audit committee charter
The purpose of the Audit Committee (the "Committee") of the Board of Directors of Chevron Corporation (the “Corporation”) is:
- To assist the Board of Directors in discharging its oversight responsibility relating to: (a) the accounting and financial reporting processes of the Corporation and its subsidiaries, including the audits of the Corporation’s financial statements and the integrity of the financial statements, and (b) the qualifications, performance and independence of the independent auditor who is retained to audit the financial statements;
- To assist the Board of Directors in fulfilling its oversight responsibility with respect to the Corporation's maintenance of an effective Internal Audit function;
- To assist the Board of Directors in fulfilling its oversight responsibility with respect to the Corporation's compliance with the requirements of the Securities Exchange Act of 1934 regarding accurate books and records;
- To assist the Board of Directors in fulfilling its oversight responsibility with respect to financial risk exposures as part of the Corporation's broad enterprise risk management program;
- To assist the Board of Directors in fulfilling its oversight responsibility with respect to the Corporation's fair dissemination of accurate information in compliance with securities laws;
- To prepare the report required by the rules of the Securities and Exchange Commission (“SEC”) to be included in the Corporation's proxy statement for the annual meeting of stockholders;
- To assist the Board of Directors in fulfilling its oversight responsibility with respect to the implementation and effectiveness of the Corporation's compliance program; and
- To perform such other duties and responsibilities enumerated in and consistent with this Charter.
The Committee’s function is one of oversight, recognizing that the Corporation’s management is responsible for preparing the Corporation’s financial statements, and the independent auditor is responsible for auditing those statements. In adopting this Charter, the Board of Directors acknowledges that the Committee members are not employees of the Corporation and are not providing any expert or special assurance as to the Corporation’s financial statements or any professional certification as to the independent auditor’s work or auditing standards. Each member of the Committee shall be entitled to rely on the integrity of those persons and organizations within and outside the Corporation that provide information to the Committee and the accuracy and completeness of the financial and other information provided to the Committee by such persons or organizations absent actual knowledge to the contrary.
membership and procedures
membership and appointment
The Committee shall comprise not fewer than three members of the Board of Directors, as shall be determined from time to time by the Board of Directors based on recommendations, if any, from the Board Nominating and Governance Committee.
The members of the Committee shall be appointed by the Board of Directors upon the recommendation of the Board Nominating and Governance Committee.
The entire Committee or any individual Committee member may be removed from office without cause by the affirmative vote of a majority of the Board of Directors. Any Committee member may resign effective upon giving oral or written notice to the Chairman of the Board of Directors, the Corporate Secretary or the Board of Directors (unless the notice specifies a later time for the effectiveness of such resignation). If the resignation of a Committee member is effective at a future time, the Board of Directors may elect a successor to take office when the resignation becomes effective.
A chairperson of the Committee (the “Chairperson”) may be designated by the Board of Directors based upon recommendations by the Board Nominating and Governance Committee, if any. In the absence of such designation, the members of the Committee may designate the Chairperson by majority vote of the full Committee membership. The Chairperson shall determine the agenda for meetings and shall have unlimited access to management and information. The Chairperson shall establish such other rules as may from time to time be necessary and proper for the conduct of the business of the Committee.
The Committee shall meet at least quarterly, either in person or telephonically, and at such times and places as the Chairperson determines. The Committee shall meet in executive session without the presence of management of the Corporation, as appropriate. The Committee shall report regularly to the full Board of Directors with respect to its activities.
The Committee may appoint a Secretary whose duties and responsibilities shall be to keep full and complete records of the proceedings of the Committee and perform all other duties as may from time to time be assigned to him or her by the Committee, or otherwise at the direction of a Committee member. The Secretary need not be a Director.
independence and other qualifications
Each member shall meet the New York Stock Exchange (“NYSE”) standards of “independence” for Directors and audit committee members, as determined by the Board of Directors. Each member of the Committee shall also be financially literate, as determined by the Board of Directors.
At least one member of the Committee shall be an “audit committee financial expert” as such term may be defined from time to time by the SEC and as determined by the Board of Directors.
The Committee may, by resolution passed by a majority of the Committee, designate one or more subcommittees, each subcommittee to consist of one or more members of the Committee. Any such subcommittee to the extent provided in the resolutions of the Committee, and to the extent not limited by applicable law or listing standard, shall have and may exercise all the powers and authority of the Committee. Each subcommittee shall have such name as may be determined from time to time by resolution adopted by the Committee. Each subcommittee shall keep regular minutes of its meetings and report the same to the Committee or the Board of Directors when required.
authority to retain advisers
The Committee shall have the authority to retain and terminate independent counsel and other advisers as it determines necessary to carry out the Committee’s duties. The Committee shall receive appropriate funding from the Corporation, as determined by the Committee, for payment of compensation to any such advisers and for the payment of ordinary administrative expenses that are necessary or appropriate in carrying out the Committee’s duties.
evaluation; charter review
The Committee shall undertake an annual evaluation assessing its performance, which evaluation shall be reported to the Board of Directors. The Committee shall periodically evaluate the adequacy of this Charter and recommend changes to the Board Nominating and Governance Committee for approval by the Board of Directors.
duties and responsibilities
The following shall be the common recurring duties and responsibilities of the Committee in carrying out its oversight functions. These duties and responsibilities are set forth below as a guide to the Committee with the understanding that the Committee may alter or supplement them as appropriate under the circumstances to the extent permitted by applicable law or listing standard.
with respect to the independent auditor:
- Annually, the Committee shall select and employ the Corporation’s independent auditor, subject to stockholder ratification of the selection, if such ratification is required or sought. The Committee shall fulfill the oversight responsibility of the Board of Directors with respect to the independent auditor’s audit of the books and accounts of the Corporation and its subsidiaries for the fiscal year for which it is appointed.
- The Committee, or a subcommittee to which the Committee shall have delegated its authority for this purpose, shall approve the provision of all audit and nonaudit services by the independent auditor to the Corporation and its subsidiaries, including the fees associated therewith, in advance of the provision of those services.
- In connection with the Committee’s approval of non-audit services, the Committee shall consider whether the independent auditor’s performance of any non-audit services is compatible with the independent auditor’s independence.
- At least annually, the Committee shall obtain and review a report by the independent auditor describing:
- the independent auditor’s internal quality control procedures;
- any material issues raised by the most recent internal quality control review or peer review of the independent auditor, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the independent auditor, and the steps taken to deal with those issues; and
- all relationships between the independent auditor and the Corporation that may reasonably be thought to bear on the independent auditor’s independence, in order to discuss with the independent auditor the potential effects of any such relationships on independence and assess the independent auditor’s independence.
with respect to the corporation’s financial statements:
with respect to periodic reviews and reports:
with respect to other matters:
- the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters; and
- the confidential, anonymous submission by the Corporation’s employees of concerns regarding accounting, internal accounting controls or auditing matters.
with respect to the internal audit function:
This Charter and any provision contained herein may be amended or repealed by the Board of Directors.
Approved: Board of Directors
Date: January 27, 2021