2020-21 SaskEnergy Corporate Governance

2020-21 SaskEnergy Corporate Governance Report

2020-21 CORPORATE GOVERNANCE

Corporate Governance Disclosure

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 community/stakeholder 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 four subsidiary companies. Seven members (58 per cent) are women, which is ahead of the Utility Sector and Oil and Gas Sector general diversity targets for the representation of women on Boards as presented in the Canadian Securities Administrators (CSA) Multilateral Staff Notice 58-310. The Board Chair is Ms. Susan Barber, Q.C. and the Vice Chair is Ms. Nola Joorisity. None of the members of the Board of Directors are ‘over-boarded’ as this term is defined in recent guidance, allowing members to properly carry out responsibilities on a reasonable number of Boards. The following table illustrates the diversity statistics for the number of women represented on SaskEnergy’s Board of Directors and Executive over the past three fiscal years:

SaskEnergy’s commitment to leading governance practices demonstrates accountability to stakeholders. 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 regularly examines the objectives and mandates of its structure. The Board promotes a culture of integrity, ensures that the principal and material corporate risks are managed, evaluates the Corporation’s performance and monitors financial results. The Board meets outside the presence of management at each meeting.

2018-19*

2019-20*

2020-21

Total Positions

# of Women

Total Positions

# of Women

Total Positions

# of Women

Number of Women represented on Board Number of Women represented on Executive Number of Women in Board Leadership Roles (Chair, Vice Chair)

100

*Data collected from previous Annual Reports

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Corporate Governance

Independence The matter of “independence from management” is based on the definition set by the CSA and utilized by publicly traded companies in the industry. None of the Directors have been employed with the Corporation. The CEO is not a member of the Board. 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, one Director is a partner in a law firm that has performed legal services for the Corporation in the 12-month reporting period, and is 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 Environmental, Social and Governance 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., is a lawyer who is subject to this Protocol and throughout this disclosure, her name is indicated by an asterisk to reflect that she is 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 Board Committees. The Terms of Reference or mandates of the Committees are reviewed annually and updated as 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 https://www.saskenergy.com/about-us/our- company/board-directors/ . 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. The Board Committee structure and composition is listed below: Audit and Finance Committee Chair: Nola Joorisity Members: Susan Barber, Q.C.*, Grant Greenslade, Tina Svedahl The Audit and Finance Committee oversees SaskEnergy’s 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 plans and proposals consistent with the Corporation’s Strategic Plan, annual Corporate Plan and public policy objectives. The Committee meets regularly outside the presence of management with the appointed external auditor, the Provincial Auditor and internal auditors. Except as qualified previously, all members of the Audit and Finance Committee are independent of management. All Committee members are financially literate, as that term is commonly defined with respect to the composition of audit committees within the CSA Multilateral Instrument 52-110, and their education and experience in understanding financial matters is addressed in their biographies on the governance portion of the SaskEnergy website: https://www.saskenergy.com/about-us/our-company/ board-directors/board-roles-and-responsibilities. The Committee had six meetings this fiscal year. Important issues included: the review and approval of financial statements; review of various commodity strategies; review and approval of payee disclosure report; an economic review and the impact on SaskEnergy; review of Audit Services reports; approval of Audit Services’ Three Year Audit Plan; Business Plan, budget and financial targetsr review and approval; review and updates to the Capital Budget and capital spend; review and approval of significant contracts; and various risk management activities, policies review and corporate risks monitoring. Enterprise security monitoring and updates were provided to the Committee on a quarterly basis. *Non-independent Board Member

