Ethics

We believe ethical behavior is fundamental to the way we do business. Our Code of Business Conduct and Ethics (the Code) ensures every director, executive officer, employee and contractor represents Precision’s values. Our full Code of Business Conduct and Ethics policy is available on www.precisiondrilling.com.

We have a robust, proven corporate governance system that is effective in ensuring a transparent culture. It allows for ethical issues to be reported, assessed and resolved in a timely manner. This system employs a strong body of policies, enforcement mechanisms and a closed-loop resolution process of each and every ethical issue reported. 

The Code addresses the following key areas, among others:

• financial reporting and accountability
• maintaining confidentiality
• avoiding conflicts of interest
• complying with laws
• safeguarding corporate assets
• reporting illegal or unethical behavior
• fair dealing
• disclosure
• anti-retaliation
• data and privacy security
• bribery and corruption
• harassment and discrimination.

Every director, executive officer and employee must acknowledge annually that they have read, understood and will abide by the Code. Each member of the senior management team must also certify quarterly whether they are aware of any breaches of the Code. In-person and online training is provided annually to all permanent employees and covers an array of topics related to business conduct and ethics.

A hotline is available for anyone at Precision and outside the Corporation to report, confidentially and anonymously, any suspected illegal conduct or breach of our policies. With the oversight of the Audit Committee, there were no reportable ethics incidents in 2018 and 100% of the issues reported through the ethics hotline were reviewed and resolved. An independent third party operates the hotline and notifies the Audit Committee Chair immediately upon receiving a complaint. Reports are reviewed by our legal, internal audit and human resources groups, investigated by the appropriate department based on the allegation, and reported quarterly to the Audit Committee, or the HRCC, depending on the nature of the allegation.

Anti-Bribery and Anti-Corruption

We recognize that we operate in some countries with low ranking on the Corruption Perception Index, as compiled by Transparency International. To this extent, Precision has an Anti-Bribery and Anti-Corruption Policy that sets out the Corporation’s standards for detecting and preventing corruption. Our compliance department provides mandatory, comprehensive training annually on issues dealing with bribery and corruption for certain groups of employees. Additionally, in-person training is delivered throughout the organization as needed. There have been no internal or external investigations regarding non-compliance with anti-bribery and corruption laws or our policies and there are currently none underway.

Insider Trading

Our Insider Trading Policy applies to all directors, executive officers and employees. Reviewed every year by the Corporate Governance, Nominating and Risk Committee, the policy:

• sets out our obligations to stock exchanges, regulators and investors
• prohibits “tipping” or the purchase or sale of Precision shares while in possession of undisclosed material information
• establishes a regular black-out calendar
• prohibits short-term trades, purchases on margin, short sales, trading in derivatives, or hedging the value of Precision shares through specific financial instruments
• requires insiders to pre-clear trades of Precision shares
• prohibits insiders from participating in equity monetization transactions involving any unvested equity awards under our long-term incentive plans or Precision shares that constitute part or all our terms for meeting our minimum share ownership guidelines. 

Claw backs

Our senior leadership team must be accountable for their decisions. As such, we have designed our compensation program so that any consequences stemming from our policies, employment agreements and incentive plans align with Precision's best interests.
Our clawback policy entitles us to recoup some or all the incentive compensation awarded or paid to our senior leadership team, including our CEO, both past and present, if:

• there was a restatement of our financial statements for a fiscal year or fiscal quarter when they were with Precision
• there was an error in calculating executive compensation during their time with Precision, or
• the member of the senior leadership team engaged in misconduct, including fraud, non-compliance with applicable laws and any act or omission that would entitle an employee to be terminated for cause.

The policy was revised in 2017 to include our ability to recoup incentive compensation from members of our senior leadership team that engaged in alleged or proven misconduct.
The policy applies to all forms of incentive awards including bonuses, restricted share units, performance share units and stock options.

Avoiding Conflicts of Interest

The Board is committed to making all decisions in the best interests of Precision and considers the interests of our shareholders, customers, employees, suppliers, communities where we operate, the environment, governments, regulators and the general public.

