Responsibilities
Talisman’s Board of Directors sees its principal role as stewardship of the Company and its fundamental objective as the creation of shareholder value, including the protection and enhancement of the value of the Company’s assets. The Board oversees the conduct of the business and management, which, in turn, is responsible for developing long-term strategy and conducting the Company’s day-to-day business.
The Board ensures systems are in place to manage the risks and, through the Chief Executive Officer, sets the attitude and disposition of the Company toward environmental, health and safety policies, regulatory compliance and financial practices and reporting.
Independence
At December 31, 2007, Talisman had 10 directors. With the exception of the President and Chief Executive Officer, all directors are independent. Talisman has structures in place to ensure that the Board can function independently of management. All committees of Talisman’s Board are composed entirely of independent directors, with the exception of the Executive Committee, the majority of whose members are independent.
The roles of the Chairman of the Board and the Chief Executive Officer have been split since 1993 and the Chairman of the Board is an independent director. The terms of reference for the Board, each Board Committee, the Chief Executive Officer and the Chairman of the Board have been in place since 1995 and are regularly reviewed and updated to reflect new legislation, refinements in roles and responsibilities and best practices.
Effectiveness
The ability of any board of directors to carry out its mandate and statutory obligations is contingent on maintaining an effective board and on recruiting and retaining effective directors. To ensure continuing effectiveness, assessments of Talisman’s Board, its Committees and individual directors are conducted on an annual basis.
The Board’s ongoing succession and recruitment processes are also designed to ensure the continuing effectiveness of the Board and its Committees. To assist in the director selection process, the Governance and Nominating Committee has created a profile of ideal characteristics and qualifications of new nominees, which takes into account the Company’s governance framework and current Board composition. The Company maintains an evergreen list of potential Board members.
Stock Exchange and Regulatory Compliance
Talisman’s corporate governance practices satisfy all the existing guidelines for effective corporate governance established by National Instrument 58-101 and National Policy 58-201, all of the NYSE corporate governance listing standards applicable to non-US companies and substantially all of the NYSE corporate governance listing standards applicable to US companies.
A comprehensive report of Talisman’s governance practices, including differences between the TSX and NYSE requirements and the material ways in which the Company’s NYSE corporate governance practices differ from those applicable to US companies, is available in Talisman’s Management Proxy Circular, which can be obtained from the Company or viewed on the Company’s website at www.talisman-energy.com.
2007 Governance Achievements
During 2007, the major governance achievements of the Board included:
- successful recruitment for President and Chief Executive Officer, resulting the appointment of John A. Manzoni effective September 1, 2007;
- approval of a majority voting policy for Directors in February 2007;
- directors and executive officers met share ownership guidelines. Talisman’s Director share ownership guidelines are recognized as a best practice by the Canadian Coalition for Good Governance; and
- completion of a detailed analysis of Board composition with a view to succession planning and effective decision-making, resulting in a new independent director being appointed to the Board.