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Corporate Governance

Environmental, Social and Governance Committee Chair: Ron Barsi Members: Curt Chickoski, Linda Moulin, Doug Shaw The Environmental, Social and Governance (ESG) Committee provides strategic leadership for items such as corporate environmental and sustainability initiatives, social issues, Indigenous relations, human rights, community investment, and governance processes and policies. One member is recognized as an expert in the environment field. This Committee has input into the selection criteria for Board member and Committee Chair candidates, and creates profiles of the desired skills, experience and competencies required of Directors. The Committee monitors compliance with the Corporation’s Code of Business Conduct and Ethics, including waivers therefrom, the Corporation’s Whistleblower Policy, and the Reporting of Losses Policy. The Committee is charged with planning orientation and education programs to keep Directors informed and current with business, social, environmental and ethical requirements. The Corporation considers ESG to include: conducting business in a safe, socially responsible, ethical and transparent manner; protecting the environment affected by its activities; listening and responding to community or stakeholder concerns; supporting human rights; and engaging, learning from, respecting and supporting the communities and culture with which it works. The Committee mandate includes the effective oversight and obligation to ensure that adequate and effective controls are in place to assess and monitor ESG risks and required disclosures, and compliance with regulatory requirements. The Committee had four meetings this fiscal year. Key work of the Committee included: reviewing and updating the CEO’s mandate; review of customer satisfaction survey results; coordinating evaluation of the Board of Directors including Committee structures; review of key policies; review of disclosures under the Corporation’s Whistleblower Policy; business/industry training for Directors; Legal Services review; review of Indigenous engagement activities; review of community investment initiatives; review of corporate branding strategies; review of the Corporation’s environmental management system compliance; review of the Corporation’s annual environment initiatives, including Sustainability Reports and their framework; review of the Corporate Environmental Risk Management Site Assessment and Remediation Program that outlines related Corporate environmental impact and liabilities, including decommissioning liabilities; review of the Corporation’s emissions management program; and review of management’s update on corporate system integrity.

Human Resources and Safety Committee Chair: Alice Wong Members: Veronique Loewen, Annette Revet, Bradley Sylvester The Human Resources and Safety Committee is responsible for, and assists, the Board in overseeing the management of SaskEnergy’s human resource strategic planning, programs and practices for the development and implementation of fair compensation, performance management and succession planning. The Committee also has the mandate to proactively address safety matters or risks and to assist the Corporation in making safety a priority and focus of the organization. The Committee also sets the CEO’s performance goals and objectives, and conducts a semi-annual assessment of the CEO’s performance through the Committee Chair and Board Chair. The findings of this evaluation, and any changes to the CEO’s compensation as a result of the review, are recommended to the Board. Further, the Committee makes recommendations to the Board regarding the approval of employee and Executive compensation, including measures and targets, and receiving direction on its mandate (both in and out of scope) through communication with CIC. An ad hoc Board Committee is created, when necessary, to identify and recommend to the Board candidates for the position of CEO, while the Human Resources and Safety Committee oversees that the incumbent fulfills the role set out in the CEO Mandate. The Committee had four meetings this fiscal year. Important issues included: management and Executive compensation plans; succession management updates; review of health and safety performance indicators; a diversity and inclusion update; annual work plan status updates; reviews of key policies; Written position descriptions posted on SaskEnergy’s website set out the roles and responsibilities of the Chair, Committee Chairs and individual Directors. The role of the Chair is to provide leadership in Board organization, processes and effectiveness and renewal, as well as balance the roles of the Board and management in the course of the Board discharging its fiduciary and legal responsibilities. The position description for Directors sets out their roles and responsibilities, including legal requirements, accountability, stewardship, knowledge and education, conflicts, confidentiality, as well as expectations for attendance and review of materials in preparation for meetings. and compliance with legislation updates. Roles and Responsibilities

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Corporate Governance

The CEO’s Mandate sets out the principal duties and responsibilities for the CEO. This Mandate forms the basis for the goals and objectives of the CEO and is incorporated into annual performance objectives against which the Human Resources and Safety Committee measures the CEO’s performance. Through a series of execution and expenditure authorization policies that are reviewed regularly with consideration for changes in organizational and business circumstances, the Board delineates the roles and responsibilities delegated to management. Additional limits are placed upon both management and the Board through legislation requiring Orders in Council, compliance with investment requirements, or changes to legislative mandate through The SaskEnergy Act . The Board has also approved a Bright Line Mandate, which is a decision-making matrix that defines the ultimate decision making body on key matters and is validated by the Board. leadership in setting the long-range strategic direction and to approve SaskEnergy’s Corporate Plan. This comprehensive strategic planning process results in the Board’s review and approval of the Corporate Plan and annual operating and capital budgets. The previous five-year Strategic Plan served the organization through a period of steady growth, including the expansion of SaskEnergy’s natural gas system to meet the demand of customers, businesses and industries. SaskEnergy has moved toward a more agile planning process to help achieve its Corporate Vision. Although the new Corporate Plan focuses on the next three years, as a living document, it allows SaskEnergy to quickly adjust the course of action as its operating environment evolves. The Board of Directors participates with management to identify and set long-term goals for SaskEnergy Strategic Planning and Reporting One of the Board’s principal duties is to provide through the corporate planning process. The Corporate Plan involves a three-year rolling projection, which is expected to be updated annually. The Board oversees this process, providing input, guidance, validation, and critical evaluation of the Corporate Plan and its initiatives. The Board continues to provide oversight and support in the implementation of the plans and initiatives and to measure their success. Each year, the Board and senior management meet jointly to identify strategic risks, and to review strategies and measurable targets to gauge performance in managing those risks. Public Policy Role SaskEnergy is a statutory Crown corporation governed by The SaskEnergy Act and Regulations. By legislation, CIC is the statutory holding corporation for all of Saskatchewan’s commercial Crown corporations.