From time to time, directors will face potential conflicts of interest related to our business. Some directors may hold management or director positions with customers or with other oilfield services providers that may be in direct competition with us. Some may also be involved with entities that periodically provide financing or make equity investments in companies that compete with us. Any conflicts are subject to the procedures and remedies set out under the Business Corporations Act (Alberta). If directors find themselves in a conflict of interest, they will advise the Chairman of the Board, abstain from participating in any discussions and voting on the matter or excuse themselves from the meeting.

Our employees are also required to disclose any additional or potential conflicts of interest. The conflicts disclosed are reviewed by our Audit and Compliance departments until they are resolved to management’s satisfaction. 

Health, Safety and Environment

The health and safety of our employees is a core value at Precision, and daily we work to set the standard for safety in our industry. We know that by investing in state-of-the-art technologies, maintaining clean and organized work sites, and doing our job the right way, we are protecting our people, the environment, our customers and our neighbors.

Our Global Quality Health, Safety and Environmental Management System is strongly integrated into our culture to help ensure our practices are consistent throughout our operations. We also have a Safety and Corporate Responsibility Council that assists our Board of Directors in fulfilling its role of overseeing these functions by reviewing, reporting and making recommendations on our policies, standards and practices.

Precision fosters our safety culture through strong leadership, technical and compliance training, and proven support systems. Every day, we invest in our employees to prepare them for any and every situation on the rig. Our Technical Support Centre training facilities are located in Houston, Texas, and Nisku, Alberta, where more than 6,145 employees were trained in 2018 on Precision’s culture, rig personnel and responsibilities, tools and equipment, safety and environmental protocol and procedures, leadership and team-building.

Environment and Climate Change

We are conscious that advances in technology play a critical role in meeting global energy demand and we do our part to conduct business in a manner that is compatible with the environmental and economic needs of the communities in which we operate. We are continuously investing in improving our rig technology. Our advanced technology makes our operations more efficient, safer for our employees and significantly reduces our impact on the environment. Our modern fleet and digital enablement strategy allows operators to rely on data driven insights and real time automation to make faster and smarter decisions. This digital transformation limits energy use, maximizes output and drives more productivity. We continually explore new technologies and standardize operating procedures to improve our equipment life cycle management while maximizing our overall performance to minimize waste and our environmental footprint, including reduced greenhouse gas emissions. In 2018, 20% of Precision’s fleet was configured to be powered by natural gas, which releases fewer greenhouse gas emissions than diesel, therefore reducing Precision’s, and our customers’, environmental footprint. Our customers aggregate and report fuel usage with respect to greenhouse gas emissions and we believe our efforts help reduce these emissions.

Precision commits to operating in a way that reduces our impact on the environment and minimizes greenhouse gas emissions. We strive to minimize potentially negative environmental impacts by:

• using bi-fuel systems to reduce greenhouse gas emission
• using natural gas engines that burns lower carbon fuel
• working with operators on solutions to mitigate noise pollution in and around highly populated areas
• using industry best practice processes to ensure spill prevention
• designing our rigs to require fewer truckloads to mobilize, move or deploy our rigs
• enhancing drilling technologies to focus on improved drilling efficiencies, allowing us to drill wells faster and move in and out of a location sooner
• improving technology and investing in leading the industry with Process Automation Control to reduce our environmental footprint by improving drilling efficiencies
• designing our rigs to use pad walking systems to reduce our environmental footprint by improving drilling efficiencies.

Performance Indicators

We have bold Health, Safety and Environmental goals devoted to achieving what we call Triple Target Zero Days, our internal scorecard that recognizes injury-free performance, safe driving behavior and zero spills that could impact the environment.

Emergency Preparedness

Precision has a successful comprehensive crisis and emergency preparedness program in place that equips our employees as well as our leadership team to respond effectively and efficiently when such an event occurs.

We conduct annual global training and tabletop drills as a commitment to continually grow and improve as a responsible organization.

