Board of Directors
Good governance includes developing and sustaining a culture that guides expected behaviour and encourages our staff to conduct business ethically and legally, which is fundamental to generating long-term shareholder value. Our governance structure also provides management systems that ensure corporate responsibility is embedded in our work.
Recognizing the importance of a strong Board of Directors
Our Board has five committees that oversee, evaluate and make recommendations on a variety of specific issues. Each committee has an approved mandate outlining the responsibilities and authorities of the committee.
Our Board of Directors oversees our governance practices, processes, controls and policies to help ensure we live up to our purpose, promise and commitments, maintain our relationships and protect our ability to grow our business. Simply put, good governance is necessary to keep our business running effectively.
One of the Nominating and Corporate Governance Committee’s primary duties and responsibilities is to identify individuals qualified to become Board members and recommend to the Board nominees proposed for election. The committee seeks to ensure there is an appropriate range of skills, expertise and experience on our Board. It also reviews and evaluates suggestions for candidates from individual directors, the President & Chief Executive Officer and professional search organizations.
The skills matrix on page 13 of our 2017 Management Information Circular illustrates the breadth of skills and experience of our current Board members. These are skills and experience that were identified as being important to Cenovus following a review of recommended best practices, the Board mandate, the Board Diversity Policy, Cenovus's long-range outlook and peer group disclosure.
The skills matrix also identifies the categories of skills and experience considered by the Nominating and Corporate Governance Committee when assessing the qualifications of the Board. Categories for our Board that are relevant to their corporate responsibility oversight role include:
- Strategic planning & execution
- Risk management
- Human resources
- Compensation & organizational management
- Government & stakeholder relations
- Safety, environment & health
Cenovus has an ongoing continuing education program to enhance Board members’ skills and understanding of our business environment and emerging issues. This includes issues related to sustainability topics identified in our Corporate Responsibility Materiality Matrix. Internal Board development activities occur regularly throughout the year. Development activities for 2016 are outlined below and are also reported in our 2017 Management Information Circular. In addition to internal continuing education, directors have the opportunity to attend external education programs to assist in their development as Board members. All external education programs are approved by the Board Chair.
|Year||Board development topic|
Board engagement on climate change
Ensuring that our Board members understand Cenovus, the industry and our regulatory environment in the context of climate change is critical to ensuring that they are effective in their roles as stewards of Cenovus. In addition to receiving regular briefings that discuss climate change and related topics, the Board conducts an extensive annual review of risk factors for Cenovus, including climate change related risks, as part of the preparation of the company’s Annual Information Form (AIF). In 2016, Board members also participated in a workshop specifically dedicated to the issue of climate change.
In addition, the Board engages on the topic of climate change as part of its strategy development process, which includes an annual “blue-sky” strategy session and strategic planning session. This process includes extensive discussions with management where near- and long-term considerations, as well as opportunities and risks for our business are discussed. This includes topics related to climate change and Cenovus’s ability to remain resilient under a variety of low-carbon-future scenarios.
Board members are also informed and engaged on issues relating to climate change by the Safety, Environment and Responsibility (SER) Committee. The committee is responsible for reviewing and reporting to the Board actions and initiatives the company is taking to mitigate environmental, corporate responsibility or other risks that could affect Cenovus’s activities, plans, strategies or reputation. This has been a focus of the SER Committee since Cenovus’s inception. In 2016, the committee held three meetings in which key environmental concerns, including climate change, and their potential impact on the company were identified and discussed. Cenovus’s greenhouse gas emissions risks and liabilities are specifically reviewed by the SER Committee at least once a year. The committee’s mandate also includes reviewing the safety, environment and other corporate responsibility disclosures in Cenovus’s AIF and making a recommendation for approval. This includes disclosures regarding risk factors related to climate change.
Our objective is to assemble a board with the range of skills, expertise and experience it needs to carry out its responsibilities effectively, and help deliver on Cenovus’s purpose and promise as a company. The composition of the board should strike a balance between the need to have experienced directors and deep institutional knowledge and the need for renewal and new perspectives.
As part of our Board Diversity Policy, we’ve included an aspirational target to have women represent at least one-third of the independent members of the Board by 2020. Currently, 20 percent of our independent directors are women.
Ongoing board renewal is also a key element of good governance.
In April 2016, Richard Marcogliese and Rhonda Zygocki joined our Board of Directors. Mr. Marcogliese and Ms. Zygocki have each had long careers with large integrated oil and natural gas companies, giving them strong experience in the areas of resource development and production as well as refining. Mr. Marcogliese has been involved in the U.S. refining industry for more than 40 years, including more than 25 years with Exxon Mobil Corp. Ms. Zygocki spent 34 years with Chevron Corp. in a variety of senior management and executive leadership positions.
Learn more about Richard Marcogliese »
Learn more about Rhonda Zygocki »
In December 2016, Claude Mongeau joined the Board of Directors. Mr. Mongeau has experience in many sectors of the economy in both Canada and the U.S, including extensive rail industry experience. He served as President and Chief Executive Officer of Canadian National Railway Company (CN) from 2010 to 2016.
Learn more about Claude Mongeau »
Michael Grandin retired as Chair of our Board of Directors at the conclusion of our 2017 Annual Meeting of Shareholders on April 26. Following the 2017 shareholders meeting, Patrick Daniel, who has been a member of the Cenovus Board since the company launched in November 2009, was appointed Board Chair and became Chair of the Nominating and Corporate Governance Committee. As Board Chair, Mr. Daniel is an ex officio non-voting member of the Audit, Human Resources and Compensation, Reserves, and SER committees by standing invitation, and he may vote when necessary to achieve quorum. Mr. Daniel is a seasoned Board member with a wealth of business experience.
Learn more about Patrick Daniel »
Valerie Nielsen also retired from the Board of Directors at the conclusion of our 2017 Annual Meeting of Shareholders.
Susan Dabarno joined the Board of Directors at our 2017 Annual Meeting of Shareholders. Ms. Dabarno has extensive wealth management and financial expertise and served as Executive Chair of Richardson Partners Financial Limited from 2009 to 2010, as well as President and Chief Executive Officer from 2003 to 2009. In addition, Ms. Dabarno previously served as President and Chief Operating Officer of Merrill Lynch Canada Inc.
Learn more about Susan Dabarno »
Safety, Environment and Responsibility (SER) Committee
The SER Committee of the Board oversees and reviews matters relating to our Corporate Responsibility Policy which includes safety, social, environmental, economic, business conduct and ethical considerations. The Committee is made up of independent directors and meets at least three times a year to review:
- Our safety, regulatory and environmental performance, benchmarked against our peers based on injury frequency, greenhouse gas emissions, regulatory compliance, spill incidents and reclamation and abandonment activity
- Trends and high-risk observations from our internal operations assurance program
- Significant contraventions of regulations or policies such as compliance with our Code of Business Conduct & Ethics
- Emerging federal and provincial legislation, regulations and decisions affecting the environment, fiscal structure and market access
Learn more about the SER Committee »
The SER Committee tours the Bruderheim Energy Terminal
In July 2016, the Board visited our Bruderheim rail terminal for the annual SER Committee tour. Staff had the opportunity to highlight for the Board operating improvements achieved at the terminal since it was acquired by Cenovus in 2015. In addition to participating in the tour, the Board attended a lunch with staff and local community members, where they were able to discuss our safety, environment and corporate responsibility performance both at site and in the community.