CIC has the authority to establish direction for SaskEnergy related to matters set out in legislation. As a provincial Crown corporation, SaskEnergy serves a public policy role. SaskEnergy delivers natural gas and energy solutions responsibly to the residents, businesses and industries of Saskatchewan. SaskEnergy and its subsidiaries fulfill this mission through the operation of systems for natural gas distribution, transmission, storage, line locating and other related activities to promote the conservation and safe use of natural gas, while contributing to, and promoting, the economy of the province. CIC approves SaskEnergy’s Corporate Plan annually and sets any other strategic priorities against which CIC and the Owner will measure the Corporation’s performance. SaskEnergy collaborates with other Saskatchewan Crown corporations to further CIC’s stated priorities of enhancing efficiency gains through joint initiatives, procurements, and promoting an open business environment. Approach to Governance SaskEnergy is not legally obligated to comply with the CSA governance guidelines as it does not have share capital and is not a reporting issuer. However, it works toward those guidelines that are applicable and has benchmarked its governance practices against the CSA National Policy and Instrument Guidelines, including National Policy 58-201 and National Instrument 58-101, guidelines of the Chartered Professional Accountants of Canada, and observations of the Office of the Auditor General of Canada, Treasury Board of Canada Secretariat and Conference Board of Canada, to address key performance indicators in the measurement of governance. The practices of SaskEnergy are substantially consistent with the foregoing standards as published. Integrity and Ethics SaskEnergy promotes a strong culture of ethical business conduct at all levels of the Corporation. The Board has approved and adopted a written Code of Business Conduct and Ethics (the Code) that applies to employees, contractors, officers and Directors of SaskEnergy. The Code, designed to promote integrity and deter wrongdoing, is based on values of fairness and honesty, equal treatment and accountability. It provides guidelines on handling information and protecting or using corporate assets, confidentiality, conduct with suppliers and customers, business hosting, international business, conflicts of interest, compliance with laws and policies, and reporting. To further promote public confidence in the integrity of SaskEnergy and its employees, the Corporation

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Corporate Governance

Risk Identification and Management SaskEnergy has a formal Enterprise Risk Management Policy that was developed by management and approved by the Board of Directors. SaskEnergy’s risk management process is designed to identify potential events that may impact SaskEnergy and manage the risk presented within accepted tolerance levels. Senior management holds primary responsibility for identifying inherent risks, and for designing and implementing mitigation initiatives. The Board expects management to use appropriate controls to manage risk and delegate responsibility and authority as required. Introduction of key risk assessment and disclosure reporting changes on processes related to climate change risks, and oversight afforded to these risks, are expected through additional governance guidance and training. Each year, the Board and senior management independently follow a process led by Internal Audit to identify and prioritize significant risks. The Director of Audit Services prepares a report summarizing the independent risk assessments completed by the Board and management. This report is discussed at a Board meeting where senior management and the Board align on corporate risks and the plans to mitigate or manage the residual risks. Through the Corporate Plan, the Corporation implements plans to address key risks. The Board monitors the risk management programs and oversees the implementation of appropriate systems to manage identified risks either directly, or through the Audit and Finance Committee. The Audit and Finance Committee regularly reviews Audit Services’ reports and discusses significant risk areas with the internal and external auditors. The sale of a variety of ‘non-core’ assets to streamline and focus corporate activity has also led to the transfer of environmental liabilities and risk mitigation. Cyber Security Risk SaskEnergy relies on its information and operations technology systems to safely and efficiently operate corporate assets, and to protect corporate data and personal information. These systems are subject to cyber security risks. Cyber security risks include, but are not limited to, targeted attacks, exposure to computer viruses, and breaches of corporate and personal information within technology systems managed by internal and external parties. A cyber security event could expose the Corporation to loss or misuse of critical data and information leading to property damage, disruptions to its operations, privacy breaches, loss of confidentiality and financial or reputational losses.

