Board of Directors Mandate and Selection
The primary duty of Ovintiv’s Board is to appoint a competent executive team and oversee management of the business, maximize shareholder value and ensure corporate conduct in an ethical and legal manner through appropriate corporate governance and internal controls. Directors should apply their business judgement to act in what they reasonably believe to be in the best interests of Ovintiv in a manner consistent with their fiduciary duties.
Directors are expected to attend each meeting of the Board and their assigned committees. Ovintiv’s directors review all materials sent to them in advance of meetings and engage in regular evaluation of the Board’s effectiveness, its committees and individual directors.
Each director is expected to understand the nature and operations of Ovintiv’s business and the external factors which may impact the Company. The Board is responsible for approving the strategic plan and any transaction that would have a significant impact on the plan. The Board must review strategic plans with management and evaluate Ovintiv’s performance against the plan. The Board holds annual dedicated strategic planning sessions, or more frequently if the Board deems it necessary, to evaluate Ovintiv’s progress relative to the plan, as well as the significant opportunities, challenges and potential risks the company may face. Major operational and financial objectives and potential significant capital allocations also are to be discussed at the dedicated strategic planning sessions.
The Board approves annual operating and capital budgets to ensure it has the necessary information to enable it to take any remedial action necessary. The Board reviews annually, and more frequently, if the directors deem it necessary, the performance of each of the Company’s core asset areas. They also evaluate the strength of Ovintiv’s competitive position and the relative returns it is delivering to its shareholders.
The Board must ensure that communications with shareholders and other interested parties is available and welcomed, particularly as they relate to Ovintiv’s strategies, policies and risk profile.
The selection of Board members is critical for successful governance. The NCG Committee assists the Board in carrying out its responsibilities by reviewing corporate governance and nominations issues and making recommendations to the Board as appropriate. Pursuant to the Nominating and Corporate Governance Committee Mandate, the NCG Committee identifies individuals qualified to become Board members and recommends potential new Board members. The NCG Committee will report at least annually to the Board.
The Board of Directors shall be comprised of a majority of independent directors. The independence of each director shall be determined in accordance with applicable securities laws and the rules of any stock exchange on which securities of the Corporation are listed for trading. A minimum of 25% of the members of the Board must be Canadian residents.
The Nominating and Corporate Governance Committee (NCG) shall annually review the skills, knowledge and business expertise of individual directors, in considering nominations to the Board. The objective of this review is to maintain a highly skilled and experienced Board to provide strong and effective oversight and to steward Ovintiv’s future growth. Accordingly, the Board has established certain criteria to consider in evaluating candidates for appointment or election to the Board, including but not limited to:
- Ability and willingness to dedicate adequate time and effort to Board and committee matters.
- Diverse professional experience, skills and background, including diversity and geographic representation.
- Experience overseeing governance practices.
- Experience with mergers, acquisitions and/or divestitures for a major public company.
- Experience with various aspects of natural gas, oil and natural gas liquids development and operations, including exploration, marketing and production.
- Experience working with all levels of government or gained public relations or government experience as a senior executive in a major public company.
- Experience with reviewing externally disclosed natural gas and oil reserves and resources data and reports.
- Experience identifying principal corporate risks to ensure management implements the appropriate steps to manage and mitigate risks as a senior executive in a major public company.
- Compatibility with the independence and other qualification tests established by the Corporation, applicable law and the rules and regulations in accordance with applicable securities laws and any stock exchange on which securities of the Corporation are listed for trading.