Harvest Operations Corp. believes in maintaining good corporate governance practices and understands that our reputation for honesty and integrity is critical to the success of our business. To that end, we require that our board of directors, officers and employees exhibit the highest standards of professional and ethical conduct.
Harvest complies with corporate governance guidelines established by the Canadian Securities Administrators under National Instrument 58-101, details of which are included in our 2011 Annual Information Form filed on SEDAR, EDGAR and posted on the Harvest website. It should be noted that Harvest does not have an internal auditor. Aside from this difference, Harvest’s current corporate governance practices do not materially differ from those outlined by the Securities & Exchange Commission (“SEC”) or the New York Stock Exchange (“NYSE”).
Although we currently fully comply with the existing corporate governance guidelines for Canadian issuers, we remain committed to further enhancing our corporate governance practices as needed. This includes ensuring that the responsibilities outlined in the mandates for the Board and its committees will meet or exceed changes to corporate governance guidelines which may occur in the future. Harvest has a whistleblower policy which allows members of the organization to anonymously report known violations of the code of ethics.
Every employee at Harvest must read and sign our Corporate Code of Business Conduct and Ethics. This Code is a statement of principles to which Harvest is committed and which is designed to direct all employees, officers and directors of Harvest in determining ethical business conduct. It also reflects our commitment to a culture of honesty, integrity and accountability and outlines the basic principles and policies with which all employees are expected to comply.
The Board of Directors of Harvest has taken overall responsibility for the stewardship of the corporate planning process, risk management policies and programs, management development and succession planning, significant business development (including large acquisitions and major financing proposals such as the issuance of securities or debt structuring), and the integrity of internal control and information systems.
Four specific Board committees have been established to ensure maximum efficiency and effectiveness: the Audit Committee, the Corporate Governance and Compensation Committee, the Upstream Reserves, Safety and Environment Committee, and the Downstream Operations, Safety and Environment Committee. Each committee includes directors who possess the relevant skills and knowledge needed to execute the committee’s mandate.
The Audit Committee is a committee of the board of directors ("the Board") of Harvest Operations Corp. ("HOC") to which the Board has delegated its responsibility for oversight of the nature and scope of the annual audit, management’s reporting on internal accounting standards and practices, financial information and accounting systems and procedures, financial reporting and recommending, for approval of the Board, the audited year-end financial statements, interim financial statements and other mandatory disclosure releases containing financial information. Each member is "financially literate" as defined under Multilateral Instrument 52-110 for Canadian reporting guidelines.
The primary objectives of the Committee are as follows:
- Assisting directors to meet their responsibilities (especially for accountability) in respect of the preparation and disclosure of the financial statements of Harvest and other financial information;
- Providing better communication between directors and external auditors;
- Enhancing the external auditor’s independence;
- Increasing the credibility and objectivity of financial reports; and
- Strengthening the role of the outside directors by facilitating in depth discussions between directors on the Committee, management and external auditors.
Compensation / Corporate Governance Committee
Harvest recognizes the importance of sound corporate governance and our corporate structure and governance principles have been designed to ensure that stakeholders interests are addressed while maintaining structural simplicity, transparency, and aligned interests. We are committed to conducting all of our affairs based on a foundation of trust, integrity and ethical behavior. As stewards of the Trust, the Board of Directors and senior executive team are capable and empowered to ensure that the interests of all stakeholders are appropriately balanced with the strategies and principles of the Trust. The purpose of the Compensation / Corporate Governance committee includes:
- Proposing new board nominees and assessing directors;
- Implementing a process for assessing the effectiveness of the Board of Directors, its committees and individual directors;
- Providing orientation and education programs for new directors; and
- Reviewing the size, skill set and number of Board of Directors to ensure optimal Board effectiveness.
- Reviewing the compensation philosophy and remuneration policy for employees of Harvest and recommending changes to the Board to improve Harvest's ability to recruit, retain and motivate employees;
- Reviewing and recommending to the Board the retainer and fees to be paid to members of the Board;
- Reviewing and recommending to the Board performance objectives and the compensation package for the President;
- Recommending to the Board, with assistance from the President, the compensation and benefits package for other senior management positions;
- Determining and recommending, for approval of the Board, bonuses to be paid to officers and employees of Harvest and to establish targets or criteria for the payment of such bonuses, if appropriate; and
- Preparing and submitting a report of the Committee for inclusion in annual disclosure required by applicable securities laws to be made by Harvest including the Compensation Committee Report required to be included in the information circular – proxy statement of Harvest.
