Oxy promotes high ethical standards, institutional integrity and effective corporate governance in every facet of our enterprise.
A number of policies and systems are in place to help ensure that business practices throughout the company are consistently effective, responsive and highly principled.
- The comprehensive Code of Business Conduct governs all business activities of the company. It reaffirms our commitment to high standards of ethical conduct and embodies Oxy's business ethics, policies and procedures.
- A formal Human Rights Policy was adopted in 2004. The policy sets forth Oxy's commitment to promoting, within its sphere of activity and influence, those rights and freedoms universally recognized in international as well as national law.
- Corporate Governance Policies cover the structure and operation of the Board of Directors, including director education; performance criteria; and succession planning.
- Comprehensive Health, Environment and Safety Policies and Procedures address public and occupational health and safety, industrial hygiene, environmental protection, security and management of process risk and other HES risks. For international operations, HES performance standards incorporate provisions of the Human Rights Policy.
We promote positive engagement with stakeholders in the communities where Oxy operates. Stakeholder engagement covers a wide range of activities, from discussion of potential project impacts, to interaction with civic organizations to address concerns about the environment or human rights. Environmental and social impact assessments are important foundations for early engagement, and town meetings, surveys and consultations help us understand local issues and expectations. Consistent with our Human Rights Policy, these assessments and consultations are a standard requirement for Oxy's international operations.
Oxy's governing body is a 12-member Board of Directors, of whom 11 are independent directors. Occidental Chairman and Chief Executive Officer Dr. Ray R. Irani is the sole employee member. The Board of Directors regularly reviews Oxy's governance to ensure stringent internal controls and exemplary business practices.
The Board has a lead independent director and seven standing committees, five of which have entirely independent membership. These include the Audit Committee, which hires independent auditors to audit Oxy's consolidated financial statements, books, records and accounts; discusses the company's financial accounting and reporting principles and internal controls with auditors and management; and oversees the compliance program for the Code of Business Conduct.
The fully independent Corporate Governance, Nominating and Social Responsibility Committee is responsible for periodic review of Oxy's governance policies. This committee oversees the evaluation of the Board and management; reviews social responsibility policies, programs and practices; and, as part of that charge, oversees compliance with the Human Rights Policy.
Also composed entirely of independent directors are the Environmental, Health and Safety Committee, whose members review the HES performance of Oxy's operations, the results of internal compliance reviews and progress on remediation projects; the Executive Compensation and Human Resources Committee; and the Charitable Contributions Committee.
Stockholders, employees and others who wish to communicate with a director or a committee may do so by sending a letter or fax to his or her attention in care of Oxy's Corporate Secretary at the Los Angeles headquarters. In addition, avenues are available to stockholders who wish to submit proposals or introduce items of business at the Annual Meeting, or nominate individuals to serve on the Board of Directors.
As outlined in the Code of Business Conduct, Oxy employees may raise questions or concerns for consideration directly to their supervisors or management, or anonymously by calling the company's Compliance Line.
The Board's Executive Compensation and Human Resources Committee is the sole arbiter of the Chairman's compensation and also sets compensation for Oxy's senior executives. A strong emphasis on performance-based compensation is intended to encourage and reward actions by executives that drive long-term growth in stockholder value. Along with financial results, consideration is given to performance in such areas as governance and ethical conduct; health, environment and safety; and encouraging diversity. Oxy's proxy statement contains additional information on executive compensation.
Each non-employee director receives compensation in the form of an annual retainer and shares of restricted common stock – the latter to ensure that the directors' interests are aligned with those of the stockholders. Oxy does not provide option awards, nonequity incentive awards, deferred compensation or retirement plans for non-employee directors.
Nominated directors must meet several criteria in order to be considered for a seat on the Board. In addition, each independent director must meet independence criteria as defined by Oxy's Corporate Governance Policies. Qualities such as business experience, character, acumen and specialized knowledge or expertise that would be beneficial to the Board and Oxy are taken into consideration.
The Conflict of Interest Policy requires directors, officers and employees to avoid activities or business interests that could be construed as divergent from, or in competition with, Oxy's interests or the individuals' responsibilities at Oxy. Directors and executive officers must annually disclose any transactions between themselves or their immediate family members and the company.
The performance of individual directors, committees and the full Board of Directors is evaluated on the basis of established criteria. An annual assessment focuses on such factors as whether committees are functioning effectively and whether Board members represent the necessary diversity of skills, backgrounds and experience to meet the company's current needs.