has a Whistleblower Policy in place, which sets out a formal process for the reporting, investigation and appropriate follow-up for actual or potential wrongdoing. The Public Interest Disclosure Act provides employees with an additional mechanism to disclose wrongdoing. In addition, SaskEnergy’s Owner requires disclosure to the police and to the Board, CIC Board, and Minister of all losses greater than $500, pursuant to the Reporting of Losses Policy and processes. Compliance with the Code is reinforced through mandatory training of all employees, and confirmed through the use of an online tool. The Code and the Whistleblower and Reporting of Losses policies are posted on the SaskEnergy intranet site for employees, and the Code and Whistleblower policies are on SaskEnergy’s website for public access. A process is also posted on the website for members of the public to contact the Chair of the Environmental, Social and Governance Committee of the Board, in confidence, to report any potential violation of the Code or Whistleblower Policy. Management monitors and reports on any issues arising under the Code annually, the Whistleblower Policy semi- annually, and the Reporting of Losses Policy quarterly, to the Environmental, Social and Governance and Human Resources and Safety committees, which are charged with oversight of compliance with these policies. In addition to the Code, SaskEnergy’s Directors are required to abide by CIC’s Directors’ Code of Conduct. The Environmental, Social and Governance Committee, appointed as Ethics Advisor for this purpose, is required to administer, monitor and enforce the Directors’ Code of Conduct, which includes reporting annually to the Board concerning compliance. It is also standard procedure to commence all Board and Committee meetings with an in-camera agenda item providing Directors with an opportunity to declare any conflicts of interest or any changes to outside employment or directorships they hold that may create a potential or perceived conflict of interest. Upon appointment, Directors declare directorships on, and material interests in, other business and any material contract entered into with SaskEnergy or its subsidiaries to the Environmental, Social and Governance Committee, which works proactively to address any potential conflicts of interest. Agenda items are monitored by management, and those containing any item that a Director has disclosed a material interest in are not distributed to the Director. Likewise, any Director subject to CIC’s Protocol Regarding Lawyers Serving on Subsidiary Crown Corporation Boards of Directors will recuse themselves from consideration of any item creating a potential conflict of interest. This reporting period there were no waivers granted by the Board to any Directors or Officers authorizing non-compliance with these policies.

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Corporate Governance

Robust Succession Process The SaskEnergy Executive team uses a semi-annual review process to: address strategic positions; keep the succession plan current through an evergreen process; respond to human resource developments; focus on continuous employee development; and mitigate succession and knowledge transfer risks. The Executive considers various strategic options to address short-term needs (emergency or unforeseen personal circumstances) and long-term needs (business structural changes and planned retirements). The Human Resources and Safety Committee of the Board of Directors receives a succession plan update semi-annually and reports to the Board on the succession management process. The Board of Directors and CEO directly oversee the succession plans for the CEO and the Executive. Communications (with the Shareholder and Stakeholders) SaskEnergy is committed to the principles of transparency, openness and timeliness in communication with its Owner, CIC, employees, stakeholders and the public. SaskEnergy regularly surveys employees and external stakeholders for feedback on its corporate activities and more information on these communications can be found in the MD&A section. The Corporation complies with the communication requirements set by the Shareholder and by statute, in accordance with the Board approved external communications policy. Through the Board Chair, the Board is accountable to the Minister Responsible for SaskEnergy. The Minister functions as a communication liaison among the Corporation, CIC, Cabinet, the Provincial Legislature and the public. As an entity subject to The Freedom of Information and Protection of Privacy Act, SaskEnergy strives to strike a balance between transparency and maintaining customer confidentiality in matters of communication and disclosure. The Corporation is subject to annual disclosure requirements of the Legislative Committee regarding Crown Payee Disclosure on all payments greater than $50,000 to employees and suppliers, and for all grants, donations, and sponsorships greater than $5,000. All major public disclosures of corporate performance of the Corporation are subject to prior approval of the Board. Senior Executive members of SaskEnergy also appear before Legislative Committees to answer questions relating to the business of the Corporation in preceding years. To facilitate feedback to and from the Owner, the Board Chair communicates with CIC, and also participates in a

In order to manage cyber security risk, SaskEnergy has developed a cyber security strategy whereby the Corporation tests its systems, builds controls and conducts investigations. This strategy is partly enshrined in the Enterprise Security Policy and the Acceptable Use of Technology Policy. In addition, the Corporation has added incremental resources to manage and evaluate cyber risks and privacy processes related to the growing adoption of cloud migration, data analytics and mobile technology. SaskEnergy proactively and continuously monitors its systems to identify and address malicious activity, as well as potential or emerging threats. Business continuity exercises are also conducted. Further, although business systems are secure and unauthorized access resulting in serious harm is unlikely, SaskEnergy deemed it prudent to obtain cyber insurance coverage to address costs associated with responding to and mitigating the outcomes of a cyber-attack, if one were to occur.

