Annual Report 2010

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CORPORATE GOVERNANCE REPORT 2010 The Audit Committee shall according to the terms of reference be composed of three non-executive Directors and the members during 2010 were William A. Rand, Chairman of the Committee, Magnus Unger and Asbjørn Larsen. All members were independent of the Company and the Group management and Asbjørn Larsen was also independent of the Company’s major shareholders. Asbjørn Larsen’s previous assignments include the position of Chief Financial Oﬃcer and Chief Executive Oﬃcer of a Norwegian listed upstream petroleum company and he therefore has extensive experience in accounting and audit matters. The Audit Committee held six meetings in 2010. Further details regarding the work of the Audit Committee can also be found in the section regarding internal control on pages 48–49. Reserves Committee In connection with the listing of the Lundin Petroleum shares on the Toronto Stock Exchange on 24 March 2011, a Reserves Committee of the Board was created in 2011 in accordance with applicable Canadian securities regulation. The function of the Reserves Committee is to review and report to the Board on matters relating to the Company’s policies and procedures for reporting oil and gas reserves and related information. National Instrument 51-101 (NI 51-101) issued under applicable Canadian securities regulation prescribes standards of disclosure for oil and gas companies, and assigns certain responsibilities to the Board in respect of the Company’s compliance with NI 51-101. The Board is entitled to delegate certain of its responsibilities under NI 51-101 to the Reserves Committee. In particular, the Reserves Committee is to report to the Board on the Company’s procedures for disclosing oil and gas reserves and other related information, on the appointment of the independent qualiﬁed reserves auditor and on the Company’s procedures for providing information to the independent qualiﬁed reserves auditor. The Reserves Committee is also to meet with management and the independent qualiﬁed reserves auditor to review, and determine whether to recommend that the Board approve, the statement of reserves and other oil and gas information required to be submitted annually under NI 51-101. The Reserves Committee shall according to the terms of reference be composed of Directors, the majority of which are independent as deﬁned in NI 51-101. The members appointed in February 2011 were Ian H. Lundin, Chairman of the Committee, and Asbjørn Larsen. MANAGEMENT Management structure The President and CEO of the Company, C. Ashley Heppenstall, who is also a member of the Board of Directors, is responsible for the management of the day-to-day operations of Lundin Petroleum. The CEO is appointed by, and reports to, the Board and is also responsible for ensuring that the Board receives, in accordance with the Board’s instructions to the CEO, all relevant information to ensure that the Board’s decisions are well-founded. The CEO is assisted in his functions by the other members of Executive Management and other Group management. The main responsibility for the operations of subsidiaries, and for ensuring that all of Lundin Petroleum’s internal rules and principles are followed by all Group companies and employees, rests with the manager of each subsidiary (General Manager/ Managing Director), as well as with Group management. General Managers/Managing Directors regularly report on all commercial, technical, HSE, ﬁnancial and legal issues to the Group’s Executive Management. The remuneration of management in 2010 and the Company’s Policy on Remuneration are described in the notes to the ﬁnancial statements – see Note 45 on pages 89–91. Investment Committee The Board of Directors established an Investment Committee in 2009 to assist the Board in investment related decisions. The Investment Committee’s tasks include reviewing and evaluating investment proposals, annual budgets, supplementary budget approvals, commitments, relinquishment of licences etc, as well as reviewing and approving the Group’s ﬁve year Asset Business Plan. The Investment Committee reports to the Board and is composed of the Company’s Executive Management being the CEO, the Chief Operating Oﬃcer (COO), Senior Vice President Operations (SVP Operations) and Chief Financial Oﬃcer (CFO). 47

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