director roles, and business associations by completing the annual directors' questionnaire circulated in connection with the preparation of Sun Life's Management Information Circular and Annual Information Form.

Service on other public company boards

Directors who are executive officers of another public company should generally hold only one other public company director role, and any other directors should generally hold no more than three other public company director roles.

Statement of Corporate Governance Policies and Practices

February 12, 2025

Board Interlocks

No more than two directors may serve together on the same board of another public company, and directors may not serve together on the boards of more than one other public company (each, an "interlock"), in each case without the prior consent of the Governance Committee. The Board Chair and the Chair of the Governance Committee will review all relevant public, private or other board interlocks prior to a director accepting a director role on another board. The Governance Committee will review all public, private, and other board interlocks as part of its annual evaluation of director independence to ensure that they do not impact the ability of the applicable directors to exercise independent judgment in the best interests of Sun Life and the Governance Committee may apply the same restrictions applicable to public company interlocks to other board interlocks. Sun Life will disclose all public, private or other interlocks in its Management Information Circular.

Directors' Remuneration and Share Ownership

The remuneration of directors is reviewed every two years to ensure that directors are adequately and competitively compensated.

Each new independent Director is required to hold at least seven times the annual cash retainer or $945,000 in the form of common shares or deferred share units of Sun Life by the fifth anniversary of the director's election or appointment to the Board. Directors on the Board as of January 1, 2025, have one additional year to achieve this requirement.

Orientation of New Directors

Sun Life provides an orientation program for new directors which consists of informal introductory meetings with each Executive Team member, a strategic overview session with the President & Chief Executive Officer, formal sessions with Business Group and Corporate function leaders, and a review of a wide range of written materials, including those that outline the organization of the Board and its committees, the powers and duties of directors, the required standards of performance for directors, the Code of Conduct, the Board and Committee Charters, and the financial statements of Sun Life.

The Board Chair will match new directors with an experienced Board member to act as a mentor by providing perspective and informal feedback and offering insights on Board culture and dynamics.

Continuing Education for Directors

Sun Life provides ongoing business and education sessions for directors to give them a deeper understanding of Sun Life's businesses and operating environment, to address ongoing and emerging issues in the functional areas of Board oversight, and to encourage more in-depth discussion in specific areas. Directors may participate in outside professional development programs approved by the Board Chair, at the expense of Sun Life. Private meetings with members of management will be arranged as requested by a director.

Travel permitting, as part of the ongoing director education program, directors will conduct a site visit to each of Sun Life's four Business Groups (Canada, U.S., Asia, Sun Life Asset Management - SLC Management and MFS Investment Management) over a two-to-three-year period, primarily through the annual board strategy meeting.

Statement of Corporate Governance Policies and Practices

February 12, 2025

Interaction with the Media

The Board believes that it is the responsibility of management, rather than directors, to speak on behalf of Sun Life. From time to time, directors may be requested by the media, or by institutional investors, shareholders, clients, or other stakeholders, to discuss certain issues on behalf of Sun Life. Any director to whom such a request is made should review the request with the Board Chair and the President & Chief Executive Officer before responding.

Shareholder Engagement and "Say on Pay"

The Board believes it is important to have constructive engagement with Sun Life's shareholders to allow shareholders to express their views on governance matters.

The Board Chair or their designate may communicate from time to time with shareholders, regulators, rating agencies and corporate governance-focused coalitions in connection with governance-related matters, including the results of the annual advisory vote on executive compensation. All such communications will be reported to the Board of Directors no later than its next regularly scheduled meeting.

At each annual meeting shareholders will be asked to consider a non-binding advisory resolution on the approach to executive compensation as disclosed in Sun Life's Management Information Circular prepared for the annual meeting.

The results of the advisory vote will be published and if a significant number of shareholders oppose the resolution, the Board will consult shareholders to understand their concerns. The Board will review Sun Life's approach to compensation in the context of those concerns.