Integrity of Internal Controls and Management Systems

The Board and the Audit and Finance Committee receive reports from, and work closely with, internal and external auditors to promote financial transparency and ensure the integrity, effectiveness and adequacy of SaskEnergy’s internal controls and management systems. As part of SaskEnergy’s commitment to accountability, the Audit and Finance Committee reviews the financial performance of the Corporation quarterly. Natural gas purchase transactions and credit risk are reported by management and actively monitored by the Committee. Pursuant to the directive of CIC, SaskEnergy has a process in place regarding internal controls certification by the CEO and CFO. This process is designed to provide reasonable assurance regarding the effectiveness of SaskEnergy’s internal controls over financial reporting. SaskEnergy’s financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). As part of the March 31 year- end audit, the external auditors have provided an opinion that the Corporation’s financial statements have been prepared in accordance with IFRS. The Board oversees the annual external audit plan of the appointed external auditor for the audit of the Corporation’s annual financial statements, and the annual internal audit plan carried out by SaskEnergy’s internal audit group. To preserve the independence of the role of the external auditors, the Audit and Finance Committee must pre-approve all non-audit services undertaken by the external auditor in accordance with the Corporation’s Non-Audit Services Policy.

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Corporate Governance

CIC Chairs forum where communication and feedback is provided on the Owner’s expectations of all Saskatchewan Crown corporations. SaskEnergy’s CEO regularly provides briefings to the Minister of Crown Investments Corporation and the Minister Responsible for SaskEnergy. CEO Assessment, Executive Compensation and Executive Diversity The Human Resources and Safety Committee assesses the CEO’s performance semi-annually against the approved objectives, which are related to the CEO Position Description and aligned with Shareholder public policy objectives, and the Corporate Plan. The governance standard established by the CSA for Executive compensation disclosure is to report by summary compensation table, complete with detailed formulas. However, the mandate for Executive compensation for Saskatchewan Crown corporations is established and monitored by the Owner, CIC, and as such, senior management compensation aligns with the guidelines established by CIC. Given these controls on Executive compensation, both the Board and senior management seek to provide information to the Owner, and any management compensation adjustments must fit within the parameters established by the Owner. The philosophy of providing market-based compensation is applicable throughout the Corporation, from senior management downwards: to set performance objectives and expectations at individual, departmental and corporate levels, and to work toward and measure the achievement of these performance objectives. A key principle in SaskEnergy’s compensation strategy is to provide fair and equitable pay representative of the individual performance of management employees with a target at the 50th percentile of the Western Canadian marketplace. The Human Resources and Safety Committee and the Board approve CEO and Executive compensation. Direct reports of the CEO, including all Executive members, are required by legislation to file and report the details of their compensation and benefits and any changes to the Clerk of the Saskatchewan Legislature. In addition, the Crown and Central Agencies Committee of the Legislative Assembly of Saskatchewan has, by policy, required Crown corporations, including SaskEnergy, to file an annual payee list that includes the total compensation of Executive members. The report is available on CIC’s website at www.cicorp.sk.ca in the Media Releases section. The Human Resources and Safety Committee and the Board annually review the details of these compensation payment reports.

