Governance

West Fraser’s Board of Directors has overall responsibility for the stewardship of the Company and the identification of the principal risks of the Company’s business. This includes environment and climate change-related risks, vulnerabilities and to ensure the implementation of appropriate systems to manage these risks, and responsibility for:

The adoption of a strategic planning process and approval of a strategic plan,
The identification of the principal risks of the Company’s business and ensuring the implementation of appropriate systems to manage these risks,
The succession planning, including appointing and monitoring senior management,
The implementation of a communication policy for the Company regarding disclosure of corporate information, and
The integrity of the Company’s internal control and management information systems including accounting systems.

Our Board also has the responsibility to identify, with the advice of management, the principal risks of West Fraser’s business and must, with management, establish systems and procedures to ensure that these risks are monitored. The Board reviews and monitors environmental performance and considers climate-related issues in corporate-level strategies and capital investment decisions. These systems and procedures include the effective management of the Company’s assets and financial resources and compliance with all regulatory obligations. Within our overall strategic planning, climate-related concerns are identified and addressed based on the potential impact on our business.

The Board’s Environment, Health and Safety Committee holds accountability to review and report to the Board, at least annually, on the appropriateness of the policies, procedures and practices in place to administer the Company’s environmental programs and to identify and manage environmental risks (including water, waste, biodiversity, species at risk, emissions and climate change) in the context of legal, competitive and operational considerations. Further, this committee is responsible for proposed environmental legislation or regulations and on emerging physical and market-related environmental risks (including those associated with climate change), that may have an impact on the Company’s business and activities.

Learn more about our governance approach (GRI 102), the mandate of our Board of Directors, and the Charter of the Board’s Environment, Health and Safety Committee.

102-18 Governance structure

See the Corporate Governance Policy section on our website and in our 2019 Annual Report, page 25.

102-19 Delegating authority

See the Corporate Governance Policy section on our website.

102-20 Executive-level responsibility for economic, environmental, and social topics

West Fraser’s executive team has responsibility for one or more sustainability areas, including environmental responsibility at manufacturing sites, safety, employee development, forest management activities, governance, financial performance and stakeholder engagement.

The Health, Safety & Environment Committee is ultimately responsible for monitoring our safety and environmental performance.

Reflecting the recommendations of the Task Force for Climate-Financial Disclosure (TCFD), West Fraser provides information about our strategic approach, risks, opportunities and performance related to governance and accountability for climate change here.

102-21 Consulting stakeholders on economic, environmental, and social topics

We embed stakeholder engagement and consultation in our activities; indeed, it is a crucial part of our success as a business. Communities, customers, government bodies and non-governmental organizations regularly provide feedback through informal and formal channels. Beyond our voluntary activities, Canadian law requires the identification of and consultation with stakeholders. We are independently audited to meet the standards and provincial regulations governing the permitting and approval of harvesting and forest management planning on Canadian public lands by bodies such as the Forest Practices Board.

Our leadership team is frequently engaged in consultation activities and are responsible for the operational management of sustainability within their purview. Consultation topics related to forestry activities frequently include responsible management of timber, soils, wildlife, water and fish resources, recreational access, scenic views, the preservation of biodiversity and the protection of cultural values. Other topics also include responding to forest health issues, carbon policy, achieving the fullest possible economic utilization of the forest resources and employment in local communities.

Public consultation activities are carried out within our forest management planning in Canada and through operations’ community engagement activities. Consultation is required by legislation and within our forest management and fibre sourcing certifications, which are independently audited. Our manufacturing facilities are regularly inspected by federal, provincial and state environmental regulators.

Shareholders may communicate directly with our Board and Directors as outlined in our 2020 Information Circular page 43.

102-22 Composition of the highest governance body and its committees

See Corporate Governance Policy section on our website, also outlined in our 2020 Information Circular page 36.

102-23 Chair of the highest governance body

Chairman of the Board: Hank Ketcham, 2020 Information Circular page 37.

102-24 Nominating and selecting the highest governance body

2020 Information Circular, see Board Renewal pages 22-23, Governance & Nominating Committee page 38, gender diversity pages 44-47. Access the Board Diversity Policy.

102-25 Conflicts of interest

West Fraser website: Code of Conduct, and 2020 Information Circular Serving on Other Boards page 47.

102-26 Role of highest governance body in setting purpose, values, and strategy

West Fraser website: Mandate of the Board of Directors and 2020 Information Circular Mandate of the Board page 41.

102-27 Collective knowledge of highest governance body

2020 Information Circular Orientation Program and Continuing Education pages 50-51.

102-28 Evaluating the highest governance body’s performance

2020 Information Circular Expectations of Management page 43 and Performance Reviews page 51.

102-29 Identifying and managing economic, environmental, and social impacts

The Board of Directors has overall responsibility for the stewardship of the Company, including responsibility for

adoption of a strategic planning process and approval of a strategic plan,
identification of the principal risks of the Company’s business and ensuring the implementation of appropriate systems to manage these risks,
succession planning, including appointing and monitoring senior management,
implementation of a communication policy for the Company regarding disclosure of corporate information, and
the integrity of the Company’s internal control and management information systems including accounting systems.

The Board's Health, Safety & Environment Committee is responsible for monitoring our safety and environmental performance. The Committee conducts an ongoing review of our safety and environment-related policies and performance, including compliance with applicable laws and regulations in the United States and Canada.

102-30 Effectiveness of risk management processes

The Board has the responsibility to identify, with the advice of management, the principal risks of the Company’s business and must, with management, establish systems and procedures to ensure that these risks are monitored. These systems and procedures must include the effective management of the Company’s assets and financial resources, and must ensure compliance with all regulatory obligations.

The Audit Committee assists the Board in fulfilling its responsibility to oversee the Company’s financial reporting and audit processes, its system of internal controls and its process for monitoring compliance with applicable financial reporting and disclosure laws and its own policies.

The Board's Health, Safety & Environment Committee is responsible for reviewing the suitability and effectiveness of safety and environment management systems and sustainability certification programs to which we subscribe.

102-31 Review of economic, environmental, and social topics

Our Board has overall responsibility for sustainability issues and for ensuring all aspects of sustainability are addressed on an ongoing basis. The senior management of the Company develops long-term strategies with respect to the Company’s operations to be considered and, if deemed appropriate, adopted by the Board of Directors. The strategies are reviewed and updated as required.

Included in the development of these long-term strategies will be annual strategic, operating and capital plans. The strategic plan is to take into account, among other things, the opportunities and risks of the Company’s business.

Our Board and senior executive team meet regularly during the year, with the assistance of the Audit Committee and Health, Safety & Environment Committee, reviews financial, governance and sustainability impacts, risks and opportunities to West Fraser.

102-32 Highest governance body’s role in sustainability reporting

The Board's Health, Safety & Environment Committee is responsible for monitoring the Company’s environmental performance and environmental systems. Our executive management team reviews and approves information reported in annual public sustainability reporting.

102-33 Communicating critical concerns

West Fraser’s Code of Conduct sections 15. Compliance & Reporting and section 16. Whistleblower Protection.

102-35 Remuneration policies

2020 Information Circular Executive Compensation, pages 63-65.

102-36 Process for determining remuneration

2020 Information Circular Advisory Resolution on the Company’s Approach to Executive Compensation (Say On Pay), page 29, Executive Compensation, pages 63-65.

102-37 Stakeholders’ involvement in remuneration

2020 Information Circular Advisory Resolution on the Company’s Approach to Executive Compensation (Say On Pay), page 29.

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Governance