Report Dec. 15, 2022
ExxonMobil’s Board of Directors oversees the corporation’s management, including its risk management. It also reviews long-term strategic plans, selects and reviews the performance of the chief executive officer (CEO), reviews development and succession plans for top executives, as well as a number of other functions.
Report Dec. 15, 2022
The Board is comprised of independent directors and the CEO. All members of the Audit; Nominating and Governance; Compensation; and Environment, Safety and Public Policy committees are independent. Individual directors leverage their experience and knowledge in Board and committee deliberations and Board decisions reflect the collective wisdom of the group.
The Board added five new independent directors in 2021. These new directors add to the Board’s existing skillsets and expertise by providing additional experience in energy, business transition and capital allocation. Each new director participated in comprehensive onboarding sessions; these sessions included the company’s history, culture, practices, risk framework, legal and regulatory requirements, and ethics as well as other policies. Additional information regarding director qualifications can be found on page 18 of ExxonMobil’s 2022 Proxy Statement.
An independent lead director is selected by and from the independent directors. The lead director is expected to serve for a minimum of two years. To enhance Board governance, ExxonMobil’s independent lead director’s board authorities were enhanced in 2020 and include leading the annual performance evaluation of the Board and its committees.
The lead director also chairs the Nominating and Governance Committee, with authorities that include establishing the criteria for director engagement with shareholders, overseeing independent director succession planning and establishing and maintaining procedures for interested parties to communicate with non-employee directors. Additionally, the lead director works together with the Compensation Committee to oversee the annual evaluation of the CEO, the communication of resulting feedback to the CEO and the review of CEO succession plans. The Board believes shareholder interests are best served through a leadership model combining the roles of Chairman of the Board and chief executive officer.
At year-end 2021, 11 of ExxonMobil’s 12 directors were independent as defined by New York Stock Exchange guidelines. In 2021, the Board met 13 times. This is a greater frequency of meetings than other Standard & Poor’s 500 company boards, which met on average approximately 9 times in 2021 and approximately 8 times in 2020 per the 2021 Spencer Stuart Board Index. ExxonMobil’s incumbent directors, on average, attended approximately 97% of Board and committee meetings in 2021.
ExxonMobil recognizes that the strength and effectiveness of the Board reflects the diversity of strengths and experience the individual directors; their commitment and the ability of directors to work effectively as a group in carrying out their responsibilities. The Nominating and Governance Committee leads the Board refreshment process, which incorporates the perspectives of external experts and shareholders. Qualifications sought for director nominees are documented in the Board’s Guidelines for the Selection of Non-Employee Directors.
The Board considers director longevity of service and experience to be of great value and it also recognizes the importance of director refreshment. The average tenure of our non-employee directors at year-end 2021 was 3.8 years, which was well below the 2021 average of S&P 500 companies of 7.7 years.i The Nominating and Governance Committee looks for highly qualified, non-employee candidates with demonstrated leadership, competency, and a commitment to represent the interests of our shareholders. An independent executive search firm helps identify external candidates for consideration. The qualifications the Nominating and Governance Committee considers for director candidates include:
- Prominence in their fields.
- A diversity of experiences and backgrounds, including gender and race/ethnic diversity.
- Experience and demonstrated expertise in managing large, relatively complex organizations, such as that of CEOs of a significant company or organization with global responsibilities.
- Financial and other risk management expertise.
- Experience in government, regulatory or public policy.
- Experience on one or more boards of significant public or nonprofit organizations.
- Expertise resulting from significant academic, scientific or research activities.
- Experience in the energy industry or with cyclical businesses, such as commodities.
The Nominating and Governance Committee considers recommendations from shareholders and Board directors to help ensure the selection process is collaborative. At year-end 2021, 42% of the Board’s directors were female and/or racially/ethnically diverse.
The Nominating and Governance Committee, chaired by the independent lead director, recommends committee assignments to the full Board. These recommendations consider the tenure, skills and experiences of each director and the collective group.
Our sustainability governance framework helps enable the long-term viability of our business, maintains a culture of ethical behavior and supports the sustainable development of the communities where we operate.
Board engagement on sustainability topics
The Board of Directors provides oversight of key enterprise risks to ExxonMobil’s business. Throughout the year, the Board participates in reviews with management on the company’s business, including identified enterprise risks.
As a whole, the Board reviews:
- Long-term strategic plans.
- Stewardship of business performance.
- Litigation and other legal matters.
- Political contributions, budget and policy.
- Lobbying costs.
- Developments in climate science and policy.
- World energy supply and demand to 2050.
- Approach to help reduce greenhouse gas emissions in support of a net zero future.
The Board engages with both internal and external experts on issues of importance to the company. These reviews cover a range of topics, including climate change, research and development efforts, operating strategies, business and corporate planning, technology, current events, shareholder engagements, and company performance. More detailed information is available in the company’s Outlook for Energy, Advancing Climate Solutions report and this Sustainability Report, among other publications.
The independent lead director’s responsibilities include engaging with shareholders, as appropriate, including on environment, social and governance (ESG) topics. The Board’s Environment, Safety and Public Policy Committee oversees operational risks associated with safety, security, health and environmental performance including actions taken to address climate-related risks, lobbying activities and expenditures, and community engagement.
The Board, including the Environment, Safety and Public Policy Committee, visits an ExxonMobil site regularly. These visits enable directors to observe and provide input on safety, operating practices, environmental performance, technology, products, industry and corporate standards and community engagement.
More information on the ExxonMobil Board of Directors can be found here.
The ExxonMobil Management Committee provides ongoing oversight of sustainability with the business lines and functions, including regular assessments of strategic risks, safeguards and mitigation plans. Each year, the business lines coordinate with ExxonMobil’s Global Operations and Sustainability organization to present sustainability-related goals, plans and progress.
The Management Committee consists of four members:
- Darren Woods – Chairman and Chief Executive Officer
- Neil Chapman – Senior Vice President
- Kathryn Mikells – Senior Vice President and Chief Financial Officer
- Jack Williams – Senior Vice President
The Global Operations and Sustainability Vice President collaborates with Corporate Strategic Planning and the business lines to develop sustainability-related goals and supports the integration of those goals into operating plans. Stewardship of sustainability-related activities to the Chairman and Management Committee occurs quarterly. Within Global Operations and Sustainability, the Sustainability Director manages the focus areas and subject matter experts are responsible for identifying opportunities.
Climate governanceWe have a robust governance framework designed to oversee risks and opportunities associated with our business. This enables our Board and management to effectively exercise oversight responsibilities.
Governance Report • Dec. 15, 2022
Ethics and integrityWe strive to always uphold high ethical standards and in all aspects of our business.
Governance Report • Dec. 15, 2022
Engaging with shareholdersExxonMobil is focused on creating long-term value while seeking to meet the world’s growing energy needs. Responsible engagement provides an effective forum to discuss issues and share relevant information, facts and viewpoints.
Governance Report • Dec. 15, 2022
How we assess and manage our operations, from initial planning to decommissioning and rehabilitation.