Talent Management

Precision invests in our people, and we strive to have high-performers throughout every level of our company. We implement systems and processes that help us execute our talent management strategy to maintain a well-trained, competent, highly capable talent pool with a broad range of business experience throughout market cycles.

In 2018, we developed the Precision Drilling University Resource Center (PD University), a central online hub where employees can learn more about our competencies, training resources, and education assistance. PD University is divided into two segments: the School of Toughnecks and the School of Leadership. The School of Toughnecks focuses on the development and dissemination of training to develop the best crews in the industry, ensuring that our field employees have the skills they need to deliver our High Performance commitment. The School of Leadership is focused on developing our next leaders. The curriculum is based on workshops delivered by our executives and supported by our learning and development professionals.

Our proactive talent management strategy helps us maintain a strong workforce when the industry experiences manpower shortages during peak operating periods. In 2018, we onboarded over 2,500 new employees. Between Precision’s technical centres and seven field coaches, we have trained more than 6,100 employees and performed approximately 3,500 rig-based competency assessments.

Our talent management strategy enables Precision to:

• retain experienced field personnel during market cycles
• support targeted recruitment initiatives
• reward the achievement of our short-term and long-term strategic objectives.

Precision manages a comprehensive summer internship program. In 2018, we hosted 66 interns from 24 universities working throughout 19 departments in Canada and the U.S. We believe our summer internship program provides an important talent pool for our permanent hires and provides participants with practical experience in the oil and natural gas industry that cannot be obtained in the classroom.

As part of our employee engagement strategies, we offer company-supported social activities to promote collaboration, worklife balance and interaction with the families of our employees. We also hold annual wellness campaigns to support the health and well-being of our employees and hold ticket draws to concerts, sporting events, and other entertainment to provide employees with social opportunity incentives.

Diversity and Inclusion

We believe in building a team of exceptional employees who bring a wide range of ideas, perspectives, skills and cultures to our company. Precision has made a commitment to be a workplace free from discrimination, harassment, workplace violence and retaliation. Our diversity and inclusion policy prohibits discrimination of any kind and promotes diversity and inclusivity among our employees, management team and board members.

We adopted a diversity and inclusion policy in 2015 that considers gender, race and other factors with the objective of promoting diversity and inclusion among our employees, management team and the Board to foster an environment where we can draw on the widest range of knowledge, skills, perspectives and experience. As a company with operations in several countries, we place high importance on ensuring that we have a geographically diverse board and management team.

We aim to create a workplace free from discrimination by posting gender-neutral job listings for positions throughout the organization. We encourage female applicants who meet the criteria to apply.

Board Diversity

When recruiting new directors, the Corporate Governance, and Nominating Committee (CGNRC) considers candidates on merit. It considers our vision and business strategy, the skills and competencies of the current directors, any gaps in Board skills, and the attributes, knowledge and experience new directors should have to best enhance our business plan and strategies. The CGNRC also considers diversity as part of this process, including the level of female representation on the Board.

Management Diversity

Increasing diversity at the management level is essential to maintaining our competitive advantage and is a factor in managing our talent pool and making strategic hires.

The executive leadership team reviews the talent pool regularly and considers the individual’s development, industry experience, background, race, gender and other factors before recommending management appointments to the Board for approval. The Board also considers the representation of women and geographic diversity, amongst other factors, in executive positions when reviewing the management succession plan and approving executive appointments.

Reporting and Accountability

The human resources department reviews the structure, size and composition of our workforce annually and prepares a report for the Chief Administrative Officer and the President and Chief Executive Officer. Similarly, the executive leadership team meets regularly to assess its optimum composition, and annually provides a report to the CGNRC. 

Philanthropy & Community Engagement

We are proud to invest in causes that are important to our employees, customers and communities where we work. Through Precision’s corporate giving program, we contribute to a number of exceptional health and human services organizations and youth programs.

Throughout Precision’s history, our proudest partnership has been with the Shock Trauma Air Rescue Services (STARS) Foundation, which operates emergency air ambulances in Canada and has the ability to support our remote field operations in western Canada. We have supported STARS since 1991 and continue to maintain our contribution and involvement through economic downturns.

