How We Decide: Our Approach to Effective Governance
Sustainability at Domtar is more than what we do and how we do it – it is also about how we decide what we do. We believe sound corporate governance is critical to Domtar’s long-term success and protection of the interests of our many stakeholders.
Effective corporate governance enables us to work efficiently to identify, analyze, discuss and respond to societal trends, changing consumer expectations, and other business risks and opportunities. Too much governance risks being tentative and slow to respond; too little governance risks poor, short-sighted decisions without proper diversity of thought, oversight and controls.
Domtar’s Enterprise Risk Management (ERM) process is an important bridge between company operational issues and corporate governance. Our Board and Audit Committee work closely with Management to oversee Domtar’s ERM process, and to identify, prioritize and regularly review key risks. Our ERM process evaluates factors such as: impact of new regulations, our license to operate, scarcity of resources, severe weather events, changing market demand and public expectations, supply-chain disruptions, asset quality and human capital.
We pursue opportunities that achieve our strategic, business and operational objectives in a manner that involves an acceptable level of risk. We acknowledge that our various business goals can sometimes be divergent, requiring optimization decisions. Making good decisions requires quality and timely information, a precautionary approach to managing complex risks and a willingness to make trade-offs that reflect our values when necessary. Our Internal Audit team provides additional oversight and appropriate checks and balances to our work.
Domtar also benefits from having empowered interdisciplinary groups of managers with a wide range of experiences and backgrounds to establish and execute our strategies for sustainability, diversity and inclusion. These committees support the work of our Management Committee and Board to improve their ability to provide the company more informed guidance and decisions.