The Corporation does not have a formal policy or targets regarding the representation of women in Executive officer positions. SaskEnergy is committed to equality of opportunity and has taken steps to increase the representation of women in management and in underrepresented roles within the Corporation. These include: proactively identifying talented individuals for leadership training programs and encouraging them to apply for more senior roles; tracking and reporting on diversity metrics; managing the succession plan process; identifying top talent and implementing formal personal development plans; and establishing mentorship relationships for women aspiring to management positions. There are currently three women (37.5 per cent) in Executive officer positions. Board Renewal and Appointment Appointment of Directors is ultimately made by the Government by Order in Council, upon recommendation of CIC and the Board of Directors. The Board, through the Environmental, Social and Governance Committee, also undertakes an evergreen approach in conducting an analysis of the skills and experience necessary for the composite blend, and full functioning of the Board and its Committees, and makes nomination recommendations to the Minister of Crown Investments. If required by the Shareholder or directed by Government, the Environmental, Social and Governance Committee is charged with leading the process to identify, recruit and recommend qualified candidates for appointment to the Board. The Committee continues to assess the skills and competencies for the Board and its Committees to support the strategic direction and operational needs of the Corporation. The Committee performs a skills gap analysis intended to assist in achieving a balance of the skills of Board members through the recruitment/appointment of new members. The Environmental, Social and Governance Committee may meet with potential candidates to assess the overall fit with the blend of skills and experience of the current Board, time availability, or any potential conflicts that could limit their full participation. The Environmental, Social and Governance Committee also makes annual recommendations to the Board regarding the appropriate structure, size and composition of the Board and its Committees, as well as the required qualifications. Board Orientation and Education The Environmental, Social and Governance Committee and the Corporation, under its Board of Directors Training Policy, has a comprehensive orientation curriculum and

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Corporate Governance

Director Remuneration Compensation received by Directors is fixed by CIC under The Crown Corporations Act, 1993. The Environmental, Social and Governance Committee has authority to recommend to the Board (and the Board to CIC) adjustments to such compensation. The Audit and Finance Committee receives quarterly reports with respect to the remuneration of Directors and reports any anomalies to the Board. The Committee reviews the annual payee disclosure report that includes total remuneration paid to Directors. Directors are paid an annual retainer for their services on SaskEnergy’s Board, as well as a set per diem fee for travel time and attendance at Committee and Board meetings, as follows: • Chair of the Board: annual retainer of $40,000; • Other Directors: annual retainer of $25,000; • Chair of Audit and Finance Committee: annual retainer of $3,500; • Chairs of other Committees: annual retainer of $2,500; • Committee members: $750 per day meeting fee; and • Directors also receive reimbursement for their reasonable out-of-pocket expenses including travel, meals and accommodations while performing their duties. Board members each sit on one of the three Committees. There were ten Board meetings and 14 Committee meetings this reporting period. The total remuneration paid to Directors (annual retainers, pro- rated for the portion of the fiscal year each Director was a member of or chaired a Committee, plus Committee per diems) was $355,168.74 + compared to $353,536** in 2019-20. The total business travel and meeting expenses paid to members of the Board were $5,270.14 + compared to $19,724** in 2019-20. +This amount was for the 12-month reporting period of April 1, 2020 to March 31, 2021. **The 2018-19 amount was for the 12-month period from April 1, 2019 to March 31, 2020.

training sessions to ensure that new and continuing Directors develop a strong understanding of SaskEnergy’s business and current challenges, as well as the roles of the Board and Committees and the individual contributions Directors are expected to make. Board members also participate in continuing education on industry issues, financial reporting, business operations, procedural issues and ethical obligations to enhance their skills and knowledge. Board training for 2020 was suspended due to the COVID-19 pandemic, and will resume when an in-person meeting can take place safely. It is currently scheduled for September 2021. Board members interact with management and employees through attending functions such as the employee service achievement awards or through touring corporate offices, facilities sites or business units as part of Board meetings. CIC also facilitates additional Director training as part of its Subsidiary Crown Directors Training Program. This year, CIC held three director training sessions. CIC also hosts meetings periodically throughout the year for the Chair of the Board and the Chairs of each of the Committees to discuss issues with the Chairs from other Saskatchewan Crown corporations. These meetings serve as forums to look at matters such as best practices and efficiencies, and to receive messaging from the Owner. Board and Director Performance Assessment To ensure adequate Board renewal, the Environmental, Social and Governance Committee conducts annual performance reviews for the Board, Committees, Chairs and individual Directors. It surveys the Directors to obtain feedback on the effectiveness and contribution of the Board, Committees, Chairs and individual Directors on a rotational, triennial basis. Assessments by the Committee include a skills matrix to ensure the Board possesses the requisite experience, expertise and business and operational insight for effective stewardship of the Corporation. Assessments also consider diversity and representation of women on the Board and its Committees, and by proactively identifying potential female candidates. These results are summarized and reported to the Board as well as to the CIC Board. The Environmental, Social and Governance Committee may utilize the assistance of an external consultant to conduct the survey task. The Environmental, Social and Governance Committee conducted an evaluation of all Board Committees and Committee Chairs for the for 2020-21 reporting period.

