PrairieSky is committed to good governance practices, proactive risk management and high ethical standards. Our governance practices are routinely reviewed and assessed, and when necessary, modified to ensure they meet expectations for best practices.
In accordance with best practices, the majority of PrairieSky’s Board of Directors, a total of 7 individuals, are independent and unrelated as specified in NI 58-101. The exception to this is Andrew Phillips, President and Chief Executive Officer. A director is independent if he or she has no direct or indirect material relationship with the Company or its subsidiaries. A “material relationship” is a relationship which could, in the view of the Board, be reasonably expected to interfere with the exercise of a director’s independent judgment. The Chairman of the Board is an independent director and is responsible for leading and managing the board in discharging its responsibilities.
Board Mandate & Position Descriptions
The primary responsibility of the Board is to appoint competent management and to oversee the management of the Company with a view to ensuring corporate conduct in an ethical and legal manner through an appropriate system of corporate governance and internal controls.
The Board has absolute and exclusive power, control and authority over the property and affairs of the Company.
Subject to the provisions of the Business Corporations Act (Alberta), the Board may delegate certain of those powers and authority that the directors of the Company, or independent directors, as applicable, deem necessary or desirable to effect the actual administration of the duties of the Board.
The Chair of the Board will be independent and the role of the Chair of the Board will be to effectively manage and to provide leadership to the Board and to ensure that the policies and procedures adopted by the Board allow the Board to function independently of management. Where matters arise at meetings of the Board which require decision making and evaluation that is independent of management and interested directors of the Company, directors will hold an “in-camera” session among the independent disinterested directors, without management present at such meeting.
A copy of the Board of Directors Mandate is available here.
The Board has adopted written guidelines for the Chair of the Board (available here), the Chair of each of the Audit Committee, the Governance and Compensation Committee, the Reserves Committee (available here) and the President and Chief Executive Officer of the Company (available here).
The primary responsibilities of the Chair of the Board will include:
- ensuring that the Board is properly organized, functions effectively and meets its obligations and responsibilities in all aspects of its work, including those relating to corporate governance matters; and
- working with the Chief Executive Officer to co-ordinate the affairs of the Board and ensure effective relations with the directors of the Company, shareholders, other stakeholders and the public.
The responsibilities of the Chair of each committee will include:
- ensuring that their respective committee is properly organized, functions effectively and meets its obligations and responsibilities in accordance with its mandate; and
- to liaise and communicate with the Chair of the Board to co-ordinate input from the committee for Board meetings.
The primary responsibilities of the President & Chief Executive Officer will include:
- providing general direction and management of the business and affairs of the Company in accordance with the corporate strategy and objectives approved by the Board, within the authority limitations delegated by the Board; and
- establishing processes of supervision of the business and affairs of the Company that are consistent with corporate objectives, ensuring that procedures are in place for proper external and internal corporate communications to all stakeholders, and monitoring and reporting results to the Board.
The Board has appointed three standing committees: the Audit Committee, the Governance and Compensation Committee and the Reserves Committee.
|Audit Committee||Governance and Compensation Committee||Reserves Committee|
|James M. Estey||Member|
|P. Jane Gavan||Member|
|Margaret A. McKenzie||Chair|
|Myron M. Stadnyk||Chair||Member|
|Sheldon B. Steeves||Member||Member||Chair|
|Grant A. Zawalsky||Member|
View Leadership here.
The Audit Committee members are independent and financially literate within the meaning of that term under NI 52-110. The specific responsibilities of the Audit Committee are set out in the Audit Committee Mandate.
The Committee’s primary duties and responsibilities are to:
- review management’s identification of principal financial risks and monitor the process to manage such risks;
- oversee and monitor the Company’s compliance with legal and regulatory requirements;
- oversee and monitor the integrity of the Company’s accounting and financial reporting processes, financial statements and system of internal controls regarding accounting and financial reporting and accounting compliance;
- oversee audits of the Company’s financial statements;
- oversee and monitor the qualifications, independence and performance of the Company’s external auditors;
- provide an avenue of communication among the external auditors, management and the Board; and
- report to the Board regularly.
The Company believes that each of the members of the Audit Committee possesses substantially all of the following:
- an understanding of the accounting principles used by the Company to prepare its financial statements;
- the ability to assess the general application of such accounting principles in connection with the accounting for estimates, accruals and reserves;
- experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, or experience actively supervising one or more individuals engaged in such activities; and
- an understanding of internal controls and procedures for financial reporting.
For a summary of the education and experience of each member of the Audit Committee that is relevant to the performance of responsibilities as a member of the Audit Committee,
see Board of Directors.
Governance and Compensation Committee
The Governance and Compensation Committee members are all independent for the purposes of NI 58-101. The specific responsibilities of the Governance and Compensation Committee are set out in the Governance and Compensation Committee Mandate.
Its primary function is to assist the Board in carrying out its responsibilities by reviewing corporate governance and compensation issues in support of the achievement of the Company’s business strategy and making recommendations to the Board as appropriate. In carrying out its mandate, the Committee is expected to (i) act in an advisory capacity to the Board and (ii) evaluate the performance of the Committee on an annual basis.
