board of directors, governance and ethics
Chevron holds its workforce to the highest standards of honesty and integrity and encourages employees to report questionable conduct. We believe in being transparent with and responsive to our stakeholders at all times and we strive to comply with the letter and the spirit of all applicable laws when conducting company business. Chevron’s Board of Directors, which oversees all of the company’s business and affairs, is committed to strong corporate governance structures and practices that help the company continue to achieve business results – the right way.
what we’re doing
board of directors
Chevron is governed by a Board of Directors and committees of the Board that meet throughout the year. The Board has four standing committees, each composed solely of independent Directors: Audit; Board Nominating and Governance; Management Compensation; and Public Policy. Directors fulfill their responsibilities through Board and committee meetings and also through other communications with management. The Board monitors overall corporate performance, the integrity of Chevron’s financial controls, and the effectiveness of its legal and political compliance and public policy and social programs, and it oversees the management and succession of key executives and Chevron’s strategic and business planning process.
Chevron faces a broad array of risks, including market, operational, strategic, legal, political and financial. To determine if appropriate risk management systems are employed throughout the Company, the Board and its committees oversee Chevron’s risk management policies and practices. The Public Policy Committee assists the Board in fulfilling its oversight of risks that may arise in connection with the social, political, environmental, human rights and public policy aspects of Chevron’s business and the communities in which it operates. The committee discusses risk management in the context of, among other things, legislative and regulatory initiatives, safety and environmental stewardship, community relations, government and nongovernmental organization relations, and Chevron’s reputation. The committee reports its discussions to the full Board for consideration and action when appropriate.
To learn more about the role of Chevron’s Board and Board committees, please see our 2016 Proxy Statement.
For Chevron, good corporate governance means having structures and processes in place to make sure that the company’s decisions and actions are in the best interests of our stockholders. It also means being transparent with and responsive to our stockholders. Through our Investor Relations and Corporate Governance departments, we engage directly with many of our stockholders in meetings to discuss operational, financial, governance, executive compensation, environmental, safety, social and policy issues, and we engage with all of them through reports, press releases and the Company’s website. Stockholders can direct inquiries to the Board of Directors and submit proposals for inclusion in our Proxy Statement.
We understand that effective corporate governance, including an independent Board for which all Directors stand for election every year, is critical to our long-term success. Nine of our 10 Directors are non-employees and independent, as defined by the NYSE Corporate Governance Standards; the independent Directors annually elect a Chairman and an independent Lead Director. Over the past 10 years, stockholders have elected 10 new independent Directors. Chevron’s Restated Certificate of Incorporation and By-Laws do not contain supermajority vote provisions, and stockholders have the right to call for special meetings and recommend Director candidates to the Board. In addition, we have a policy to obtain stockholder approval of any stockholder rights plan. More information can be found at Chevron Corporate Governance.
Chevron takes the conduct of its employees seriously and requires questionable conduct to be reported. This may include, for example, violations of company policy or of the Chevron Business Conduct and Ethics Code. One reporting method available to the entire workforce is the Chevron Hotline, which is operated offsite by Global Compliance Services (AlertLine®), an independent agent. In addition, our Global Office of Ombuds provides a safe, confidential environment outside formal reporting channels to resolve workplace concerns. Employees may contact an Ombudsman at any time, regardless of the stage of the concern or severity of the issue.
Our Chevron Business Conduct and Ethics Code has information about the avenues by which employees can report misconduct and a description of how we administer oversight of our compliance program.
Chevron has a right and a responsibility to its stockholders to advocate positions on proposed policies that will affect the company’s ability to meet the growing demand for energy. We lobby ethically, constructively and in a nonpartisan manner through direct communication with public officials. We also encourage our employees, retirees and others to communicate with officials as permitted by law. We comply with all registration and reporting regulations related to our lobbying activities.
Chevron engages the administration of U.S. President Barack Obama and the U.S. Congress to provide perspectives on energy and other significant policy issues affecting the United States and the world. The goal is to contribute to economic prosperity through sound policy.
Chevron has strict policies and internal approval processes that comply with the letter and spirit of all applicable laws governing political contributions. Global corporate contributions in 2015 were approximately $9.5 million to support candidates and political organizations that foster economic development, free enterprise and good governance. Totals include contributions to support our views on local and state ballot measures. Chevron employees, through the Chevron Employees Political Action Committee (CEPAC), contributed $528,000 in 2015 to the election of candidates from both parties for U.S. federal office, as well as to local and state candidates in certain U.S. jurisdictions. By policy, CEPAC does not contribute to presidential candidates or national political parties.
More than half of the world’s population lives in countries rich in crude oil, natural gas and minerals. These resource-rich countries have the ability to generate revenues to facilitate their own economic development and reduce poverty. Chevron believes that the transparent and accurate accounting of revenues received by governments and payments made by extractive-industry companies to governments contributes to stable, long-term investment climates, economic growth and the well-being of communities.
Our commitment to promoting revenue transparency is reflected in our participation as a stakeholder in the voluntary, multinational, government-led Extractive Industries Transparency Initiative (EITI), of which Chevron is the longest continually serving member on the international board. More than 50 countries are now undertaking EITI’s external validation process to ensure they are implementing the program according to agreed-upon standards. Chevron currently operates or has nonoperated working interests in 17 EITI-implementing countries: Azerbaijan, Colombia, Democratic Republic of Congo, Ghana, Indonesia, Iraq, Kazakhstan, Liberia, Myanmar, Nigeria, Norway, the Philippines, Republic of Congo, Sierra Leone, Trinidad and Tobago, the United Kingdom, and the United States.
In addition to our voluntary engagement with EITI, transparency-related legislation is being enacted in the European Union, Norway, Canada and the United States. These regulations require companies in the extractive industries to publish information on the payments made to host governments for upstream exploration and production activities. Chevron respects and complies with all applicable laws and regulations wherever we operate. In 2016, we will begin disclosing required payments made to the government of the United Kingdom, which recently transposed the European Union Accounting Directive into national law.
We believe that the EITI’s multistakeholder approach, which ensures the full representation of governments, extractive-industry companies, civil society and the public, is the best approach for providing transparency between company payments and government revenues in resource-rich countries.
We will continue to work constructively with other stakeholders involved in revenue transparency initiatives that strive to provide citizens of resource-rich countries with information they can use to reduce corruption and improve governance.