Upstream Reserves, Safety & Environment Committee
The purpose of this Committee includes:
- Reviewing annual independent engineering evaluation reports on our oil and natural gas reserves;
- Periodically reviewing the qualifications, experience and independence of the consulting engineering firms reporting on our oil and natural gas reserves;
- Meeting with the independent reserve evaluators employed or otherwise retained by the Trust who prepare such reports.
- Assisting directors in meeting their responsibilities (especially for accountability) in respect of Harvest's legal, industry and community obligations pertaining to the areas of health, safety and environment.
- Assisting directors in meeting their responsibilities in respect of the Corporation's obligation to establish appropriate environment, health and safety policies and procedures and maintaining management systems to implement such policies and monitor compliance.
Downstream Operations, Safety & Environment Committee
The purpose of this Committee includes:
- Reviewing and reporting to the Board on Harvest’s downstream business compliance with regards to all applicable laws, regulations and internal policies;
- Reviewing and reporting to the Board on emerging trends, issues and regulations related to downstream matters that are relevant to Harvest;
- Reviewing and reporting to the Board on the findings of any significant report by regulatory agencies, external health, safety and environment consultants or auditors concerning Harvest's performance with respect to downstream matters and advising on any necessary corrective measures needed to address issues and risks.
Hong Geun Im, Chairman(4)
Mr. Hong Geun Im is Senior Executive Vice President of KNOC. He was a member of the Harvest Board in 2010 and is familiar with Harvest's operations. Mr. Im has been with KNOC since 1982 and has held various positions overseeing the exploration and development of oil and gas assets in both Korea and foreign countries
Leslie G. Hogan
Mr. Jeong is became a Board Member of Harvest in January 2012. He is currently Executive Vice President of the America Group at KNOC. Mr. Jeong has 26 years of experience at KNOC and has worked in the Vietnam Office, Asia & Europe Production Department adn the Overseas E&P Department as a General Manager & Managing Director. He earned a Bachelor's degree in Petroleum Engineering and Master's degree in Petroleum Engineering, both from Seoul National Univeristy.
Mr. Kang is a corporate financial specialist and currently the Chief Financial Officer at Harvest. Prior thereto, he was the Vice President of KNOC's Finance Management Department. Prior to this, he held the position of Finance Team Senior Manager at KNOC . Mr. Kang has worked on financings for the merger and acquisition of PetroTech Peruana S.A., Peru, Harvest Operations Corp., and Sumble JSC, Kazakhstan. He holds a Bachelor's degree in accounting from Pusan National University graduated and an MBA from Sogang Business School, Sogang University, Korea.
Mr. Sohn is the Vice President, Finance Management Department at KNOC. He holds a Business Management degree from the Busan National University in South Korea. Prior to this, he was the Chief Financial Officer of Harvest and Mr. Sohn served as a Vice President of KNOC's Finance Management department in 2009, and in the Offshore Rig Operations department from May, 2006 to December, 2008. Mr. Sohn has also held positions as an Administration Manager with the Ulsan Gas Terminal, a Financing Manager and Information Manager in the Petroleum Information department and a Marketing Manager in the Offshore Rig Operations department. Prior to these roles, he held a senior position in the Procurement department of Hyundai Heavy Indutry Co., Ltd for four years.
Mr. Yi became President and CEO of Harvest Operations in January 2012 and joined Harvest's Board of Directors in November, 2010. Prior to joining Harvest, he was the Executive Vice President for the Americas Group, as well as President of ANKOR E&P Holdings Corporation in the USA. Mr. Yi has 23 years of experience at KNOC and has worked in Domestic Continental Shelf Development, the Overseas E&P Department, and the Ulsan Branch of the Petroleum Stockpile Department. He earned a bachelor's degree in Petroleum Engineering at Seoul National University and Master's degree of Petroleum Engineering in Hanyang University.
Committees of the Board of Directors:
|Name of Director||Audit Committee||Upstream Reserves, Safety & Environment Committee||Downstream Operations, Safety & Environment Committee||Compensation & Corporate Governance Committee|