Governance
NOVAGOLD approaches the disclosure of our ESG and sustainability performance pragmatically, disclosing benchmarks that we believe are the most relevant measurements of our performance. We are committed to maintaining robust corporate governance practices that enable us to achieve our company goals and maintain the trust and confidence of our investors, employees, regulatory agencies, and other stakeholders. We recognize the importance of consistent, transparent, and proactive communication, and feel that facilitating our stakeholders’ opportunities to share their perspectives with us help deepen our understanding of their interests, concerns, and priorities.
Our independent corporate governance and nominating committee has recently used robust searching procedures to augment our board’s diversity by gender, ethnicity, and age — while ensuring an already excellent standard of competence and skill. We’ve adopted a diversity mandate at both the management and board levels, and periodically review our processes for adherence to all mandates and policies. We’re constantly reviewing the best practices available to find applicable initiatives that suit our corporate goals for continuous improvement. And we’re pleased not only with our progress, but also with the benefits this top-of-mind perspective and prompt execution of initiatives has given to NOVAGOLD.
Sharon Dowdall
Corporate Governance and Nominations Committee Chair
NOVAGOLD RESOURCES INC.
NOVAGOLD President and CEO Greg Lang with Pathfinder pilot Cullen Lester at the NOVAGOLD & Barrick site visit in September 2021.
NOVAGOLD establishes rigorous annual goals and discloses details of those goals for the upcoming year, as well as levels of achievement for the goals of the previous year, in its management information circular. The executive team and the board work together to set long-term strategic company goals and short-term annual goals. The assessment of performance against these goals is monitored regularly during the year by the board. At the end of each year, the board’s compensation committee leads the annual review of company goal-setting and performance, and executive performance evaluations, and makes recommendations regarding the executive and director compensation programs.
At NOVAGOLD we recognize the importance of having not only the right policies and practices in place, but also the relevant oversight and insight to global change as it pertains to the company and its project. This will ensure the company will continue to adjust and respond to our rapidly changing world and to best serve the company’s stakeholders.
NOVAGOLD is revisiting its established enterprise risk management (ERM) policies, transitioning to a fully integrated approach to ERM. This will incorporate sustainability-focused risks and actions into the complete risk profile and ensure they will be assessed and managed in conjunction with risks pertaining to finance, technology, legal, and other focus areas. Understanding the dependencies between risks and control strategies results in optimized business planning and identification of areas needing further challenge and scrutiny. NOVAGOLD’s ERM policies and practices are being integrated into our overall planning, strategy, and goals process, and will be reviewed regularly with the board.
The board is committed to sound corporate governance practices, which are in the interest of shareholders and contribute to effective and efficient decision-making. As part of the company’s commitment to effective corporate governance, the board, with the assistance of the audit and corporate governance and nominations committees, monitors changes in regulatory requirements and best practices. Strong corporate governance helps us achieve our performance goals and maintain the trust and confidence of our investors, employees, regulatory agencies, and other stakeholders.
CORPORATE GOVERNANCE SUMMARY
DIRECTOR INDEPENDENCE
- Nine of our 11 nominees are independent.
- All of our key board committees (audit, compensation, and corporate governance and nominations) are composed exclusively of independent directors.
- Our CEO is the only executive director.
BOARD LEADERSHIP
- The positions of chairman and CEO are separate.
- Our board has appointed an independent lead director.
ACCOUNTABILITY AND SHAREHOLDER RIGHTS
- Extensive shareholder engagement involved reaching out to holders of approximately 90 percent of our shares in 2021.
- All directors stand for election annually.
- In uncontested elections, directors must be elected by a majority of votes cast.
- Eligible shareholders may nominate directors and submit other proposals for consideration at annual meetings.
BOARD PRACTICES AND GOVERNANCE
- Our board regularly reviews its effectiveness.
- In January 2022 the board adopted a Diversity, Equity and Inclusion Policy.
- In 2021 the board adopted a written board charter to formalize its practices and responsibilities.
- The independent directors meet in executive session without the presence of management or the non-independent directors immediately following each board meeting.
SHARE OWNERSHIP
- In August 2020, our board increased the share ownership requirements for our directors and our CEO.
- Our directors must hold at least $128,400 (three times their annual retainer) worth of NOVAGOLD common stock within five years of joining the board (increased from C$50,000).
- Our CEO must, within five years of commencement of employment, hold NOVAGOLD common stock valued in an amount at least equal to five times their annual base pay (increased from three times his annual base pay).
- Our CFO must, within five years of commencement of employment, hold NOVAGOLD common stock valued at an amount at least equal to two times their annual base pay.
- Hedging or pledging of NOVAGOLD stock is prohibited for directors as well as employees.
- NOVAGOLD encourages its employees to be shareholders in the company by making share-based compensation and employee stock purchase programs available to all employees.
BOARD OVERSIGHT OF RISK MANAGEMENT
- Our board reviews NOVAGOLD’s systematic approach to identifying and assessing risks faced by NOVAGOLD and its projects.
- See the chart below for a description of the board’s allocation of risk assessment oversight.
- Additional information and detail about goal-setting methodology and measurement can be found in the 2022 Management Information Circular dated March 25, 2022 available on www.sec.gov, www.sedar.com, and www.novagold.com.