Finance and Audit Committee
Amended as of
FINANCE AND AUDIT COMMITTEE<< Back
As of November 2018
As of November 2018
FINANCE AND AUDIT COMMITTEE
|Finance and Audit Committee Charter Quicklinks|
|Meetings of the Committee|
|Responsibilities and Duties of the Committee|
- The purpose of the Finance and Audit Committee (the “Committee”) is to assist the Board of Directors (the “Board”) of Louisiana Pacific Corporation (“LP”) in overseeing the (i) the integrity of LP’s financial statements, (ii) LP’s compliance with legal and regulatory requirements, (iii) the independence and qualifications of LP’s independent auditor, (iv) performance of LP’s independent and internal auditors, and (v) LP’s enterprise risk management program. The Committee shall prepare the audit committee disclosure as required by the rules of the Securities and Exchange Commission (the “SEC”) to be included in LP’s annual proxy statements.
- The Committee shall consist of not less than three directors, each of whom must meet the qualification and independence requirements of the New York Stock Exchange (the “NYSE”) listing rules and independence standards set forth in Rule 10A-3 under the Securities Exchange Act of 1934. Each member of the Committee shall be financially literate and at least one member of the Committee shall be, in the judgement of the Board, an “audit committee financial expert,” as defined by the rules of the SEC. The Board shall have the sole authority to appoint and remove Committee members. Committee members shall not simultaneously serve on the audit committees of more than two other public companies.
- The Committee shall meet at least four times per year. One-third of the members of the committee, but no fewer than two members, shall constitute a quorum for the transaction of business. The committee may act by unanimous written consent of all its members. The Committee shall keep a record of all of its actions and proceedings and regularly report on such proceedings to the Board.
- Independent Auditor Oversight and Responsibility
- The Committee shall be directly responsible for the appointment, compensation, retention and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) in preparing or issuing an audit report or performing other audit, review or attest services for LP. The independent auditor shall report directly to the Committee.
- The Committee shall review annually a written report prepared by the independent auditor describing: (i) the independent auditor’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the independent auditor or by a governmental or professional authority inquiry or investigation within the preceding five years with respect to any independent audits carried out by the independent auditor, along with any steps taken to deal with any such issues, and (iii) to assess the independent auditor’s independence, all relationships between the independent auditor and LP.
- In connection with such review, the Committee shall evaluate the independent auditor’s qualifications, performance and independence. This evaluation should include the review and evaluation of the lead audit partner of the independent auditor and take into account the opinions of management and the internal auditors. The Committee shall determine that the independent auditor has a process in place to assure the rotation of the lead audit partner and shall consider whether there should be regular rotation of the independent audit firm, itself, to assure continuing independent auditor independence. The Committee shall present its conclusions with respect to the independent auditor to the Board.
- The Committee shall preapprove all audit and non-audit services provided by the independent auditor, including specific preapproval of internal control-related services. The Committee may delegate preapproval authority to a member of the Committee. The decisions of any Committee member to whom preapproval authority is delegated must be presented to the full Committee at its next scheduled meeting.
- The Committee shall review with the independent auditor any audit problems or difficulties encountered during the course of the audit work, including any restrictions on the scope of the independent auditor’s activities or access to requested information and any significant disagreement’s with management, and management’s response. Among the items the Committee shall review with the independent auditor are: (i) any accounting adjustments that were noted or proposed by the independent auditor but were “passed” (as immaterial or otherwise); (ii) any communications between the audit team and the independent audit firm’s national office with respect to auditing of accounting issues presented by the engagement; and (iii) any “management” or “internal control” letter issued, or proposed to be issued, by the independent auditor to LP. Such review shall also include discussion of the responsibilities, budget and staffing of LP’s internal audit function.
- The Committee shall set clear hiring policies for employees or former employees of the independent auditor.
- Internal Audit Oversight and Responsibilities
- The Committee shall review and approve the annual audit plan of LP’s Internal Audit Department and all major changes to the plan. The Committee shall review and discuss with the internal auditors the scope, progress and results of executing the internal audit plan. The Committee shall receive reports on the status of significant findings and recommendations, and management’s responses.
- The Committee shall review the charter, reporting relationship, activities, staffing, organizational structure and credentials of the Internal Audit Department.
- The Committee shall review and concur with the appointment, replacement, reassignment or dismissal of LP’s Internal Audit Director, who shall have direct access to the Committee.
- The Committee shall review the annual performance of LP’s internal audit function.
- Compliance Oversight and Responsibilities.
- The Committee shall meet separately, periodically, with LP management, with LP’s internal auditors, and with the independent auditor.
- The Committee shall review LP’s compliance and ethics programs, including legal and regulatory requirements, and review with management its periodic evaluation of the effectiveness of such programs.
- In the course of fulfilling its duties the Committee shall have the authority to engage independent counsel and other advisors as the Committee determines necessary to carry out its duties.
- LP must provide for appropriate funding, as determined by the Committee, in its capacity as a committee of the Board, for the payment of: (i) compensation to the independent auditor for preparing or issuing an audit report or performing other audit, review or attest services for LP; (ii) compensation to any advisors employed by the Committee; and (iii) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
- The Committee shall review, on an annual basis and at such other times as may be requested by the Board, completed and proposed transactions between LP and any current or former director or executive officer of LP, including transactions with family members or affiliated companies and organizations of such persons, for purposes of assisting the Board in its determinations of director independence and the identification of potential conflicts of interest.
- The Committee shall review and approve all related-party transactions required to be disclosed pursuant to Item 404 of Regulation S-K under the Securities Act of 1933, and discuss with management the business rationale for the transactions and whether appropriate disclosures have been made.
- The Committee shall establish procedures for the receipt, retention and treatment of complaints received by LP about accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by LP employees of concerns regarding questionable accounting or auditing matters.
- The Committee shall perform an evaluation of its performance at least annually to determine whether it is functioning effectively. The Committee also shall discuss with the independent auditor the accountants’ observations related to the effectiveness of the Committee.
- The Committee shall review and reassess this Charter at least annually and obtain the approval of the Board of Directors.
- Enterprise Risk Management Oversight and Responsibilities
- The Committee shall discuss policies with respect to risk assessment and risk management, including LP’s major financial risk exposures and the steps management has taken to monitor and control such exposures..
Dated: November 2, 2018
Kurt M. Landgraf Ozey K. Horton Jr. Stephen E. Macadam F. Nicholas Grasberger III
- Financial Expert
- Independent Director