Corporate Governance Committee
Nominating and Corporate Governance Committee Terms of Reference
The board of directors (the “Board”) of Enerflex Ltd. (the “Corporation”) has established a Nominating and Corporate Governance Committee of the Board (the “Committee”), which shall consist of at least three independent directors. Members of the Committee shall be considered independent if they meet the test of independence contained in applicable securities legislation and the rules of any stock exchange on which securities of the Corporation are listed.
The principal responsibilities of the Committee are reviewing and making recommendations as to all matters relating to effective corporate governance in order to assist the Board in carrying out its responsibilities. The Committee is responsible for assessing effectiveness of the Board, its size and composition, its committees, the Board's relationship to management and the individual performance and contribution of its directors. The Committee recommends the nominees for election to the Board at the annual meeting of shareholders. The Committee also identifies and recruits new directors and provides new director orientation.
The mandate of the Committee is as follows:
- monitor the Corporation's corporate governance practices and propose such procedures and policies as the Committee believes are appropriate to ensure the Board functions independently of management, that management is accountable to the Board and that procedures are in place to monitor the effectiveness of the existing directors, and consider, recommend and bring forward to the Board any corporate governance issues for review, discussion or action by the Board or a committee thereof;
- periodically consider the effectiveness of the Board, as a whole, the committees of the Board and the contributions of individual directors;
- review and consider the appropriate size of the Board and its composition between independent and non-independent directors;
- review the competencies, skills and diversity (including but not limited to business experience, geography, age, gender and ethnicity) that are necessary for the Board, as a whole, to possess and compare that to the existing skills, competencies and diversity on the Board;
- recommend the appropriate balance of expertise among Board members, seek out qualified, diverse candidates to fill Board positions, and aid in attracting qualified candidates to the Board;
- recommend to the Board the nominees to fill vacancies on the Board or to be proposed by the Board as candidates for election as directors at the annual meeting of the shareholders;
- receive and consider recommendations for new Board candidates from individual directors or from the Board at large;
- interview and assess the qualifications (including competencies and skills) of prospective Board candidates, on a merit based system having regard to the benefits of diversity and the needs of the Board, and report and make a recommendation to the Board as to the suitability of each candidate;
- review and approve officers' directorships in companies other than subsidiary companies and to review directors' relationships with other outside entities with regard to potential conflicts of interest and interlocking board positions;
- review and make a recommendation to the Board as to the acceptance of any offer to resign submitted by a director in accordance with the Majority Voting Policy;
- consider and recommend directors' compensation, including any incentive award grants, to the Board;
- review the mandate of the Board and the terms of reference of each committee of the Board (being this Committee, the Audit Committee and the Human Resources and Compensation Committee) and the position descriptions of the Chairs of each committee of the Board and recommend to the Board any changes to the same it believes are appropriate and to recommend to the Board any additional committees as appropriate;
- review the relationship between management and the Board and make recommendations with respect to such relationship when and where it is deemed appropriate;
- ensure that any issues relating to governance that are identified by directors are raised with management;
- recommend to the Board such codes of conduct and other policies as are appropriate to deal with the confidentiality of the Corporation's information, insider trading and the Corporation's timely disclosure and other public company obligations;
- in conjunction with the Human Resources and Compensation Committee, review the policy on share ownership and monitor compliance with such policy with respect to directors, officers and employees of the Corporation;
- review legislative and corporate governance practice updates and recommend to the Board such steps as the Committee decides are appropriate to align the Corporation's governance practice with proper corporate governance practices, with reference to National Policy 58- 201 Corporate Governance Guidelines and other authoritative guidelines on corporate governance;
- review the directors and officers insurance policy and recommend appropriate coverage levels;
- review and present to the Board for approval the material for corporate governance reporting in the annual Management Information Circular; and
- oversee the training and orientation of new directors and the continuing education of current directors.
It is acknowledged that there may be, from time to time, the need for the Committee to retain the services of outside advisors and/or consultants to assist it in completion of its responsibilities. The Committee, with the final approval of the Chairman of the Committee, is authorized to negotiate the terms, including fees, associated with any such engagement at the expense of the Corporation and to authorize the payment of such fees.
The Committee shall review these terms of reference at least annually or, where circumstances warrant, at such shorter intervals as is necessary, to determine if further additions, deletions or other amendments are required.