The Chevron Way and Corporate Responsibility
The vision, values and strategies described in The Chevron Way serve as the foundation for how we conduct our business. They provide a common understanding of who we are, what we believe, what we plan to achieve and how we plan to achieve it — for our employees and for all who interact with us.
Our definition of corporate responsibility is rooted in consistently applying the core values set out in The Chevron Way. Across our global enterprise, we believe in maximizing the positive impact of our operations on current and future generations. We integrate social, environmental and economic considerations into our core practices and decision making, which includes engaging and balancing the needs of stakeholders. These corporate responsibility expectations support us in achieving our business goals.
Responsible and Ethical Conduct
Our management systems, processes and policies, which include our Corporate Governance Guidelines, Business Conduct and Ethics Code and Operational Excellence Management System, are aligned with The Chevron Way and are fundamental to our commitment to operate in a responsible and ethical manner everywhere we work.
Corporate Governance
Chevron is committed to sound principles of corporate governance. These are primarily reflected in our Certificate of Incorporation, bylaws and Corporate Governance Guidelines. We actively monitor governance trends and revise our own governance practices as appropriate. For example, in 2007 we:
- Eliminated the supermajority vote provisions in our Certificate of Incorporation.
- Amended our bylaws to require that in an uncontested election, a director must receive more "for" than "against" votes or must submit an offer of resignation to the board.
- Amended our bylaws to require that the board chairman be elected annually by the board.
- Amended our corporate governance principles to clarify the role and responsibilities of the lead independent director.
We have shown our commitment to good governance in other ways as well. Five new directors have been added since 2004. All of our directors stand for election each year. A majority of our directors are independent. All board committees are composed of nonemployee directors and committee chairpersons, and assignments are rotated frequently. A lead independent director is selected annually to chair executive sessions. The board will reconsider any stockholder proposal not supported by the board that receives a majority of votes cast at the annual meeting. Stockholders can recommend director candidates for consideration by the board.
Business Ethics
Chevron conducts business in accordance with the highest ethical standards and in compliance with the letter and spirit of applicable laws in countries where we operate. Our Business Conduct and Ethics Code (BC&E Code) communicates to our employees the values that guide our actions and decision making worldwide.
Employees are required to read and acknowledge that they will abide by the BC&E Code, which is available in 12 languages. The code is reviewed, updated and redeployed periodically. It will be updated in 2008 and will include Chevron’s Human Rights Statement.
All employees are required to report any questionable conduct to management, legal counsel, Human Resources, Global Security, Internal Audit or to the Chevron Hotline. Reports of questionable conduct may involve, for instance, violations of the law, the BC&E Code or company policies.
The Chevron Hotline is operated offsite by Global Compliance Services (AlertLine®), an independent agent. Employees and contractors can access the hotline 24 hours a day by the Internet, multilingual phone line or letter. All hotline reports are received and reviewed by the corporation's chief compliance officer, chief corporate counsel and the corporation’s hotline program coordinator. If appropriate, these matters are elevated to the Audit Committee of the Board of Directors. Submissions to the hotline can be made anonymously. Chevron does not tolerate any form of retaliation for reports made in good faith to the hotline.
In 2007, AlertLine® received 445 calls, compared with 262 calls in 2006 and 275 in 2005. During 2007, we conducted a hotline employee-awareness campaign and took steps to improve ease of use and access to the hotline companywide. The largest percentage of calls pertained to three classifications:
- People management issues – 56%
- Financial and internal controls – 15%
- Internet/mail incidents – 12%
Internet/mail incidents refers to fraudulent proposals from non-Chevron representatives made to individuals, businesses and organizations.
Oversight of the compliance program is a companywide effort that extends from business units to the Board of Directors. The board's Audit Committee, which is supported by the Corporate Compliance Policy Committee composed of senior executives, governs our companywide compliance program. Each reporting unit has its own compliance or audit committee to manage the responsibilities specific to that organization. The board's Audit Committee reviews the company’s internal auditing practices and is responsible for corporate compliance oversight.
Operational Excellence
Our commitment to operational excellence (OE) is embodied in The Chevron Way value of protecting people and the environment. We define OE as the systematic management of safety, health, the environment, reliability and efficiency. OE objectives are integrated at all levels of our global enterprise by our Operational Excellence Management System (OEMS).
To advance OE objectives globally, an Operational Excellence Governance Board endorses policy, processes and standards supported by the Health, Environment and Safety Steering Committee and the Reliability Steering Committee. Corporate OE reviews assess both the design and effectiveness of processes in meeting OE requirements. We continue to build OE capability: by the end of 2007, more than 13,000 Chevron employees had completed OE training for leaders, and 9,330 had achieved OE certification.
We will continue to place a priority on implementing our OE processes across our business over the next several years.