thereby deemed to have a material indirect relationship with the Corporation under the above standard. The majority of Directors are independent; however, the Corporation is not in strict compliance with the CSA independence standard. The Corporation’s statutory holding company, Crown Investments Corporation of Saskatchewan (CIC), has managed this independence issue through the development of a Protocol Regarding Lawyers Serving on Subsidiary Crown Corporation Boards of Directors. This Protocol adopts the principle that Directors must be free from any material relationship that may interfere with the Director’s ability to exercise independent judgment in the best interests of the Corporation, or to influence the choice of law firms. Given the smaller local market in Saskatchewan for legal services, the Protocol restricts Directors from any direct material relationship, but allows a limited indirect relationship subject to the qualifications of the Protocol such as pre-approval of legal services by an independent Board Committee, declarations of conflict, no direct benefit to the Director, and restriction of information to that Director. The Board has appointed a special ad hoc Committee of independent non-lawyer Board members to review and approve the Corporation’s external legal service providers in accordance with this Protocol on an as-required basis and to review the total services being provided by these firms. This ad hoc Committee met twice in the 15-month reporting period for this purpose. The Board Chair, Ms. Susan Barber, Q.C., and Governance Committee Chair, Mr. David Bishop, are lawyers who are subject to this Protocol and throughout this disclosure are indicated by an asterisk to reflect that they are not independent, due to the deemed material indirect relationship. All other Directors, including the Vice Chair of the Board, are independent of management. Committee Mandates and Membership The Board fulfills its oversight responsibilities for the operation of SaskEnergy by utilizing its five Board Committees. The Terms of Reference or mandates of the Committees are reviewed annually, and updated where required. The Terms of Reference for each Committee establish the constitution, operations and areas of responsibility over which that Committee makes recommendations to the Board. Full details of the Terms of Reference for each Committee can be found on SaskEnergy’s corporate website at www.saskenergy.com/about_saskenergy/ governance.asp. Committees have also adopted work calendars to schedule and fulfill specific tasks and assigned responsibilities. Each Committee has the authority to engage and compensate outside advisors that it deems necessary to assist with its mandate.
CORPORATE GOVERNANCE DISCLOSURE SaskEnergy’s commitment to advanced governance practices demonstrates accountability to the Owner and its customers. Effective governance helps ensure that SaskEnergy operates as both a financially viable organization and a responsible Corporation. SaskEnergy governance practices ensure that the Corporation’s customers and employees are provided with fair and equitable treatment and that the correct levels of authority and accountability are established so that all employees can accomplish their work without unnecessary limitations or risks. Board Stewardship/Mandate The SaskEnergy Board of Directors (the Board) is responsible for the stewardship of the Corporation, and oversees and closely monitors the Corporation’s adherence to provisions of The SaskEnergy Act and its Regulations. The Board has adopted written Terms of Reference which state that the Board sets the strategic direction, ensures the integrity and adequacy of the Corporation’s systems and management practices, and periodically examines the objectives and mandates of its structure. The Board promotes a culture of integrity, ensures that the principal corporate risks are managed, evaluates the Corporation’s performance and monitors financial results. The Board meets outside the presence of management at each meeting. Board Composition SaskEnergy’s Board is representative of the Saskatchewan community and industry. The Lieutenant Governor in Council, pursuant to The SaskEnergy Act , appoints up to 12 members, and designates a Chair and a Vice Chair. Members are representative of diversity, and they possess a variety of attributes, including industry expertise, strategic leadership, entrepreneurial and communication skills, integrity, flexibility, initiative and sound judgment. Members are appointed to a fixed term, and terms may be renewed by the Lieutenant Governor in Council. There are currently 11 people appointed to SaskEnergy’s Board of Directors. These same 11 people are also appointed as members for the Boards of Directors for each of SaskEnergy’s six subsidiary companies. Four members (36 per cent) are women. The Board Chair is Ms. Susan Barber, Q.C. and the Vice Chair is Mr. Victor Thomas. Independence The matter of “independence from management” is based upon the definition set by Canadian Securities Administrators (CSA) and utilized by publicly traded companies in the industry. None of the Directors have been employed with the Corporation. In this reporting period, none of the Directors have direct material contracts or relationships with the Corporation, or have received remuneration from the Corporation in excess of the fees and compensation as Directors and Committee members or as Directors of subsidiaries of the Corporation. However, two Directors are partners in law firms that have performed legal services for the Corporation in the 15-month reporting period, and are
Audit and Finance Committee
Chair: Nola Joorisity Members: Susan Barber, Q.C.*, David Bishop*, Dr. Denis Jones + , Neal Krawchuk The Audit and Finance Committee oversees the financial performance and ensures the integrity, effectiveness and accuracy of the Corporation’s financial reporting, control systems, risk management and audit functions. The Committee ensures that the Board is provided with financial
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