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Values Matter
2016 Sustainability Report
Values Matter
2016 Sustainability Report
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2016

Proven Performance

Our Board of Directors is committed to demonstrating a high standard of corporate governance. We believe that strong governance promotes effective decision making at the board level, helping to ensure that all of Vermilion’s business dealings are fair and transparent and that we can be held accountable and responsible to our stakeholders.

Vermilion’s strong governance practices are widely and independently recognized by a number of well-respected entities:

The Canadian Coalition for Good Governance named Vermilion the recipient of the 2014 Governance Gavel Award for Best Disclosure of Governance Practices and Approach to Executive Compensation by a Small or Mid-Sized Issuer. This award recognizes Vermilion’s dedicated efforts in observing guidelines for high performing boards, developing and maintaining exceptional disclosure practices, and actively engaging all shareholders.
 
brendan wood
Institutional investors in the 2015 Brendan Wood International Shareholder Confidence Report ranked Vermilion a TopGun energy company for a fourth year in a row. Vermilion’s Board, CEO and CFO were all uniformly accredited with TopGun status – the highest level of confidence in the worldwide survey – ranking Vermilion’s strategy, leadership and governance.
 
The Globe & Mail’s 2015 Board Games ranked Vermilion’s corporate governance performance second within the energy sector and 20th overall out of 234 companies and income trusts in the S&P/SSX composite index. Having consistently placed in the top ranks of oil and gas companies, and Canadian companies overall, since 2006, this is a continued positive reflection of Vermilion’s performance in the areas of board composition, executive compensation, shareholder rights and disclosure.
 

Vermilion’s consistently strong results in the area of disclosure and governance practices are a strong indicator that we have a framework of policies and practices in place to ensure accountability, fairness and transparency to our stakeholders.

We continue to monitor corporate governance regulations and legal requirements, while also maintaining a watch on trends in governance disclosure and structure, along with benchmarks that compare our performance to that of our peers. We use this information to implement practices and policies that ensure Vermilion remains best in class in the area of governance. In 2014, for example, we introduced an annual ‘Say on Pay’ Advisory Vote. G4-53

The ‘Say on Pay’ Advisory Vote reflects our belief that Shareholders should have the opportunity to understand the objectives, philosophy and principles the Board has used in its approach to executive compensation decisions, and have an opportunity to have a non-binding advisory vote on Vermilion’s approach. We continue to hold annual ‘Say on Pay’ advisory votes at our annual general meetings; in 2016, the vote received 96% support from Shareholders.  G4-53

Vermilion has been following an anti-hedging policy on an informal basis for some time, but formally adopted the policy in February 2014. The anti-hedging policy prohibits directors and officers from hedging Vermilion shares, and ensures alignment through long-term holdings. In March 2016, the Board amended this policy to provide that all directors and officers are prohibited from engaging in any arrangement that is designed to hedge or offset a decrease in the market value of shares. The amended policy is a robust anti-hedging policy aligned with best governance practices.

The clawback policy was also adopted in February 2014, and demonstrates that our Board will act on behalf of Shareholders to hold management accountable for their actions. The clawback policy requires repayment where the executive(s) and officer(s) engaged in intentional misconduct that causes financial restatement. G4-51

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Vermilion Energy