The global economic challenge, heightened stakeholder expectations and an increasingly complex regulatory environment demand that we conduct our business at a high standard. Trust, transparency and accountability are today's expectations for companies, starting with board members and senior executives.

Corporate governance remains a critical part of Suncor's business culture and practice. From the Board of Directors to the senior management team to the most junior of employees, making decisions responsibly and in the best interests of our shareholders and stakeholders is a key focus.

Leadership starts at the top

Suncor's experienced and diverse Board of Directors sets the standard for the company's governance structure— balancing the need for economic growth with environmental stewardship. Its role is to oversee the management of Suncor's business and affairs on behalf of the company's shareholders. It constantly reviews our performance to see we are living up to regulatory requirements as well as the standards of excellence we set for ourselves. Its responsibilities include:

• identifying and managing risk
• strategic planning, and
• establishing and enforcing Suncor's standards of ethical conduct.

We see the importance of good governance

Historically, corporate governance was simply about protecting a company's tangible wealth—the capital and human assets that affect our bottom line.

With the rapid deterioration in the global economy and questions being raised about our industry's environmental commitment, investors and the general public are looking for certainty.

That's where Suncor's commitment to strong governance comes in. We're not only conducting our business responsibly—we're focused on reporting our activities in an honest transparent fashion. Now, more than ever, we're working to maintain customer confidence and corporate reputation.

Suncor's Standards of Business Conduct compliance program is a critical part of the company's governance program. All employees and contract workers are required to annually acknowledge they have complied with the company's business conduct policies in areas including:

• competition
• harassment, and
• conflict of interest

Full compliance is then reported to Suncor's Board of Directors. Employees with concerns about business conduct are able to voice them through a confidential Integrity Hotline monitored by Suncor's internal audit team. The team investigated a total of 40 calls in the past two years—18 in 2007 and 22 in 2008. Forty of those calls required follow-up action. The total number of calls was up from the 25 calls reported in the 2007 Report on Sustainability.

Structure and governance

We recognize effective corporate governance comes with leadership combined with good corporate structure. Economic, environmental and social issues can't be considered separately; they have to be integrated as part of our strategic decision-making process. That's helped drive our corporate structure:

• Suncor's Board of Directors and its committees have clearly defined and distinct oversight roles to protect the interests of our shareholders and stakeholders set out in terms of reference. These terms of reference are reviewed and confirmed on an annual basis.
• The Board's Environment, Health and Safety committee monitors changing regulatory expectations and emerging trends to ensure we are anticipating future challenges and positioning ourselves to minimize any risks.
• Our senior management team integrates key operational and functional accountabilities for maximum efficiency and effectiveness.
• Our Vice President, Sustainable Development, reports directly to Suncor's Chief Operating Officer.
• Suncor's Sustainable Development team is charged with developing strategies and operational goals and assessing progress.
• Environment, health and safety employees have direct access to senior management and our Board of Directors.

A comprehensive description of Suncor's governance practices is available in the company's annual Management Proxy Circular and related governance policies. A print copy of the current 2009 Management Proxy Circular (PDF, 400 pp., 2,674 KB) is available by calling 1-800-558-9071.