BOARD OF DIRECTORS
TERMS OF REFERENCE
PART I
COMPOSITION AND PROCEDURE
1.1 Composition
The board of directors (the "Board") of Veresen Inc. (the "Company") shall consist of such number of directors as may be fixed from time to time by the Board, not being less than three (3) nor more than fifteen (15). Each director elected holds office until the next annual meeting of the holders of Common Shares (“Shares”) of the Company (the “Shareholders”) or until his or her successor is duly elected or appointed. Management of the Company does not contemplate that any of the nominees will be unable to serve as a director but, if that should occur for any reason prior to the Meeting, such nominee will be removed from the list of nominees to be recommended to the Shareholders.
At the first meeting of the Board held following the annual meeting of Shareholders, the Board shall elect a chairperson to preside at all meetings of the Board. Where it is not appropriate to appoint an independent director as chairperson, an independent director shall be appointed as lead director.
1.2 Meetings
The Board meets at least five times a year and as many additional times as it considers necessary to carry out its responsibilities effectively. The Secretary of the Company is the Secretary of the meetings. The Board meets separately at each meeting without management (including any member of management who is a director) present.
1.3 Decisions
Decisions of the Board shall be evidenced by resolutions passed at meetings of the Board and recorded in the minutes of the meeting or by a resolution in writing signed by all directors entitled to vote on that resolution at a meeting of the Board.
1.4 Minutes
A copy of the draft minutes of each meeting of the Board shall be transmitted promptly by the Secretary to each director for adoption at the next meeting. A copy of any written resolutions evidencing decisions of the Board shall be transmitted promptly by the Secretary to each director.
1.5 Authority to Engage Advisors
Each director shall be enabled, subject to the approval of the Corporate Governance and Nominating Committee, to engage outside advisers, including counsel, as he or she determines necessary to carry out his or her duties as a member of the Board. The Company shall provide appropriate funding to compensate any such adviser, as determined by the Corporate Governance Committee in its capacity as a committee of the Board.
PART II
BOARD OF DIRECTORS MANDATE
2.1 Board Responsibilities
The Business Corporations Act (Alberta) requires directors to manage, or supervise the management of, the business and affairs of the Company. The Board carries out this responsibility through a stewardship role. The day to day management is delegated to the officers of the Company. In fulfilling this stewardship role the Board has the responsibility to:
(a) Oversee the development and implementation of the annual strategic, financial and operating plans, including annual targets for the Company.
(b) Oversee the development and implementation by management of a strategic planning process to identify, manage and monitor the opportunities and principal risks of the Company’s business and ensure the implementation of appropriate systems to manage these risks.
(c) Ensure that management implements and maintains appropriate internal controls and management information systems for the Company.
(d) Oversee senior management succession planning and relevant management development plans (including appointing, training and monitoring senior management).
(e) Ensure that management maintains an effective communication program that provides for timely communication by the Company with its Shareholders, debentureholders and other stakeholders including effective means to enable Shareholders, debentureholders and other stakeholders to provide feedback and communicate with senior management and the Board, and which communication program conforms to current practices for publicly traded entities in Canada.
(f) Appoint the President and Chief Executive Officer and other officers of the Company.
(g) Assess the performance of the President and Chief Executive Officer on at least an annual basis taking into account the recommendations of the Corporate Governance and Nominating Committee and any goals and responsibilities established for the President and Chief Executive Officer.
(h) Approve the compensation of the President and Chief Executive Officer, taking into account the recommendations of the Compensation Committee
(i) Appoint an Audit Committee comprised of independent directors, a Corporate Governance and Nominating Committee, a Compensation Committee and such other committees as the Board considers advisable to assist in carrying out its responsibilities effectively and to delegate to such committees any of the powers of the Board it is entitled to delegate pursuant to the Business Corporations Act (Alberta). The Board shall establish written Terms of Reference for each of any committees appointed by it and shall review such Terms of Reference on at least an annual basis.
(j) Appoint a chairperson for each committee of the Board.
(k) Ensure that all new directors receive a comprehensive orientation to the Board and the Company. The Board and the Company shall provide continuing education opportunities for all directors to maintain and enhance their skills and abilities as directors as well as to ensure knowledge and understanding of the Company’s business environment remains current.
(l) Conduct regular assessments to evaluate the effectiveness and contributions of the individual directors and the Board as a whole.
(m) Comply with the Company’s by-laws and the statutory and fiduciary obligations which generally exist for directors of publicly traded companies in Canada.
(n) Comply with and conduct periodic assessments of the Company’s Code of Business Conduct and Ethics and oversee compliance therewith within the Company.
(o) Satisfy itself, to the extent feasible, as to the integrity of the President & Chief Executive Officer and other executive officers of the Company and ensure that senior management creates a culture of integrity throughout the Company.
(p) Establish and maintain a set of governance principles for the Company including practices that ensure that the Board functions independently of management.
PART III
RESPONSIBILITIES OF DIRECTORS
3.1 Director Responsibilities
The Business Corporations Act (Alberta) requires directors in exercising their powers and discharging their duties to act honestly and in good faith with a view to the best interests of the Company, and to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. As a member of the Board, each director should:
(a) Exercise good judgment with integrity and with the benefit of his or her abilities and experience. Oversee the development and implementation of the annual strategic, financial and operating plans, including annual targets for the Company.
(b) Identify and disclose any conflict of interest to allow appropriate review.
(c) Respect confidentiality.
(d) Devote the necessary time and attention to be able to make an informed decision on issues.
(e) Be prepared for and strive to attend all Board meetings, to participate fully and frankly in the deliberations and discussions of the Board.
(f) Ask for all the information he or she believes is necessary to make informed decisions.
(g) Be generally knowledgeable of the Company’s operations and the industry within which it operates.
(h) Have an understanding of the regulatory, legislative, business, social and political environments within which the Company operates.
(i) Be an available resource to management.
(j) Be an effective ambassador and representative of the Company.
(k) Become acquainted with the officers and senior management of the Company.
(l) When appropriate, communicate with the Chair of the Board and the President and Chief Executive Officer between meetings.
(m) Encourage free and open discussion at the meetings of the Board.
(n) Participate on committees, be knowledgeable of the mandate of the committee and ensure that the committee’s activities are consistent with, and fulfill, the mandate.
