We are committed to strong corporate governance. The Board of Directors has a Corporate Governance Committee that works with our General Counsel to ensure that our governance practices are up to date and that they meet applicable standards. Sound governance structures and systems protect the interests of investors and other COIs, and ensure that the company is well managed.
The Audit, Corporate Governance and Nominating, and Compensation Committees are composed entirely of independent directors.
Our Board of Directors is responsible for the stewardship of our company and ensures that an appropriate corporate governance structure and system are in place. Our key governance practices are described in detail in our Management Proxy Circular, available on teck.com.
The Board delegates certain responsibilities to specific committees. The following Board committees, which meet at least quarterly, have responsibilities related to sustainability issues:
The Safety and Sustainability Committee assists the Board with its oversight responsibilities in connection with safety and sustainability, and reviews the policies, systems and resources that are in place to implement our safety and sustainability commitments.
The Corporate Governance and Nominating Committee considers and recommends corporate governance programs to the Board, proposes nominees for Board and committee appointments, and assists with Board, committee and director evaluations to ensure that our governance practices are rigorous, relevant and appropriate to Teck.
The Audit Committee assists the Board with its oversight of audit, accounting and risk management in relation to areas such as financial accounting, reporting and disclosure practices, and anti-fraud programs and controls.
The Compensation Committee of the Board is responsible for recommending compensation policies to the Board and for the annual review of director compensation. This committee reviews and approves the CEO's corporate goals and objectives, evaluates CEO performance in these areas and makes recommendations to the Board on CEO compensation. This committee also reviews and approves senior officer and director compensation, incentive compensation plans and equity-based plans.
We value diversity at Teck. The Corporate Governance and Nominating Committee believes that a Board with directors from diverse backgrounds and different experiences benefits the company by enabling the Board to consider issues from a variety of perspectives. When assessing potential candidates for nomination to the Board, the committee considers gender, ethnicity and national origin, in addition to business skills, qualifications and career history. In the final analysis, the committee values a broad spectrum of different approaches and understands that a diverse composition of directors can bring insight and good judgment to the issues facing a global mining enterprise. In 2014, we ranked fourth in terms of Board diversity among TSX 60 (the Toronto Stock Exchange index of 60 leading companies) constituent companies in a review published by the Canadian Board Diversity Council.
The committee considers the level of representation of women in identifying and nominating candidates for election or re-election to the Board. The Board has adopted a written policy in this regard, which includes a requirement that search consultants who are retained to assist with the identification of potential candidates to the Board be instructed to ensure that candidates reflecting the Board’s diversity criteria are brought forward for consideration. Having carefully considered the matter, the Board has elected not to adopt a target number or percentage of women directors, on the grounds that appropriate skills and experience must remain the overriding criteria for nomination to the Board. This also guards against any perception that directors may have been nominated solely or primarily on the basis of gender. In accordance with the Policy when nominees to the Board are considered, the Committee will annually review the process for ensuring that diversity criteria are considered. The Board will measure the effectiveness of the Policy over time by tracking Board diversity and reviewing candidate pools for diversity criteria. In 2014, Tracey McVicar and Laura Dottori-Attanasio were appointed as directors. Director Janice Rennie retired and director Jalynn Bennett passed away. As of the report publication date, 14.3% of the Board, or two out of 14 directors, are women.
It is the responsibility of the Corporate Governance and Nominating Committee to identify necessary competencies and skills for Board members. Corporate governance, corporate responsibility and sustainable development experience are part of the selection criteria. This committee conducts an annual assessment to identify skills deficits and to ensure that succession planning covers all necessary Board competencies.
Shareholder proposals, resolutions and other mechanisms allow shareholders to convey their opinions to the Board. As provided in the Canada Business Corporations Act, registered shareholders are entitled to receive notice of the Annual Meeting of Shareholders, and to vote on resolutions. In 2014, there were resolutions presented at the Annual Meeting of Shareholders regarding the election of directors, the appointment of the auditors, amendments to the company’s stock option plan and executive compensation. Detailed voting results are posted on SEDAR at www.sedar.com following the Annual Meeting of Shareholders.
Investors have the opportunity to provide feedback to our company via the investor relations group through:
Our Board engages directly with shareholders and governance groups with respect to governance matters. Employees can engage our CEO and senior management through our "Let's Talk" sessions. At these sessions, which are held periodically, employees are able to ask questions and receive answers on a wide range of topics, including social and environmental issues.
Incentive compensation of the CEO and senior officers is performance-based. Health, safety, environment and community (HSEC) performance, as well as financial performance and the accomplishment of company annual objectives, are taken into consideration in the annual review of bonus. For all executives, the bonus weighting for HSEC is about 15% to 20% of their overall bonus. In addition, the personal component of executive bonus ratings may include specific objectives related to HSEC. Executive remuneration is fully disclosed in our 2015 Management Proxy Circular.
The following corporate management committees are responsible for managing sustainability issues:
Our Senior Vice President of Sustainability and External Affairs reports directly to our CEO and is responsible for sustainability, health and safety, environment, community, and Indigenous affairs, among other areas. Her direct reports include the:
Our Vice President, Human Resources, who reports directly to the CEO, is responsible for our human resources management, which includes sustainability goals related to employee attraction, training and development.
