SASKENERGY 2017-18 ANNUAL REPORT
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 stating that the Board sets the strategic direction, ensures the integrity and adequacy of the Corporation’s systems and management practices, recommends the appointment or termination of the President and Chief Executive Officer 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 12 people appointed to SaskEnergy’s Board of Directors. These same 12 people are also appointed as members for the Boards of Directors for each of SaskEnergy’s six subsidiary companies. Seven members (58 per cent) are women. The Board Chair is Ms. Susan Barber, Q.C. and the Vice Chair is Ms. Nola Joorisity.
INDEPENDENCE The matter of “independence from management” is based on 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 12 month reporting period, and are 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 Governance and Social Responsibility Committee of the Board, consisting of independent non-lawyer Board members, reviews and approves the Corporation’s external legal service providers in accordance with this Protocol on an as-required basis and reviews the total services being provided by these firms. The Board Chair, Ms. Susan Barber, Q.C., and 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.
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