Our governance structures, policies and processes serve to promote a culture of accountability and ethical conduct across our Company and support our commitment to address global challenges through our core business. We believe that effective corporate governance is vital to the continued and long-term success of Westport Fuel Systems and contributes to maximized shareholder value over time.
Figure 1: Overview of Westport Fuel Systems’ Governance Structure
The Board conducts its business under the guidance of the Westport Fuel Systems Board of Directors Charter. Pursuant to this Charter, the Board has a number of core responsibilities, including developing and fostering appropriate corporate culture, as well as responsibilities related to executive leadership and oversight, corporate communications, corporate governance, overseeing long-term strategic planning, approving an annual operating plan and budget, reviewing material financing activities, overseeing compliance with applicable laws and regulations, reviewing and approving material transactions, establishing and overseeing executive compensation, risk assessments and internal controls processes and oversight of the Company ESG practices. The Board will carry out these responsibilities and discharge its obligations either directly or through committees of the Board. Any responsibility not delegated to one or more of its committees remains with the Board.
Our Board is currently comprised of eight elected directors who typically hold office until their successor is appointed or until the next annual general meeting of shareholders at which time they may be re-elected or replaced. For full biographies on each of our directors, please visit wfsinc.com/about/leadership. Our independent directors also participate on one or more standing committees. Currently we have three standing committees, Audit Committee, Human Resource and Compensation Committee ("HRC") and Nominating and Corporate Governance Committee ("NCG").
The Board considers the periodic rotation of the membership of each Committee and, from time to time as they see fit, rotates chairmanship of the Board and Committees. During 2019, Ms. Brenda Eprile served as independent Chair of the Board of Directors and since our 2020 Annual and Special Meeting our independent Chair of the Board has transitioned to Mr. Daniel Hancock. Ms. Eprile is now serving as Chair of the Audit Committee. Membership on each standing Committee, as of the date of this report, is as follows.
Table 4: Membership on Westport Fuel Systems Board of Director Standing Committees
|* indicates Chair||Status||Audit||HRC||NGC|
|David Johnson||Not Independent|
|Dr. Viktor Karl Schaller||Independent||X||X|
In 2019 and the first quarter of 2020, the Board held 16 meetings conducted either in-person and via telephone conference. In addition to the regular activities and oversight responsibilities of the Board the following key governance and policy review activities were completed:
In July 2019 our global Diversity Policy was published and expanded on our previously stated diversity guidelines summarized within our Board of Directors Charter. The Diversity Policy describes the guidelines by which we will endeavor to promote diversity and inclusion and a copy can be found on our website at https://wfsinc.com/investors/corporate-governance/.
We were pleased to achieve a gender balanced Board of Directors as three new directors were elected at our Annual General and Special Meeting (“AGSM”) on April 29th, 2020.
Table 5: Gender Diversity of Westport Fuel Systems Board of Directors
|Gender Diversity of the Board of Directors|
|As of December 31, 2018||3 (33%)||6 (67%)|
|As of December 31, 2019||2 (25%)||6 (75%)|
|As of April 29, 2020 (post AGSM)||4 (50%)||4 (50%)|
In 2018 we created a Sustainability Working Group to support the collaboration and development of our global ESG reporting, build on continuous improvement efforts and to raise awareness of social and environmental performance. The working group reports on Westport Fuel Systems’ sustainability performance and makes recommendations to leadership including the Vice President Sustainability and External Affairs, Chief Financial Officer and Chief Executive Officer.
Our eight-member Board is committed to effective corporate governance and fulfilling its duties of stewardship and accountability. This commitment included an amendment to the Board of Directors Charter to formalize responsibilities related to overseeing our approach to ESG matters. These responsibilities include oversight of the adequacy of management systems to identify and manage ESG related risks and opportunities, adoption of appropriate ESG standards, tracking and monitoring of the Company’s ESG performance and ESG performance disclosure.
As delegated by the Board, the Audit Committee has primary responsibility for oversight on the adequacy and effectiveness of the reporting systems and related internal controls developed and implemented by management in connection with ESG disclosure and other non-financial data included in our ESG Report.
The Board and our leadership team believe that an effective, independent Board plays a crucial role in maximizing shareholder value and ensuring ethical and sustainable business practices and policies. As part of our ESG reporting, our Board has reviewed and approved this report.▲ top
Our values of integrity, respect and perseverance guide our relationships and interactions with employees, customers, suppliers and investors. These values are fundamental to our business partnerships, our continued success in the marketplace and are a source of pride for our team.
