The Board of Directors and Management of Baytex are committed to ensuring proper corporate governance practices that meet current regulatory requirements.
Baytex complies and will continue to comply with all applicable regulations with a goal of providing transparency and accountability in our corporate governance practices. There is no significant difference between the corporate governance practices which Baytex follows, and those generally followed in the United States.
The board of directors of Baytex (the "Board") is responsible for the stewardship of Baytex and its subsidiaries. The Board’s mandate includes:
The Board holds regularly scheduled meetings to review the business affairs of Baytex. At each meeting of the Board and its committees, an opportunity is provided for the independent members to meet independently of the non-independent members and members of management.
The board of directors of Baytex is currently comprised of ten members: James L. Bowzer, John A. Brussa, Raymond T. Chan, Edward Chwyl, Trudy M. Curran, Naveen Dargan, R.E.T. (Rusty) Goepel, Gregory K. Melchin, Mary Ellen Peters and Dale O. Shwed.
Based on the definition of "independence" contained in National Instrument 58-101 "Disclosure of Corporate Governance Practices" and a review of the applicable factual circumstances (including financial, contractual and other relationships), the Nominating and Governance Committee has determined that eight of our ten directors, representing 80% of the directors, are independent. These eight independent directors are: John A. Brussa, Edward Chwyl, Trudy M. Curran, Naveen Dargan, R.E.T. (Rusty) Goepel, Gregory K. Melchin, Mary Ellen Peters and Dale O. Shwed.
James L. Bowzer is not considered to be independent as he currently serves as our Chief Executive Officer. Raymond T. Chan is not considered to be independent as he served as an executive officer within the last three years. Under National Instrument 58-101 "Disclosure of Corporate Practices", Mr. Chan will not be considered independent until May 31, 2017. As a result, we will continue to use a Lead Independent Director in our governance structure.
As Chairman of the Board, Raymond T. Chan provides overall leadership to our Board. Among other things, the Chairman of the Board maintains a liaison and communication with (i) the Lead Independent Director, the other directors and the committee chairs to co-ordinate input from directors and optimize the effectiveness of our Board and its committees and (ii) our Chief Executive Officer to ensure that our Board receives adequate and regular updates from the Chief Executive Officer on all issues important to the welfare and future of Baytex. Our Chairman of the Board is also responsible for the overall management of our Board.
Edward Chwyl was appointed Lead Independent Director of Baytex on January 11, 2011. The Lead Independent Director's primary role is to act as liaison between management and the independent directors to ensure the Board is organized properly, functions effectively and independently of management and meets its obligations and responsibilities, including those matters set forth in the mandate of the Board. In this regard, the Lead Independent Director acts as chair of meetings of the Board in the absence of the Chairman of the Board, acts as chair of the in camera sessions held during meetings of the Board, meets annually with each director to obtain insight as to where they believe the Board and its committees could be operating more effectively and ensures that reasonable procedures are in place for directors to engage outside advisors at Baytex's expense in appropriate circumstances. The Lead Independent Director also assists with the director assessment process by meeting with the Chairman of the Board to review the survey results relating to the Chairman of the Board and, if requested by the Nominating and Governance Committee, meeting with each director to obtain insight as to where they believe the Board and its Committees could be operating more effectively.
Individual directors are appointed by the Board to sit on certain designated committees. Our Board currently has four committees: the Audit Committee, the Compensation Committee, the Nominating and Governance Committee and the Reserves Committee. The members of each Board committee are comprised solely of independent directors. No separate committees have been established to deal with health, safety and environmental matters as the Board has retained overall responsibility for them.
Each committee has a written mandate outlining its purpose, membership and responsibilities. Listed below is a brief description of the responsibilities of each committee.
The members of the Audit Committee are Naveen Dargan (Chairman), Trudy M. Curran, Gregory K. Melchin and Mary Ellen Peters. The committee's responsibilities include:
The members of the Compensation Committee are Edward Chwyl (Chairman), Naveen Dargan and Mary Ellen Peters. The committee's responsibilities include:
The members of the Nominating and Governance Committee are John A. Brussa (Chairman), Edward Chwyl, Trudy M. Curran and R.E.T. (Rusty) Goepel. The committee's responsibilities include:
The members of the Reserves Committee are Dale O. Shwed (Chairman), Edward Chwyl and John A. Brussa. The committee's responsibilities include:
The Code of Business Conduct and Ethics is a statement of the principles to which Baytex is committed and is designed to direct all employees, consultants, officers and directors in the practice of ethical business conduct. The code is a guide to the standards of behavior that we require in all of our business activities. Individuals subject to the code are required to confirm annually that they have read, understood and complied with the code.
The Disclosure, Trading and Confidentiality Policy establishes procedures to permit the appropriate disclosure of information to the public in an informative, timely and broadly disseminated manner, ensures that non-public information remains confidential and ensures that trading of Baytex securities by directors, officers and employees is conducted in compliance with applicable securities laws.
Baytex is committed to maintaining the highest standards of honesty and accountability in its business activities. Our employees, officers and directors are likely to be the first to know when someone inside the company or connected with the company is acting improperly or illegally. Baytex maintains a procedure for the reporting of ethical violations which encourages all Baytex employees to report any misconduct. The procedure ensures that Baytex employees may report misconduct without the threat or fear of dismissal, harassment or other retaliation.