corporate governance

Syncrude Canada Ltd. is a private company incorporated under the Business Corporations Act of Alberta.

Syncrude’s bylaws stipulate that shares in the corporation may only be held by the shareholders in proportion to their interest in the Syncrude Joint Venture, and that Syncrude Canada Ltd. may not carry on business or activities other than to act as contract operator of the Syncrude Project on behalf of the shareholders.

Board of Directors

The Board of Directors of Syncrude is responsible for governing the statutory affairs of the corporation. It meets formally on an annual basis to complete statutory requirements and to review the results of the corporation. The Board functions on a more frequent basis through two Board Committees, the CEO Committee and the Human Resources, Compensation and Pension Committee. The Board and its committees are composed of Directors appointed by the shareholders of the corporation.

The Board of Directors takes seriously its duties and responsibilities with respect to the principles of good corporate governance. It is the Board’s view that its approach to directing the business of Syncrude Canada Ltd. is comprehensive, effective, and consistent with generally accepted standards of Canadian corporate governance.

CEO Committee

The CEO Committee provides a chief executive officer review and approval, or endorsement of the following matters, and any other review, direction or approval as the Committee in its sole discretion deems appropriate and in the interests of the Corporation:

review and approve the Corporation’s succession plans for its senior management team;
conduct an annual performance review of the Chief Executive Officer of the corporation;
review and approve the compensation of the Chief Executive Officer as well as the other officers of the corporation and any changes to their compensation as recommended by the Compensation Committee; and
review and endorse the long term strategic plan of the Syncrude Project and the business plans of the corporation.

Human Resources, Compensation and Pension Committee

The Human Resources, Compensation and Pension Committee develops, for consideration by Syncrude’s Board of Directors, recommendations on the following matters:

The management structure and senior management succession planning for Syncrude;
Compensation, benefits and other issues concerning human resources programs;
Oversight of the Retirement Plan for Syncrude employees to discharge the corporation’s duties as administrators of the Plan under the Employment Pension Plans Act;
Endorsement of the appointment of the Actuary and the Trustee & Custodian of the Syncrude Retirement Plan;
Reviewing or amending the Statement of Investment Policies and Procedures and the Statement of Investment Principles and Beliefs for the Syncrude Retirement Plan and any similar statements or documents that are intended to replace them;
Reviewing the annual audited statement of the Syncrude Retirement Plan;
Reviewing actuarial valuations of the Syncrude Retirement Plan fund and the post-retirement benefits and request any additional valuations of the fund as the Committee deems necessary;
Reviewing and evaluating methods to secure funds for any unfunded liabilities arising from the pension obligations of the corporation to its employees, including those in respect of post-retirement health and dental benefits, retiree life insurance, and the Excess Pension Benefit Plan, to the extent the members of the Committee deem necessary or appropriate;
Receiving and reviewing any pension governance, administration or funding recommendations; and
Reviewing the communication and education policy in respect of retirement benefits, options and risks for employees of the corporation.

Management Committee

The structure and governance of the Syncrude Project includes a Management Committee, which meets regularly and oversees the project on behalf of the Joint Venture participants. Each Joint Venture participant has two representatives, one of which is an alternate on this committee, and votes its percentage interest in the Project.

The Management Committee reviews and approves the Syncrude Project’s strategic plans, business plans, annual budget and major capital appropriations. In addition, it reviews overall performance, both operationally and financially. The Management Committee is chaired by one of the Joint Venture participants’ representatives; the Chair is currently held by Marcel Coutu, Chief Executive Officer of Canadian Oil Sands Limited.

The Management Committee has appointed sub-committees, and has delegated powers and duties as appropriate, to effectively support Syncrude and its owners. The sub-committees report to the Syncrude Management Committee. Each Joint Venture participant and Syncrude is entitled to nominate one primary representative and one alternate representative. As well, each Joint Venture participant may bring any required knowledge experts to sub-committee meetings. The Chairman and Secretary are appointed by the Management Committee. The Sub-committee can create work groups reporting to the sub-committee to facilitate detailed analysis, investigation and recommendations on any matter.

Operations, Technical, Security, Safety, Health and Environment Sub-Committee

The Operations, Technical, Security, Safety, Health and Environment Sub-Committee oversees all aspects of Syncrude operations, security, safety, health and environment and the associated investments and technical/business plans to support the existing operations.

Growth/Development Planning/Major Projects Sub-Committee

The Growth/Development Planning/Major Projects Sub-Committee oversees all aspects of growth and business development planning and all matters related to stewardship of major projects.

Crude Supply and Coordination Sub-Committee

The Crude Supply and Coordination Sub-Committee provides feedback to the operator (Syncrude Canada Ltd.) on short-term shipment plans and transportation issues with emphasis on both quality and volume. The Sub-Committee also discusses long-term market development strategies in order to provide advice and guidance to the Joint Venture on quality investment and long-term marketability.

Audit and Business Controls Sub-Committee

The Audit and Business Controls Sub-Committee oversees all aspects of Syncrude’s internal control systems and financial and related disclosures as required under relevant legislation and by all Joint Venture participants for their respective regulatory reporting requirements.

Code of Ethics and Business Conduct

Syncrude has a number of Code of Ethics and Business Conduct policies that are designed to foster the high level of ethical conduct expected by our many internal and external stakeholders. Syncrude stewards the application of these policies and reports periodically to the Syncrude Audit and Controls Committee and to the Audit and Business Controls Sub-Committee of the Management Committee.

In addition to internal processes, Syncrude has an external system for the reporting of concerns about corporate conduct. Employees, contractors and members of the public may file their concerns anonymously and confidentially through EthicsPoint, at www.ethicspoint.com or 1-800-493-1866. This information is available internally and through Syncrude’s external website at www.syncrude.com