AN OPEN LETTER FROM SNC-LAVALIN
GWYN MORGAN, CHAIRMAN OF THE BOARD ROBERT CARD, PRESIDENT AND CEO
SNC-Lavalin is dealing with some very difficult challenges that have put the Company in the public eye. Given these extraordinary circumstances, we wanted to communicate directly to our most important stakeholders, our partners, our clients, our employees, and our investors, the steps we have taken to manage the recent issues that have affected us this year. We want to assure you that although we continue to deal with the fallout of past actions, the Company’s foundation is strong and we are committed to taking every measure necessary to ensure that our reputation will not be permanently tarnished by this situation. Most importantly, we want to recognize the exemplary efforts of our more than 28,000 employees around the world who are working hard every day to deliver exceptional results for clients in Canada and around the globe.
At our annual Strategic Planning meeting this month, the Directors of SNC-Lavalin examined the status of the actions taken since the Board’s Independent Review of last March and we made some further key decisions separately announced today. In the spirit of transparency, the Board wishes to update you on where we are to date and what is planned:
ETHICS AND COMPLIANCE
We are implementing all of the recommendations from the Board’s March report regarding compliance and ethics measures, plus others subsequently identified. Among other accomplishments are the updated Code of Ethics and Business Conduct, along with its training and certification, available in 12 languages; an improved complaint reporting procedure and an ethics and compliance hotline; an enhanced Agents Policy and agent review process; procedures that require suppliers and partners to adhere to the same standards and policies as our own people; and plans for external validation by third parties and independent experts in compliance, anti-corruption and governance, as well as extensive benchmarking against global peers. In addition, we have reinforced our corporate structure to monitor and enforce these new procedures, a process which is continuously being upgraded.
COOPERATION WITH AUTHORITIES
All information that was uncovered as part of our independent review was turned over to authorities beginning in March 2012 and we continue to collaborate with them. The Company has cooperated fully with ongoing investigations aimed at identifying and bringing wrongdoers to justice. We encourage our employees to do the same. We understand that these investigations bring with them outcomes that are difficult but are required in order to identify the problems and those who are responsible. The Board and Management of SNC-Lavalin are determined to see anyone found to be involved in wrongdoing brought to justice and held accountable for their actions. We reserve our rights to assert claims against these individuals, including for the recovery of funds.
BOARD RENEWAL
The past year has been highly challenging for both employees and the Board. While there were some long-serving directors who had planned to retire from the Board at the 2012 Annual General Meeting, all agreed to stay on to deal with the difficult issues faced by the company and served the Company with diligence, commitment and integrity. As we approach the May 2013 Annual General Meeting, certain directors have indicated their intention not to stand for re-election. The Board’s Governance Committee has an ongoing process whereby needed skills are identified and a search conducted. In addition to a new CEO, several very capable directors have recently been added under this process, such as former Dow Chemical Company CEO Mike Parker in 2010, the former President and CEO of Export Development Canada, Eric Siegel in 2012, and Schlumberger’s former head of global oilfield services, Chakib Sbiti in 2012. Given upcoming director departures, recruitment of other highly qualified directors is being given high priority. The objective is to present the shareholders at the Annual General Meeting with director nominees who blend deep knowledge of the company with new skills and perspectives.
STRATEGIC PLANNING
A framework has been outlined to the Board that puts strong emphasis on better integration of products and services throughout the company and an increased globalized presence. This framework will also help address the need to leverage the full value of SNC-Lavalin’s portfolio of infrastructure investments. There will be more to follow in the weeks to come as the management team continues to evolve and implement its forward-looking strategy.
SNC-Lavalin’s Board and management are determined to put this unfortunate chapter in this great company’s 101 year history behind us, all the while without forgetting the lessons learned, and to return our focus to designing, building and managing vital infrastructure projects for communities around the world. The excellent quality of our directors, our management team, and our people in 100 countries globally mean that we are well poised for the next and even stronger second century of growth. To follow our progress as we continue to share regular updates on what we are doing to address the issues we’re working on, please see www.snclavalin.com/followus.