The Committees roles and responsibilities are to:
- develop, implement and monitor governance standards and best practices;
- review the mandates of the Board and its committees;
- regularly assess the effectiveness of the Board as a whole, the committees of the Board and the contributions of individual directors;
- oversee the preparation of the annual “Statement of Corporate Governance Practices”;
- identify and recommend individuals for nomination as members of the Board and its committees and for appointment as officers; and
- review and recommend to the Board all matters pertaining to the compensation of directors and management.
The Reserves Committee members are all independent for purposes of NI 51-101. The specific responsibilities of the Reserves Committee are set out in the Reserves Committee Mandate.
The primary role of the Reserves Committee is to:
- act in an advisory capacity to the Board;
- review the Company’s procedures relating to disclosure of information with respect to crude oil, natural gas and NGL reserves and resources data;
- (iii) annually review the selection of the qualified reserves evaluators or auditors chosen to report to the Board on the Company’s crude oil, natural gas and NGL reserves and resources data; and
- (iv) review the Company’s annual reserves and resources estimates prior to public disclosure.
Assessment of Directors
Orientation & Continuing Education
The orientation and continuing education of the directors of the Company is the responsibility of the Governance and Compensation Committee. The details of the orientation of new directors will be tailored to their needs and areas of expertise and will include the delivery of written materials and participation in meetings with management and directors. The focus of the orientation program will be on providing new directors with:
- information about the duties and obligations of directors;
- information about the Company’s strategy and business;
- the expectations of directors;
- opportunities to meet with management and any other senior employees or consultants designated for this purpose; and
- access to documents from recent meetings of the Board.
Nominations, Elections & Term
The Governance and Compensation Committee shall be responsible for recommending suitable candidates for nomination for election as directors of the Company in accordance with the terms of its mandate.
As a whole, the following provisions are intended to provide shareholders, directors and management of the Company with a clear framework for nominating directors.
Advance Notice of Nomination of Directors Provision
Subject only to the Act and the articles, only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation (Bylaw 1, section 4.4).
Nominations of persons for election to the board may be made at any annual meeting of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors:
- by or at the direction of the board, including pursuant to a notice of meeting,
- by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the Act, or a requisition of the shareholders made in accordance with the provisions of the Act, or
- by any person (a “Nominating Shareholder”):
- who, at the close of business on the date of the giving of the notice provided for below in this Section 4.4 and on the record date for notice of such meeting, is entered in the securities register of the Corporation as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting, and
- who complies with the notice procedures set forth below in this Section 4.4.
The Company’s bylaws “advance notice provisions” are designed to:
(i) facilitate an orderly and efficient annual meeting or, where the need arises, special meeting, process;
- ensure that all shareholders receive adequate notice of director nominations and sufficient information with respect to all nominees; and
- allow shareholders to register an informed vote having been afforded reasonable time for appropriate deliberation.
Deadline for Nominations from Shareholders of Record
The provisions of the by-laws fix a deadline (being not less than 30 days before the date of an annual meeting of shareholders and, in the case of a special meeting, the 15th day following the day on which the first public announcement of the date of the special meeting of shareholders was made) by which holders of record of common shares must submit director nominations to the Company prior to any annual or special meeting of shareholders, and also set forth the information that a shareholder must include in the notice to the Company for the notice to be in proper written form in order for any director nominee to be eligible for election at any annual or special meeting of shareholders. (Bylaw 1, section 4.4 c)
Election and Term
The election of directors shall take place at each annual meeting of shareholders and all the directors then in office shall retire but, if qualified, shall be eligible for re-election.
The number of directors to be elected at any such meeting shall be the number of directors then in office unless the board otherwise determines.
Where the shareholders adopt an amendment to the articles to increase the number or minimum number of directors, the shareholders may, at the meeting at which they adopt the amendment, elect the additional number of directors authorized by the amendment.
If an election of directors is not held at the proper time, the incumbent directors shall continue in office until their successors are elected. The election shall be by resolution. (Bylaw 1, section 4.3)
Board Nominees Must Receive Majority of Votes “For”
The Board has adopted a policy requiring that a director tender his or her resignation if the director receives more “withhold” votes than “for” votes at any meeting where shareholders vote on the uncontested election of directors. The Governance and Compensation Committee will consider any such resignation and make a recommendation to the Board. In the absence of special circumstances, it is expected that the Board will accept the resignation consistent with an orderly transition. The director will not participate in any Governance and Compensation Committee or Board deliberations on the resignation offer. It is anticipated that the Board will make its decision to accept or reject the resignation within 90 days.
Compensation of Directors & Officers
The remuneration of the directors of the Company will be set and periodically reviewed by the Board on the recommendation of the Governance and Compensation Committee.
The compensation of management will be periodically reviewed by the Board on the recommendation of the Governance and Compensation Committee. For more detailed information please view the Company’s public filings on SEDAR at www.sedar.com.