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Corporate Governance

MEMBERSHIP AND ATTENDANCE AT MEETINGS OF THE BOARD AND BOARD COMMITTEES FROM APRIL 1, 2020 TO MARCH 31, 2021

Board (7 mtgs)

Audit (6 mtgs)

Gov/SR (4 mtgs)

HRS (4 mtgs)

Legal Serv. (0)

Total Possible

Total Attended %

Member

Barber (Chair)

Barsi

100

Chickoski

100

Greenslade

100

Joorisity

Loewen

100

Moulin

100

Revet

100

Shaw

100

Svedahl

Sylvester

4 4

12 14

12 13

100

Wong

For purposes of this report, Directors who attended meetings in part were considered to be present.

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Stakeholder Engagement

Communications Models Employed Strong two-way communications models support the achievement of business and corporate results. The Corporation is committed to rigorous and professional communications practices that support the principles of timeliness, openness and transparency with its stakeholders. Customer and Public Communications SaskEnergy employs a wide range of methods, from print and online media to phone and face-to-face contact, to communicate with its more than 400,000 customers. SaskEnergy continues to emphasize the use of technology to make it easier for customers to access the information they want or need, such as their billing and meter reading data, and in the development of new platforms to better allow customers to contact SaskEnergy through their preferred method. For example, in 2020- 21, the Corporation launched new, modern websites for SaskEnergy and TransGas that offer more self-service options for customers. In addition, the Corporation introduced a new text messaging service to keep customers up to date on their SaskEnergy appointments. Sask 1st Call saw significant growth in the use of its service in 2020-21. Sask 1st Call is the initial customer contact for those requesting line locates to ensure underground facilities are clearly marked for safe excavation. They provide a screening and ticket notification service on behalf of 105 companies including SaskEnergy and TransGas. Customer line locate ticket volumes increased by 10 per cent in 2020-21 compared to 2019-20, with 64 per cent of those requests coming from online services, an increase of nine per cent from the previous fiscal year. Sask 1st Call continues to invest in its infrastructure to improve services to members. Investment in new ‘one call’ technology has provided Sask 1st Call members more targeted notifications ensuring only those who own underground infrastructure in a work area are notified of the need for line locates. Sask 1st Call also continues to promote the importance of ‘Click’ or ‘Call’ Before You Dig with the digging community to increase awareness of this service and safety initiative within the province. TransGas fosters personal contact with its 122 transportation and storage customers through dedicated account representatives that meet each customer’s needs. It also promotes contact through the TransGas Customer Dialogue Process, where customer rates and operational policies are jointly addressed before recommended implementation. SaskEnergy works effectively with the plumbing, heating and mechanical contracting industry, which is highlighted by the Industry Dialogue process

resulting in the creation of the SaskEnergy Network. There are 178 Residential Network Members in 54 communities and 72 Commercial Network Members in 16 communities. These private sector plumbing and heating contractors use the SaskEnergy Network brand to deliver downstream services to natural gas customers. Critical corporate initiatives, such as creating public awareness around energy efficiency and public safety (“Click Before You Dig”), are also promoted through multi-media advertising and communications campaigns, as well as direct-contact programs, such as contractor safety breakfasts, first responder training sessions and landowner mail-outs. SaskEnergy has a strong commitment to providing safe and reliable service to customers, ensuring they understand how to use natural gas safely and that the Corporation responds in a timely manner. This includes public awareness about what customers should do if they smell natural gas and how to protect themselves from carbon monoxide poisoning. Major corporate initiatives, such as changes to the Corporation’s delivery or commodity rates, are communicated through news conferences and public events, and are supported through information distributed through SaskEnergy’s website and on customer bills. Tools, such as e-billing and equalized payment plans, allow customers greater control over the management of their natural gas bills. The Corporation continues to analyze the usage of social media tools in its utility business context. The SaskEnergy website also provides access to corporate information, such as quarterly financial updates and annual reports, energy efficiency and safety-related information, as well as career opportunities and a streamlined process for charities and non-profits to request financial support through the Corporation’s community investment program. The high level of efficacy and support for SaskEnergy’s and TransGas’ customer communications approach is reflected through ongoing high levels of customer As a Crown corporation, SaskEnergy complies with the communications requirements set by the Shareholder and by statute, in accordance with the Board-approved external communications policy. Through the Board Chair, the Board is accountable to the Minister Responsible for SaskEnergy. The Minister functions as a communications liaison among the Corporation, CIC, Cabinet, the Provincial Legislature and the public. SaskEnergy fully complies with its statutory obligations or approval and disclosure of information. These responsibilities include: satisfaction in its independent surveys. Shareholder Communications

