Aaron's Test Page

The board’s primary responsibilities are to foster TC Energy’s long-term success, oversee our business and affairs and management, and to act honestly, in good faith and in the best interests of TC Energy. The board’s main objective is to promote our best interests, to maximize long-term shareholder value and to enhance shareholder returns.

The board has key duties and responsibilities, delegates some duties to its four standing committees and discharges others to management for the day-to-day affairs of the business.

Board renewal

The Governance committee regularly assesses the skill set of each director, and reviews it against the director retirement schedule, their ages and the composition of each committee. The review also takes into account the desirability of maintaining a reasonable diversity of backgrounds, and character and behavioural qualities such as integrity.

The Governance committee, with input from the Chair of the Board and the CEO, is responsible for identifying suitable director candidates, and canvasses the entire Board for potential nominees. The committee also uses a third-party recruitment specialist to identify potential director candidates. The committee is responsible for assessing the individuals and proposing the strongest candidates for nomination. An evolving roster of suitable director candidates is maintained by the committee.

The committee looks for a mix of skills and experience required for overseeing our business and affairs. The Board considers personal characteristics such as gender, ethnic background and geographic residence when looking at diversity. While candidates are nominated as directors based on their background and ability to contribute to the Board and committee meetings, the Board also specifically considers gender diversity.

Candidates who are being nominated for the first time must have experience in industries similar to ours, or experience in general business management or with corporations that are similar in size and scope. Candidates must also be willing to serve on the Board, able to devote the necessary time to fulfill their duties and responsibilities and be under 73 years old.

The committee recommends potential candidates based on their qualifications and independence and how these qualities balance with the skill set of the current Board, the structure and composition of the committees and the director retirement schedule. This assessment helps the Board determine the best mix of skills and experience to guide our business operations and our long-term strategy.

The committee ensures that the board seeks expertise in the following key areas:

• Accounting/audit
• Human resources & compensation
• Capital markets
• Major projects
• CEO
• Mergers & acquisitions
• Electric power
• Operations/health, safety, sustainability & environment
• Energy, midstream & transportation
• Risk management
• Governance
• Strategy & leading growth
• Government & regulatory
• Upstream oil & gas

An independent board is a fundamental principle of governance. The Board believes that the majority of our directors must be independent in accordance with applicable Canadian legal requirements and guidelines, and consistent with the applicable independence criteria of the regulations of the SEC and rules of the NYSE.

The Governance committee and the Board review the independence of each Board member at least once a year. The Board considers whether directors serving on boards of non-profit organizations which receive donations from TC Energy post any potential conflict. The Governance committee also reviews family relationships and associations with companies that have relationships with TC Energy when it reviews director independence.

The Board has determined that 13 of 14 or 93 per cent of the directors are independent. Mr. Poirier is not independent because of his role as President and CEO.

Other than as noted above, none of the directors have a direct or indirect material relationship with TC Energy that could reasonably be expected to interfere with the exercise of his or her independent judgment.

The Board believes that it is important for it to be composed of qualified, diverse and knowledgeable directors. Due to the specialized nature of the energy infrastructure business, some of our directors can be associated with or sit on the boards of companies that ship natural gas or liquids through our pipeline systems. Transmission services on most of TC Energy’s pipeline systems in Canada and the U.S. are subject to regulation and, accordingly, we generally cannot deny transportation services to a creditworthy shipper. The Governance committee monitors relationships among directors to ensure that business associations do not affect the Board’s performance.

In circumstances where a director declares a material interest in any material contract or material transaction being considered at a meeting, the director is not present during the discussion and does not vote on the matter.

The board has determined that all of the members of its Audit Committee are financially literate. An individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by TC Energy's financial statements.