Our integrity is one of our most precious assets and in this rapidly changing environment, with new laws and new stringent regulatory requirements we remain firmly focused on our compliance efforts and operating our business in an ethical manner. Our Code of Conduct which was updated in 2019 reflects our commitment to a culture of honesty, integrity and accountability and outlines the basic principles and policies to which all directors, officers, employees, contractors, agents and consultants who act on behalf of the Company in any business dealings must comply.
We updated our ethics and integrity training in 2019 to include an online component offering a more engaging and interactive approach, a broader range of ethics and compliance topics, and the introduction of real-life scenarios relevant to our employees. The training is available in five languages and we directly link the modules to our Code of Conduct and other related stand-alone policies. We are pleased to report that 95% of employees enrolled completed the course successfully in 2019.
The Code of Conduct helps us uphold our values and establishes our expected conduct in a number of specific areas including:
We have further supplemented the requirements of our Code of Conduct through the adoption of policies covering; anti-corruption and bribery, the disclosure of material information and external communications, the prohibition of harassment, discrimination and retaliation and the prohibition of insider trading. A certificate attesting compliance with the Code of Conduct is acknowledged annually by all directors, officers, employees, and contractors and proposed amendments must be approved by our Board.
The Code of Conduct is available in five languages, all of which are posted to the Committed to Integrity section of our website at https://wfsinc.com/about/commitment-to-integrity/.
Global Launch of a New Code of Conduct
In 2019, we launched a new Code of Conduct in support of our ongoing efforts to ensure our global and diverse workforce is empowered to do the right thing, for the right reason and in the right way.
The new Code was designed to offer a more user-friendly and engaging format to improve clarity and use, include question and answer sections to address hypothetical issues which could arise in the workplace and included key amendments as follows:
The Code was launched with online multilingual training covering all the critical areas. Training and certification were initiated in November 2019 in preparation for our 2020 reporting year.
We have channels in place to ensure there is opportunity for employees, suppliers or other stakeholders to raise concerns about corporate conduct. Individuals can report violations directly to management or in confidence to an anonymous ethics hotline using a 24-hour phone line, email addresses (for a variety of contacts), web portal submission or by physical mailing address.
All reports are forwarded to our Internal Audit Department and the individual’s identity is kept strictly confidential unless that person has authorized such disclosure in writing. Individuals are however encouraged to put their names to allegations as appropriate follow-up questions and investigation may not be possible unless the source of the information is identified. All concerns or complaints reported through the Ethics Hotline are promptly brought to the attention of the Chair of the Audit Committee (or if escalated, to the full Audit Committee) with the assistance and direction of whomever the Chair or Audit Committee thinks appropriate including, but not limited to, external legal counsel. Oversight of this process is governed by the Audit Committee of our Board.
We have an established Whistleblower Policy as reassurance that reporters will be protected from retaliation, reprisals, or victimization for “whistleblowing” in good faith. The Whistleblower Policy is available on our website in the Corporate Governance section at https://wfsinc.com/investors/corporate-governance/.▲ top
We will conduct our business ethically and honestly every day and in every way. We can expect nothing less of each other. We count on every employee and every member of our global network to build business relationships and make business decisions in a way that honours our values and showcases our commitment to integrity.
Compliance is the cornerstone of corporate responsibility at Westport Fuel Systems. We operate in and sell products to customers in more than 70 countries around the world. In a rapidly changing global business environment, we must remain firmly focused on our commitment to integrity and our compliance efforts.
In September 2019 allegations of corruption against the Company were released after the end of a publicly disclosed two-year U.S. Securities Exchange Commission (“SEC”) investigation.After cooperating with authorities throughout the entire investigation, the Company reached a settlement with the SEC on the basis that we neither admit nor deny the alleged violations (for details, see “Management Discussion & Analysis – Regulatory Compliance” in the “Q4 and Year Ended 2019 Financial Report”). This investigation emphasized the importance of awareness regarding compliance-related issues and the importance of entrenching this awareness in our management culture and company values.
Westport Fuel Systems has taken several important steps to progress our continuous improvement efforts and improve compliance and internal control systems, including:
We have also agreed with the SEC to provide a two-year period of self-reporting regarding FCPA compliance activities. We are firmly committed to conducting our business in the most ethical and compliant means possible. This past year has highlighted the importance of continually evaluating our systems to ensure we have what is required to live up to our commitment of integrity and compliance.