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Stakeholder Engagement

• Annual approval of the Corporation’s business/ performance management plan, including capital expenditures through its shareholder, CIC. • Annual disclosure through Crown and Central Agencies, a public legislative committee of government, of all payments greater than $50,000 to employees and suppliers, and of all grants, donations and sponsorships greater than $5,000. • Appearances before public committees of the legislature, including Crown and Central Agencies, by senior executives to answer questions relating to the business of the Corporation in preceding years. • Compliance with public requests for information, SaskEnergy also works cooperatively with CIC, the office of the Minister Responsible for SaskEnergy and Executive Council Communications to generate dialogue, understanding and support for corporate initiatives that affect stakeholders. These communications tools include briefing notes, face-to-face meetings and other information packages to ensure elected officials are able to represent the Corporation in the public and through the media, by speaking knowledgably on issues regarding the business operations of SaskEnergy. The Corporation is also expected to respond expediently to correspondence and case work submitted by the office of the Minister Responsible for SaskEnergy. Project-based Communications SaskEnergy’s distribution, transmission and storage projects can impact the communities in which they are occurring. In addition to fully complying with all legal and regulatory considerations, SaskEnergy will typically hold consultations with affected stakeholders in areas where projects are of greater scope or longer duration. Such communications initiatives include public open houses and meetings with local municipal councils, First Nations representatives and other stakeholders. These initiatives allow company officials to explain the environmental impacts of proposed activities, including proposed mitigation plans. They also provide opportunities to enhance general understanding of balancing the interests of The Freedom of Information and Protection of Privacy Act . the projects economic benefits and of natural gas as a heating source. Because Saskatchewan has approximately 75 First Nations Bands and 12 Métis Regions, a dedicated Indigenous Engagement group exists to better foster consultation, dialogue and relations. Regulatory Communications SaskEnergy is required to file any applications for delivery and commodity rate changes with the Saskatchewan Rate Review Panel (SRRP), an advisory panel that

provides formal recommendations to the Provincial Cabinet. The applications are available to the public. Typically, the SRRP will ask for additional information to assist in its review, and a public interaction component is provided through public meetings. SaskEnergy has not increased its commodity rate or delivery service rate since 2018. Its current commodity rate of $2.575 per GJ, the lowest in over 20 years, has been in effect since April 1, 2019. SaskEnergy has the third lowest total residential natural gas utility rate in Canada. TransGas’ proposed rate changes are discussed through the TransGas Customer Dialogue, a proxy with representatives from the producer, industrial end-user and gas marketer communities. After rate changes are discussed through Dialogue, they are provided to the Provincial Cabinet for approval. TransGas changed its rates for transportation and storage services, effective April 1, 2021. Rates increased between 6.8 per cent and nine per cent, with an average increase of eight per cent across all rate classes. The rate change is due to increased costs incurred by TransGas to provide high quality, safe and reliable service while focusing on system integrity and facility infrastructure. The last rate increase occurred nearly three years ago, on May 1, 2018. Employee Communications SaskEnergy employees are the most credible people to tell its story and the Corporation regularly communicates with its workforce of more than 1,100 employees to provide prompt and accurate information. Communication focuses on initiatives and updates related to SaskEnery’s Business Plan and aims to increase employee understanding of the delivery of essential energy to customers, enhance understanding of the natural gas industry as a whole, increase knowledge of SaskEnergy’s safety practices and environmental stewardship, and make employees better able to engage in meaningful discussions about the natural gas industry with friends, family and acquaintances. Recognizing the value of face-to-face communication, SaskEnergy relies on Senior Leaders, managers and supervisors to share messages within and across work teams in regular meetings and discussions, as much as possible. Other communication methods include company- wide email messages (InfoFlashes) and a corporate intranet site (innergy), which allows employees to access information related to the Corporation, stay informed on upcoming events and initiatives, comment on and ‘like’ articles, and visit sites for specific department related information. SaskEnergy also produces corporate videos that serve as informative, educational tools to keep employees up-to-date on major projects and initiatives that are taking place within the Corporation.

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