Our Vice President, Risk and Security, who reports directly to the Senior Vice President, Commercial and Legal Affairs, is the Chair of our Materials Stewardship Committee and oversees our materials stewardship strategy.
Our Senior Vice President, Commercial and Legal Affairs, oversees our work in managing Human Rights.
General Managers at each of our operations are accountable for operation-specific HSEC management systems, for conformance with and certification under the International Organization for Standardization ISO 14001 standard where applicable, and for continual progress towards annual HSEC targets and our sustainability goals. Each General Manager reports to either a Vice President or the Senior Vice President of their respective business unit.
We conduct our business in an honest and ethical manner. We expect our employees to deal with everyone in a fair and open manner and to conform with the spirit and intent, as well as the technical requirements, of all contracts that we enter into as well as with all laws, regulations and rules that govern us.
Doing What’s Right is our program designed to maintain an ethical workplace. To assist employees in this regard, we have a Code of Ethics available in English, Spanish, Mandarin and Turkish. This code specifies the types of behaviours required on the job that will assure our business is conducted with honesty, integrity and respect. Our Doing What’s Right program is supported by additional ethics-related policies and procedures, including:
All non-union, non-hourly employees are required annually to certify compliance with our Code of Ethics and to advise the General Counsel of any potential infractions. Biannually, these employees undergo a web-based compliance and ethics training program to refresh and enhance awareness of the Code of Ethics, including issues such as insider trading, conflicts of interest and harassment.
We engage in and support the work being done to fight corruption by supporting international frameworks such as the United Nations Global Compact (UNGC) and the Extractive Industries Transparency Initiative (EITI). We participate in the EITI through our ICMM membership and more information can be found on our website. Our Code of Ethics requires that we conduct global business in a moral and ethical manner, and that employees comply with all applicable laws. Under our anti-corruption compliance policy, available in English and Spanish (with additional overviews available in Mandarin and Turkish), payments, charitable donations, travel expenses, gifts and entertainment may not be made to government officials to assist us in obtaining or retaining business, nor can employees provide payments, gifts or entertainment that are prohibited by the applicable country or local laws.
The following high-risk factors are considered as part of our anti-corruption compliance program, along with a number of other medium and low risk activities:
All charitable donations, sponsorships and community investments must comply with Teck’s Anti-Corruption Policy and follow Teck’s charitable donations and community investment guidelines, which prohibit donations that would improperly benefit a government official. Compliance with the Anti-Corruption Policy is subject to periodic review by internal audit. Our Indigenous Participation Funding Guidelines provide guidance on payments made to Indigenous Peoples for participating in Teck-related activities. It is not illegal for a company to provide these types of payments to Indigenous Peoples so long as (i) the provision of the payments is not made corruptly to assist the Company in obtaining or retaining business, and (ii) the provision of the payments is not prohibited by the applicable country or local laws.
We provide anti-corruption training to employees who may be exposed to corruption risks due to the nature of their work. For example, employees who work with government officials or who could potentially have contact with government officials are required to complete an anti-corruption training program.
Employee anti-corruption training is conducted at least every two years. Third-party service providers, agents and consultants who represent Teck to government officials are asked to complete our Third-Party Anti-Corruption questionnaire and, in some instances, to complete our training.
Annually, our internal audit department evaluates the effectiveness of our internal control systems over financial reporting. This includes a consideration of the company’s vulnerability to fraud and corruption, as well as an evaluation of the design and effectiveness of those internal controls designed to prevent and/or detect fraudulent activities at a significant level. In 2014, internal control testing was performed at key locations across all business units, representing approximately 95% of the company’s 2014 consolidated assets.
Our employees are required to report any violations, or potential violations, of our Code of Ethics. Our Doing What’s Right program includes a whistle-blower hotline and web portal, which are managed by a third party. These provide a confidential and secure means for our employees to report concerns about conduct that may be contrary to our values and integrity standards. The hotline and portal are available 24 hours a day, seven days a week, in all jurisdictions in which we have employees. We do not tolerate any form of retaliation against employees raising concerns in good faith. All allegations of harassment or intimidation by others as a result of contacting the hotline/web portal are investigated and, if required, appropriate disciplinary action is taken, which can include dismissal.
We received 20 reports of alleged violations to our Code of Ethics in 2014. The majority of these (40%) related to employee relations issues, followed by a range of other matters, including allegations of theft of time, conflicts of interest, and wage/hour issues. By the end of 2014, all 20 reports were closed following investigation, of which 11 resulted in management action, such as discipline or amendments to practices or policies. No criminal cases regarding bribery were brought against Teck Resources or any of its affiliates.
Our Code of Ethics contains provisions regarding conflicts of interests for employees. Under the Canada Business Corporations Act, directors are required to disclose a material interest in any transaction or opportunity that the company is considering. To ensure the exercise of independent judgment, directors who have disclosed such an interest are prohibited from participating in the Board discussion or voting on the transaction.
In 2014, we engaged directly and indirectly (through industry groups) with governments in several public policy initiatives related to our business. This included efforts to:
We report on our advocacy efforts in an open and transparent manner, conforming to all lobbying laws, including publicly reporting activities via lobbyist registries in jurisdictions where we operate.
From time to time, we make political contributions in the Canadian provinces in which we operate. In 2014, our contributions totalled approximately $270,650. All contributions are made in accordance with applicable laws. We do not make political contributions outside of Canada.