Leadership and
Key Governance Systems
Board of Directors
CPChem has a robust governance and risk management approach to oversee risks, including those related to our sustainability focus areas. Our Board comprises eight representatives: three voting representatives appointed on behalf of each of Chevron U.S.A. Inc. and of Phillips 66 Company, and the Chief Executive Officer and Chief Financial Officer of CPChem as nonvoting representatives. Representatives from the Board and members of our Executive Leadership Team serve on various committees, providing strategic oversight of the implementation and stewardship of CPChem’s sustainability strategy, utilizing information both from internal analysis and external subject matter experts (SMEs).
Our Executive Leadership Team is comprised of accomplished individuals with extensive experience and proven talents, working together to guide the company toward a more successful and sustainable future. CPChem’s Sustainability Executive Steering Team (EST) meets regularly to advance its expertise, make progress on sustainability initiatives and review the external policy landscape.
Sustainability Executive Steering Team (EST)
With decades of collective industry experience, the EST is an informed and practical council, well-equipped to address sustainability issues material to our business.
Reporting to the EST, two executive-led Guidance Review Teams (GRTs) and a Policy Guidance Committee provide direction and oversight on a variety of strategically important sustainability issues. Our GRTs provide a multi-disciplinary view to manage and align sustainability activities with the rest of the operational, commercial and functional priorities. Specialized implementation teams provide deliberate support to GRT actions and priorities.
Key Governance Elements
Through the Benefits Committee, Compensation Committee and Investment Committee, CPChem leverages feedback from employee surveys and focus groups to inform decisions related to benefits and to generate recruitment and retention action plans for its diverse workforce.
The Board Operational Excellence Committee monitors and responds to global trends in the regulatory and political space and supports work to address risks with potential to affect environmental, health, safety and security (EHSS) or related manufacturing facility programs and policies.
Enterprise Risk Management (ERM) is a core process through which the Board and company leadership identify market, operational and reputational risks to CPChem and secure appropriate mitigation options. An ERM committee provides in-depth assessments and an annual review of CPChem’s ERM process with the Board.
Crewed by company leadership, the EHSS Policy Committee provides oversight and governance for EHSS activities and CPChem’s Operational Excellence (OE) System. OE helps CPChem standardize its efforts globally, increase collective rates of improvement, and raise operational discipline in areas of environment, health, safety, security, reliability and quality.
CPChem’s Executive Diversity Council provides leadership, guidance and direction to our Diversity, Equity and Inclusion journey. A comprehensive talent management governance structure is in place to ensure that CPChem has the organizational capabilities required to meet current and future business needs, and that talent management strategies are achieved. The Talent Management Council (TMC) governs talent decisions for executive-level employees and each business unit, manufacturing facility and region has a Talent Stewardship Committee (TSC). The TMC and TSCs evaluate employee performance management, development opportunities, career tracks, potential for new roles and succession planning. CPChem encourages employees to engage in regular discussions of development and career goals with supervisors and TSCs.
The Board is responsible for exercising reasonable oversight with respect to CPChem’s Ethics & Compliance (E&C program) and for being knowledgeable about its content and operation. The Board Audit Committee (BAC) has been empowered by the Board to, among other things, monitor the status and effectiveness of the E&C Program. Quarterly reports are provided by CPChem’s Ethics & Compliance Office (E&C Office) to the BAC detailing E&C Program initiatives, reports, investigations, and other pertinent information.
Ethics and Compliance
Our E&C program applies to all stakeholders, from our Board of Directors to front-line supervisors and individual contributors. It is managed by the E&C Office, which is part of the CPChem legal department and reports directly to the CEO. The E&C Office also monitors company-wide compliance with the Code of Conduct. Day-to-day implementation of the Program is managed by appropriate SMEs throughout the organization including EHSS, finance, global trade, human resources, information technology, legal and public affairs. Stakeholder feedback and concerns may be anonymously reported through a third-party phone service.
100% Completion of Ethics Training in 2023
Employees are required to complete CPChem’s Code of Conduct training and attest compliance annually. The Code of Conduct reflects how we operate as a global business and in 2023, 100% of employees completed Code of Conduct training, which covered the following topics:
- Antiboycott
- Anticorruption
- Conflict of Interest
- Drugs & Alcohol
- Employment Practices
- Environmental, Health, Safety & Security
- Fair Competition
- Global Trade
- Information Governance
- Information Technology
- Insider Trading
- Intellectual Property
- Internal Controls & Fraud
- Political Activities
- Privacy of Information
CPChem takes reasonable steps to ensure that certain third parties performing work on its behalf conduct their business in a manner consistent with CPChem’s expectations on ethics and compliance.
The Third-Party Management Program provides a process and guidelines for the engagement, retention, and monitoring of third parties identified through a risk assessment.
Managing Risk
Biennial risk assessments are conducted across the company to identify issues that may potentially impact compliance with relevant internal policies, regulations and laws. Once a risk issue is identified, mitigation steps may include updates to company policies, training, communications, audits and more. 100% of CPChem wholly owned or operated facilities were assessed in 2022 and no significant risks were identified.
CPChem is vigilant in protecting its assets and employs several programs to prevent security risks.
Performing information security risk assessments, audits of control procedures, incident response and records retention best practices are examples of steps taken to prevent breaches in security.
CPChem seeks to consistently evaluate and manage legislative, regulatory, policy and political activities, address potential business impacts and generate value by:
- Building and supporting relationships with external stakeholders, including governments and communities where CPChem operates
- Managing potential risks and mitigating impacts when necessary
- Developing and implementing issue management and stakeholder engagement plans, systematically tracking engagements, issues and effectiveness
