CORPORATE GOVERNANCE
INDEPENDENCE The matter of “independence from management” is based on the definition set by 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 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., 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 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. 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 overall Strategic Plan, annual Business 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: www.saskenergy.com/about_ saskenergy/governance.asp.
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