The Board of Directors (the “Board”) and management of Enerflex Ltd. (“Enerflex” or the “Company”) recognize that good governance is critical for the effective operation of the Company. The Board is responsible for the supervision of management and the overall stewardship and governance of Enerflex. The Board is committed to implementing and maintaining effective practices in corporate governance and regularly monitors regulatory developments and governance best practices to ensure that Enerflex maintains its high governance standards. The Board directly, and through its various committees, complies with evolving Canadian corporate governance requirements, including those established under National Policy 58-201 – Corporate Governance Guidelines, National Policy 58-101 – Disclosure of Corporate Governance Practices, and National Instrument 52-110 – Audit Committees.
Standing committees of the Board are an integral part of Enerflex's governance structure. Three standing committees have been established with a view to allocating expertise and resources to particular areas and to enhance the quality of discussion at the Board meetings: the Nominating and Corporate Governance Committee ("NCG Committee"), the Human Resources and Compensation Committee ("HRC Committee"), and the Audit Committee. The committees facilitate the Board decision-making by providing recommendations to the Board on matters within their respective responsibilities.
The NCG Committee is responsible for reviewing and making recommendations as to all matters relating to effective corporate governance. The principal duties of the NCG Committee include: (i) assessing the effectiveness of the Board, its size and composition and its committees; (ii) evaluating director compensation; (iii) assessing the Board of Directors' relationship to management; (iv) assessing the individual performance and contributions of directors; and (v) reviewing regulatory changes and governance best practices and aligning the Company's governance policies and practices as appropriate. The NCG Committee reviews on an ongoing basis the composition of the Board and analyzes the competencies necessary for the Board. The NCG Committee is also responsible for Board and committee succession planning, the identification and recruitment of new directors, new director orientation, and the continuing education of current directors.
The principal responsibilities of the HRC Committee include: (i) reviewing and making recommendations as to the compensation of executive officers and other senior management; (ii) reviewing and making recommendations as to the Company's short and long-term incentive programs, pension and other benefit plans; and (iii) overseeing executive officer appointments, performance evaluations of the President and CEO, succession planning and executive development. The HRC Committee also oversees compliance with Enerflex's Business Code of Conduct and HSE program.
The principal duties of the Audit Committee include: (i) oversight responsibility for financial statements and related disclosures, reports to shareholders, continuous disclosure and other related communications; (ii) establishing appropriate financial policies; (iii) ensuring the integrity of accounting systems and internal controls; (iv) approving all audit and non-audit services provided by the independent auditor; (v) consulting with the auditor independent of management and overseeing the work of the independent auditor; (vi) monitoring and directing, as appropriate, the activities of the internal audit group; and (vii) overseeing the Company's cybersecurity and IT programs.