Form and Square the Frames
Form the frames, joining the corners with butt joints — that is, joints formed by butting two pieces together and securing them, thus eliminating the need for mitering. Drill pilot holes in each corner and insert galvanized screws.
Note: It's usually a good idea to drill pilot holes anytime you're working near the edge of the wood (Image 1). This eliminates the need to worry about inserting the screw too near the edge and splitting the wood.
Square up the frame throughout this process, either with a framing square or by this handy shortcut: make sure the pegboard is cut perfectly square, then use it to line up the frame (Image 2). Doing this makes the job of squaring much faster and more accurate.