Our Commitment to Good Governance

MESSAGE FROM SUSAN STREET WHALEY.

Susan Street Whaley

Susan Street Whaley
Chief Legal Officer and Secretary

 

At P&G, we serve nearly five billion people around the world with one of the strongest portfolios of trusted, quality, and leadership brands. How we serve the world’s consumers matters, and we have committed – publicly and within – to doing what is right and to being a good corporate citizen. A sustainably strong business depends on maintaining trust, and that requires adopting strong ethical and compliance standards and ensuring strong Board leadership and oversight. That is why Good Governance is the foundation for everything we do, including our ESG work — the base from which it all builds — rather than a separate focus area. From long experience, we know that a sustainably strong business depends on maintaining strong ethical, compliance and quality standards. It is equally true that for all our citizenship work to be credible and impactful, it must be firmly rooted in our Purpose, Values and Principles.

OUR COMMITMENT TO GOOD GOVERNANCE.

 

From experience, built over nearly 185 years, we know that a sustainably strong business depends on maintaining strong ethical, compliance and quality standards. It is equally true that for our ESG work to be credible and impactful, it must be firmly rooted in our Purpose, Values and Principles (PVPs). Most critical though, is that our PVPs and standards come to life, by forming the basis through which our employees do their work to improve consumers’ lives each and every day.
 

Board Structure & Composition

Highly engaged Board with strong gender and ethnic diversity, skills, and experience
Four Board Committees comprised of independent Directors
Annual assessment and determination of optimal Board leadership structure
Active and engaged Lead Director has significant role, strong autonomy, and meaningful governance duties
Executive sessions of the independent Directors at every regular meeting of the Board, without management present
Annual Board and Committee self-assessments, including one-on-one reviews with individual Directors to ensure thoughtful, candid feedback
Independent Director evaluation of Chairman and CEO and continuous Director feedback

Board Operations & Oversight

Full Board oversees the development and execution of the Company’s strategic plans
Committee core areas of focus include financial integrity and legal compliance (Audit), corporate governance (G&PR), compensation and succession planning (C&LD), and innovation strategy (I&T)
Annual Board discussion of key significant risks identified in the Company’s enterprise risk management process
Board oversight and ongoing engagement with senior executives on key ESG matters, including cybersecurity (Audit), organizational diversity and gender pay equity (C&LD), community impact, environmental sustainability, and responsible sourcing practices (G&PR), and sustainable innovation (I&T).
Directors participate in focused sessions on emerging topics
Directors have significant interaction with senior business leaders and access to other employees as desired
Directors have ability to hire outside experts and consultants and to conduct independent investigations

Shareholder Rights & Engagement

Proxy access for Director nominees, available to a shareholder, or group of up to 20 shareholders, holding 3% of the Company’s common stock for at least 3 years
All Directors elected annually
Simple majority voting standard for all uncontested Director elections
Shareholder right to call special meetings
Ongoing shareholder engagement
Shareholder ability to contact Directors

Governance Best Practices

Clawback policy permits the Company to recoup certain compensation payments in the event of a significant restatement of financial results for any reason
Insider Trading Policy prohibits Directors, senior executives, and other designated employees from engaging in any pledging, short sales, or hedging investments involving Company stock
CEO, senior executives, and Directors required to own shares or RSUs at multiples of their salaries or annual retainer
Retirement age and term limit for Directors
Ongoing Board assessment and refreshment led by the G&PR Committee
Policies consistent with the Investor Stewardship Group’s Corporate Governance Principles
Signatory to Commonsense Corporate Governance Principles 2.0
Board policy limits Director membership on other public company boards

SHAREHOLDER ENGAGEMENT.

 

We value our relationships with all our shareholders. Engagement builds mutual understanding and a basis for progress, and the input we receive from our shareholders impacts and informs our corporate practices. The Company’s top 100 institutional shareholders collectively own over 50% of the Company’s outstanding shares of common stock, and we generally focus our proactive outreach efforts on these shareholders. These engagements have included members of our senior management, investor relations team, and subject matter experts from the Company, as well as Directors. We also solicit off-cycle, follow-up engagements where we believe further discussion and feedback on our actions would be beneficial. Our team is available via Investor Relations or the Corporate Secretary’s Office (CSO).


Shareholder Engagement