The completion of 2019 marks a new chapter, one wherein we can focus all our efforts on achieving our goal to make transportation cleaner, more efficient and more cost effective.
In 2019 we established an executive level Compliance Committee designed to foster an organizational culture with the appropriate tone at the top that reinforces ethical conduct, a commitment to our values and compliance with the law. This includes:
Members of the Compliance Committee consist of the CEO, CFO, SVP Legal, VP Risk Management and Assurance (also the Compliance Officer) and the VP Human Resources. The Compliance Committee is responsible for oversight of the design, implementation and assessment of continuous improvement of a compliance program, with additional oversight by the Board.▲ top
Our Anti-Corruption and Bribery Principles Policy mandate compliance with all applicable laws in the jurisdictions where we operate. These policies apply to everyone within the Company who act on behalf of Westport Fuel Systems in any business dealings and to those who are working in affiliates or joint ventures.
Anti-corruption and bribery education are integrated into the regular training provided to employees through the Code of Conduct certification process. Additionally, for those roles where a higher level of potential exposure to corruption risk is identified, mandatory training including both structured classroom and online components are delivered to ensure that directors, executives, employees and others acting on the Company’s behalf continue to be are aware of and understand corporate policies and procedures specific to anti-corruption and bribery. This training includes the identification of the roles and responsibilities of key stakeholders, potential red flags and risk management techniques as well as the process to report violations or seek clarification.
We offer basic and advanced level online training options. The requirement for enrollment and the level or intensity of training required is determined based on the individual’s role within the organization and their potential level of exposure to corruption risk. All enrolled trainees are required to sign and certify that they have read and understand the policy and their participation in e-learning or classroom training is captured as part of their employee record.
Our training program was launched in late 2018 and we continue to make progress on our 100% target for enrolled employees trained.
|Number Trained |
|Trainee Category||2018||2019||% of Target|
|Governance Body —Directors||3||8||100%|
 In December 2019, 137 target trainees were enrolled and completed the training in early 2020 resulting in a total of 92% of target trained to date.
While we take a top-down approach to setting the standards for anti-corruption and bribery, each Westport Fuel Systems entity is responsible for understanding the specific challenges regarding anti-corruption, the anti-corruption regulations applicable to its jurisdiction and operations, and for adopting adequate anti-corruption guidance and measures. Westport Fuel Systems Anti-Corruption and Prevention of Bribery Principles Policy is available on our website at https://wfsinc.com/about/commitment-to-integrity/.▲ top
We take data security and privacy matters seriously. As our digital solutions expand and our data interaction with customers, suppliers and partners expands so do risks related to privacy and security breaches.
Cybersecurity remains a top priority and our Information Technology (“IT”) leadership is committed to ensuring we have the appropriate measures in place to prevent cyber-attacks. While our focus continues around readiness and prevention, it is also important that we develop a cyber resilience strategy. A task force was established in 2019 representing a variety of relevant organizational functions. Their mandate included defining our cyber resilience framework, building the business continuity strategy and tactics, disaster recovery plans and capturing key business risks beyond IT.
Focused Campaign on Cyber Resiliency
Westport Fuel Systems Inc. today announced the appointment of Tony Guglielmin to the company’s Board of Directors, effective January 7, 2021.
2020 Year in Review and What’s Driving Momentum in 2021
Cummins Westport Inc. today announced changes to its Board of Directors and Management in accordance with the terms of the 50/50 Joint Venture Agreement between Cummins Inc. and Westport Fuel Systems Inc.
Program Applies HPDI to an Updated Base Engine Platform
Westport Fuel Systems Inc. today announced today that the Company has established an at-the-market equity offering program.
Swedish truck maker Volvo said it’s seeing hauliers and transport buyers moving towards refrigerated liquefied gas as a cheaper and more environmentally friendly alternative to diesel.
The Maruti Suzuki WagonR S-CNG has emerged as the highest selling natural gas vehicle in the country, as this greener and safer factory-fitted CNG model has surpassed 300,000 units in sales.
While much attention has shifted to the potential for battery-electric or hydrogen vehicles, another technology with a vast infrastructure — renewable natural gas — is gaining traction among fleet managers.
Egypt has launched an ambitious plan to shift the primary fuel for vehicles in its jurisdiction from petrol and diesel to compressed natural gas.
Natural gas vehicles (NGV) may get a boost as power markets and renewable equipment production are seen as potential casualties.