In 2018, we established a multi-year partnership with the Heritage Park Society of Calgary to support the Natural Resources Project, “Keeping Alberta’s Story Alive”. The Heritage Park Society will restore, build and create programs in the Natural Resources Area for the education, enlightenment and enjoyment of over 600,000 annual visitors and over 60,000 school children at Heritage Park.

A few of our other financial commitments in 2018 included:

• Kids Cancer Care Foundation of Alberta to provide programs to meet the needs of the whole family at each stage of the cancer journey, from diagnosis through treatment and beyond
• Unlocking Potential Foundation of Calgary to provide unparalleled education and community outreach programs to equip individuals with the knowledge and skills to deal with issues and live life to its’ fullest
• Fraser Institute to improve the quality of life for Canadians, their families, and future generations by studying, measuring, and broadly communicating the effects of government policies, entrepreneurship, and choice on their well-being
• Spindletop Charities of Houston to provide aid programs targeting child abuse prevention, pediatric medical research, drug and alcohol abuse prevention and rehabilitation, education and scholarships, school safety, therapeutic services and after-school programs, and family health
• Protect Colorado to promote responsible oil and natural gas development
• Girls, Inc. of Greater Houston to advocate on behalf of girls and deliver life-changing programs and experiences Make A Wish Foundation to strengthen and empower children battling critical illnesses.

Volunteering in the Community

We understand the value of volunteering and have a desire to do more in the communities where we work. We continue to find new ways to obtain and attract new talent and establish a more purpose-driven and engaged workforce. We encourage our employees to participate in company-sponsored volunteer opportunities. In 2018, 600 employees volunteered over 2,500 hours of time towards numerous organizations aligned with our giving philosophy. A few of our high impact initiatives in 2018 included:

• Donation drives for the Houston Food Bank and the Calgary Foodbank to provide nutritious food to school-aged children at-risk of hunger and to families and individuals facing crisis
• Completed the annual spring clean-up at Camp Kindle for the Kids Cancer Foundation of Alberta to create camp experiences for children with cancer
• Participated in the MS150, an annual bike ride from Houston to Austin raising funds for the National Multiple Sclerosis Society
• Held blood drives for Calgary Blood Services to ensure life-saving blood products are delivered to hundreds of people across the country each day
• Prepared meals and donated funds to Inn from the Cold in Calgary for shelter residents
• Held an annual hockey tournament for employees and customers in Calgary with proceeds donated to the Highbanks Society to provide affordable housing and a nurturing community where young families can learn and grow
• Donated backpacks filled with school supplies to children through the Calgary Board of Education and the Houston YMCA The 2018 participants of our Leadership Development Program assembled bikes for underprivileged children
• Held clothing drives to obtain lightly used professional wear to support people in need who are re-entering the work force Provided presents to seniors and families in shelters and care facilities so they can enjoy the holiday season.

Scholarship Program

Precision recognizes the value of post-secondary education and supports the children of our employees in their efforts to further their education. Precision has a long-standing scholarship program to assist children of employees who plan to continue their education journey in college or vocational school programs. Precision partners with Scholarship America to administer the application process and all scholarships are granted without regard to race, color, creed, religion, sexual orientation, age, gender, disability, or national origin. In 2018, scholarships were provided to the children of 30 of our employees. Precision also recognizes the legacy of numerous long-serving employees who have retired from the company by supporting annual scholarships with several education institutions across North America in the name of the retiree.

Public Policy & Lobbying

Precision is politically neutral and does not engage in political activities or make political contributions. We may not use company funds or assets for political purposes. However, we are active members of various associations that conduct lobbying on behalf of the oil and gas industry, and we allow lobbying on behalf of Precision’s interests, in accordance with all federal and provincial regulations.

Feedback

We welcome engagement with our stakeholders on our Corporate Responsibility disclosures. Please contact us at investorrelations@precisiondrilling.com with your feedback.