Officers Deferred Share Unit Plan
PrairieSky Director DSU Plan
Share Unit Incentive Plan
Stock Option Plan
Corporate Governance Polices and Related Documents
The following corporate policies, practices and By-Laws outline the basis of PrairieSky’s corporate governance processes. For further information, please contact PrairieSky Royalty’s Corporate Secretary at firstname.lastname@example.org
Business Code of Conduct
PrairieSky is committed to conducting its business ethically, legally, and responsibly. In keeping with that commitment, our Business Code of Conduct and any related policies, practices and guidelines, as approved and implemented by the board of directors of the Company (the “Board“) and senior management from time to time, will be used in identifying and managing ethical situations and making sound, ethical business decisions to reflect PrairieSky’s core values of honesty, integrity and fairness.
Supplier Code of Conduct
PrairieSky is committed to conducting its business ethically and legally. In keeping with that commitment, our Supplier Code of Conduct highlights our core values of honesty, integrity and fairness and is a guide to the standard of behaviour expected of consultants, contractors, advisors and other business partners through which PrairieSky procures goods and services, as well as their full-time and part-time employees, sub-contractors and sub-suppliers.
The treatment and disclosure of information about the business activities and affairs of public corporations is governed by a strict set of laws and regulations applicable to the business of PrairieSky.
Our Disclosure Policy applies to employees, contractors, officers and directors of the Company, including any subsidiaries thereof from time to time and outlines the procedures and practical guidelines for the consistent, transparent, balanced, regular and timely public disclosure and dissemination of material information (as defined below) and non-material information by covered persons.
Investigations Practice Policy
PrairieSky is committed to conducting its business ethically and legally. In keeping with that commitment, the purpose of our Investigations Practice Policy is to provide an effective, consistent and appropriate procedure by which all incidents that potentially violate the Company’s Business Code of Conduct and any related policies, practices and guidelines, as approved and implemented by the board of directors of the Company and senior management, or statutes, regulations, rules and policies applicable to the Company or the workplace, are properly received, reviewed, investigated, documented and brought to an appropriate resolution.
PrairieSky’s stakeholders rely upon the fair and accurate reporting of all material financial and other facts regarding the Company, its enforcement of our Business Code of Conduct and its compliance with all regulatory requirements. Employees and third parties are urged to report any suspected violations of the Company’s:
- Business Code of Conduct,
- Supplier Code of Conduct,
- Disclosure Policy,
- or complaints regarding accounting, internal accounting controls or auditing matters or any questionable accounting or auditing matters.
The Company’s Investigations Practice Policy outlines how a report¹ will be treated once it is made and includes whistleblower protection for complainants. The Company will not allow retaliation for reports made lawfully and in accordance with such policy.
ConfidenceLine has been selected by PrairieSky Royalty Ltd. as its authorized external service provider for the purpose of reporting unethical or improper business conduct, grievances, or complaints. This service is open to all employees or third parties of PrairieSky Royalty Ltd.
The ConfidenceLine e-Web reporting system offers a secure, state of the art, web reporting communications process that allows for direct and confidential communication to report any unethical or improper business practices, grievances, or complaints.
Securities Trading & Insider Reporting Policy
Our Securities Trading and Insider Reporting Policy applies to employees, contractors, officers and directors of PrairieSky Royalty Ltd., including any subsidiaries (collectively, “covered persons“).
This Policy is intended to safeguard against such trading or dealing, and against the appearance of such trading or dealing, by:
- restricting the trading activities of employees, contractors or directors that may know, or be presumed to know, of undisclosed material information,
- prohibiting derivative transactions by directors and officers, and
- requiring Reporting Insiders to comply with the reporting requirements applicable to certain trading activities as required by securities laws.
Bylaw 1, April 11, 2014
Certificate and Articles of Amalgamation
Board Diversity Policy
PrairieSky recognizes the benefits of having a diverse Board. Nomination and appointment of candidates which provide for multiple perspectives, skills, expertise, industry experience and personal characteristics such as age, gender, ethnicity and other distinctions, all contribute to the continued success of the organization. At PrairieSky, these differences will be considered in determining the optimum composition of the Board and when possible will be balanced appropriately.
Our Board Diversity Policy is intended to set out the framework for PrairieSky’s approach to Board diversity and outline the key criteria for the composition of the Board that promotes PrairieSky’s commitment and aspirational targets to diversity and inclusion.
Board Renewal Policy
The Board of PrairieSky oversees the evaluation, assesses and considers the effectiveness, of the Board as a whole, the committees of the Board and the contribution of individual members on a periodic basis. Through these and other measures, the Board effectively monitors and evaluates its effectiveness and diversity while balancing the value of experience and continuity of its incumbent members. The Board does however recognize that periodic board renewal may offer the benefit of new perspectives and ideas and has adopted our Board Renewal Policy to counterbalance the benefits of continuity of leadership with the introduction of diverse views and experience.
Shareholder Engagement Policy
The Board of PrairieSky believes in the importance of engaging in constructive communication with PrairieSky’s shareholders. Constructive engagement with shareholders can provide valuable insight that will assist the Board in maintaining the high standards of governance to which the Board is committed. The Board, acting on the recommendation of the governance and compensation committee of the Board (the “Governance and Compensation Committee“), has adopted our Shareholder Engagement Policy to promote open and sustained dialogue with PrairieSky’s shareholders.