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NOVA Chemicals has had a broad-reaching plan for corporate governance
since 1991, and we continually improve it to deal with the growth
and change of our company and the global business environment.
NOVA Chemicals is subject to a variety of corporate governance guidelines
and requirements mandated by the securities administrators in Canada
and the United States and the New York Stock Exchange. NOVA Chemicals
complies with all material corporate governance disclosure rules
and guidelines of the Canadian securities administrators. The company
also complies with the New York Stock Exchange rules applicable
to it as a foreign private issuer, as well as with applicable corporate
governance rules of the U.S. Securities and Exchange Commission.
The Board of Directors is responsible for the overall stewardship
of NOVA Chemicals, including overseeing the development of both
our strategic direction and policy framework. The Board is also
responsible for the corporate governance of NOVA Chemicals and primarily
discharges its responsibilities through its four committees. NOVA
Chemicals’ Executive Leadership Team works under the supervision
of the Board to ensure corporate governance issues are appropriately
addressed.
The Board of Directors and the committees of the Board meet on a
regularly scheduled basis. The directors are informed of NOVA Chemicals'
operations via meetings, as well as through reports prepared by
and discussed with management. Communications between the directors
and management also occur apart from regularly scheduled Board and
committee meetings. Non-management directors meet at regularly scheduled
executive sessions without management present. The Board designates
at least one meeting per year as a substantial strategic planning
session, which takes into account, among other things, the opportunities
and risks of the business. In 2005, the NOVA Chemicals Board of
Directors held eight meetings.
All directors, officers and employees of NOVA Chemicals must act
in accordance with NOVA Chemicals’ Business Conduct Policy, a comprehensive
set of expectations, obligations and responsibilities relating to
ethical conduct, conflicts of interest and compliance with law.
In addition, NOVA Chemicals has adopted a Code of Ethics for its
Chief Executive Officer and senior financial officers, which establishes
additional expectations, obligations and responsibilities for such
officers. The Business Conduct Policy and the Code of Ethics can
be accessed on NOVA Chemicals’ website at www.novachemicals.com.
The four committees of the Board have delegated responsibilities
for select NOVA Chemicals’ corporate governance responsibilities.
These committees, described below, are the Audit, Finance and Risk
Committee, the Corporate Governance Committee, the Human Resources
Committee and the Public Policy and Responsible Care Committee.
The mandates for each committee are also available on NOVA Chemicals’
website.
AUDIT, FINANCE AND RISK COMMITTEE
This committee reviews and inquires into matters affecting the financial
reporting of NOVA Chemicals; the system of internal accounting and
financial controls and procedures; NOVA Chemicals’ financial audit
procedures and plans; recommends the approval of the issuance of
debt and equity securities; oversees the policies and practices
of NOVA Chemicals relating to corporate compliance and risk management
strategies; recommends to the Board the appointment and remuneration
of the external auditors and approves the mandate and appointment
of internal auditors; oversees the funding, administration and investment
of the trust funds associated with NOVA Chemicals’ savings and profit
sharing plans and pension plans; and reviews with management and
reports to the Board, annually, on the financing plans and objectives
of NOVA Chemicals.
In consultation with management, the Board has identified the principal
risks facing NOVA Chemicals and has established committees to monitor
systems put in place to address these risks. The Audit, Finance
and Risk Committee has primary responsibility to monitor the risk
management systems and reviews them regularly with the internal
and external auditors.
Members of the committee are: Messrs. Hawkins (Chairman), Bougie,
Dineen, and Ludwick and Mrs. Rennie. In 2005, the Audit, Finance
and Risk Committee held eight meetings.
CORPORATE GOVERNANCE COMMITTEE
This committee is responsible for the composition, compensation
and governance of the Board of Directors of NOVA Chemicals and recommends
nominees for election or appointment as directors. The committee
is also responsible for maintaining an effective working relationship
between the Board of Directors and NOVA Chemicals’ management.
Members of the committee are: Messrs. Newall (Chairman), Blumberg,
Dineen, Fortier and Stanford. In 2005, the Corporate Governance
Committee held three meetings.
HUMAN RESOURCES COMMITTEE
This committee oversees policies and practices of NOVA Chemicals
with respect to human resources. It reviews recommendations for
senior executive appointments and considers the terms and conditions
of their employment, as well as succession planning and compensation.
It recommends awards under the Management Incentive Plan, the Equity
Appreciation Plan, the Option Plan, the Restricted Stock Unit Plan
and the Deferred Share Unit Plans. It is also responsible for the
proper and orderly administration of NOVA Chemicals’ savings, profit
sharing and pension plans, other than matters relating to the funding
and investment of the plans’ trust funds.
The Board is responsible for the appointment and succession of the
Chief Executive Officer, appointing senior management and monitoring
their performance. The Human Resources Committee annually reviews
and reports on organizational structure, recruitment, training and
succession planning matters. NOVA Chemicals uses management by objectives
to monitor the performance of the Chief Executive Officer and senior
management. Moreover, the elements of the Board-approved strategic
plan are embedded in the written objectives of the senior executives
and are reviewed annually by the Human Resources Committee and the
Board.
Members of the committee are: Mr. Stanford (Chairman), Drs. Boer
and Creighton, Messrs. Blumberg and Hawkins and Mrs. Rennie. In
2005, the Human Resources Committee held three meetings.
PUBLIC POLICY AND RESPONSIBLE CARE COMMITTEE
This committee is responsible for overseeing the policies and practices
relating to NOVA Chemicals’ Responsible Care management systems
and performance, including the environment, occupational health
and safety, communications, corporate contributions, public policy
matters and NOVA Chemicals’ relationship with all of its stakeholders.
Members of the committee are: Dr. Boer (Chairman) and Messrs. Bougie,
Fortier and Ludwick and Dr. Creighton. In 2005, the Public Policy
and Responsible Care Committee held four meetings.
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