The Board of Directors’ mission is to represent the owners’ interest in the long-term health and the overall success of the business and its financial strength. GM is governed by a Board of Directors and committees of the Board that meet throughout the year. The Board is elected by shareholders to oversee and provide guidance on GM’s business and affairs and is the ultimate decision-making body of the company, except for those matters specifically reserved to shareholders. It is highly engaged in developing GM’s strategic plan and overseeing execution of that plan. The Board is committed to sound corporate governance structures and policies that enable GM to operate its business responsibly and with integrity, and to position GM to compete more effectively, sustain its success and build long-term shareholder value.
The Board is comprised of 11 members, all but one of whom—Chairman & CEO Mary Barra—are independent, as defined by the Board’s Corporate Governance Guidelines, which reflect the independence standards of the New York Stock Exchange and the U.S. Securities and Exchange Commission.
The Board has the flexibility to decide its optimal leadership structure, specifically when the positions of Chairman and CEO should be combined or separated and whether an executive or independent director should be Chairman. This allows the Board to choose the most appropriate leadership structure for the company to best serve the interests of our shareholders at any particular time. Currently, the Board is led by our Chairman & CEO, Mary Barra, whose role as Board Chairman is complemented by that of our Independent Lead Director, Tim Solso. The Board believes that Ms. Barra’s in-depth knowledge of GM’s business and understanding of day-to-day operations brings focused leadership to our Board and reinforces accountability for the company’s performance. Our Corporate Governance Guidelines, available on our website, gm.com/investors/corporate-governance.html, specify the duties of the Lead Director and independent directors.
The Board has the following standing Committees: Audit; Cybersecurity; Executive; Executive Compensation; Finance; Governance and Corporate Responsibility; and Risk.
The Board has adopted governance structures and policies that it believes promote Board independence and the interests of shareholders. These structures and policies include, among others:
The Board has a shareholder engagement strategy. During 2017, members of the Board, including our Independent Lead Director, met in person with shareholders representing approximately 25 percent of our outstanding shares. Additionally, members of management met in person or telephonically with more than 75 shareholders (representing more than 45 percent of outstanding shares) on various matters. The constructive insights, experiences and ideas exchanged during these engagements allow the Board and management to further evaluate and assess key initiatives from different perspectives and viewpoints. GM is a signatory to the Commonsense Principles of Corporate Governance, which can be found at www.governanceprinciples.org.
GM's Board and senior leadership team are committed to overseeing the company’s integration of ESG principles throughout the enterprise.
The Board is committed to overseeing the company’s integration of environmental, social and governance (ESG) principles throughout the enterprise. This oversight includes an annual sustainability review by the Board and regular review of ESG issues by the Board’s Governance and Corporate Responsibility Committee at each scheduled meeting. GM is fortunate that several of its Board members have extensive business experience in managing ESG- and climate-related issues, such as transitioning from high- to low-carbon-emitting technologies or managing environmental impacts within the supply chain. The Board is committed to elevating GM’s leadership profile and reputation among investors, policymakers and others on ESG issues and practices and believes GM has a unique opportunity to address these important issues.
In 2017, the Board modified GM’s Short-Term Incentive Plan to incorporate an individual performance component, which, for certain positions, includes sustainability measures. Please see GM’s 2018 Proxy Statement for further discussion of individual performance results that had a positive impact to ESG measures. Linking total compensation to the achievement of these individual measures will increase focus on efficiency and performance across the business for our sustainability initiatives.
The Board has the overall responsibility for risk oversight, with a focus on the most significant risks facing the company. While GM does not follow the precautionary approach, it does have a comprehensive risk management place in plan. Effective risk management is the responsibility of the CEO and other members of management, including the Senior Leadership Team. Our Board implements its risk oversight function both as a whole and through delegation to Board Committees, particularly the Risk Committee. Each of the Board Committees is responsible for oversight of risk management practices for categories of risks relevant to its functions. Our Board recognizes that cybersecurity is critical to GM’s operations—particularly as management continues to execute on its future mobility strategies, such as self-driving vehicles and connected-vehicle technology. In 2017, our Board established a new Cybersecurity Committee to enhance its oversight of these cyber risks. The Board believes that its structure for risk oversight provides for open communication between management and the Board and its Committee.
All standing committees other than the Executive Committee are composed entirely of independent directors. Each committee has a written charter setting forth its purpose, authority and duties. The committees enhance the Board’s oversight of areas that are critical to GM’s corporate responsibility and sustainability efforts, including: transparent and reliable financial reporting, risk identification and mitigation, ethics, vehicle and workplace safety, pay-for-performance, diversity, Board and management succession planning, shareholder proposals and nominations, corporate responsibility and political spending issues.
The foundation of GM’s business is our vision—seeing a world with zero crashes, zero emissions and zero congestion; our core values—customers, excellence and relationships; and our seven core behaviors—Think Customer, Innovate Now, Look Ahead, One Team, Be Bold, It’s on Me, and Win With Integrity. They drive our business decisions and activities worldwide and are our road map for sustainability.
An ethical business starts at the top. Chairman & CEO Mary Barra and other members of our senior leadership team regularly issue messages to all employees emphasizing the importance of our Code of Conduct and their desire that every employee strive to do the right thing. Our Board of Directors is also committed to upholding the highest legal and ethical conduct in fulfilling its responsibilities. All Board members, officers and employees are expected to act ethically at all times and to adhere to the law, our Code of Conduct and our policies. Our Board also completes GM’s Code of Conduct training.
From the top down, every GM employee is important to maintaining our ethical standards. We encourage our employees to win with integrity, and to act in a way that makes GM a company for which we are proud to work. GM’s Code of Conduct reinforces our commitment to a work environment founded on mutual respect, trust and accountability, and outlines the policies and obligations that guide our business conduct.
GM’s Code applies to everyone in our company, at every level, including employees, supervisors, Board members and subsidiaries GM controls. We expect our third parties, including suppliers, to act in a way that is consistent with the principles and values outlined in our GM Supplier Code of Conduct when conducting business with, and on behalf of, GM. We expect employees working with our third parties to hold them accountable.
On an annual basis, all salaried employees are required to review the Code of Conduct and certify that they agree to comply with the policies contained in the Code, and that they have reported any violations of the Code or vehicle or workplace safety issues. In 2017, GM achieved a 100 percent completion rate among salaried employees for its Code of Conduct Certification Program.
Additionally, all salaried employees, regardless of role or location, are required to disclose actual and potential conflicts of interest as part of the certification process. Board members who are not employees provide written disclosure of any actual or potential conflicts of interest at least once a year.
To ensure compliance awareness continues throughout the year, our global ethics and compliance communications team develops and communicates compliance messages on a regular basis, underscoring the importance of various compliance topics.
Our Code of Conduct governs how our employees are expected to act: displaying integrity in the workplace, in the marketplace and in their communities when representing GM. It directs all employees to be good stewards of the environment as embodied in our Environmental Principles, which guide the conduct of our daily business practices worldwide.
The Code of Conduct also outlines what is considered misconduct, including what constitutes misuse of company property, discrimination, harassment, conflicts of interest, unethical behavior or misuse of information or computer systems. It provides guidance about what may constitute unfair competition or insider trading and guidance on export compliance, privacy, anticorruption and interactions with government officials.
To ensure the effectiveness of our Code of Conduct, we periodically use independent firms to evaluate our compliance program. We also have regional compliance officers and compliance personnel in each GM business unit region to provide guidance and to answer ethics and compliance questions. In addition, our Code clearly publicizes in multiple places a list of contact points, which include human resources, security and audit staff, to answer employee questions. We maintain a robust hotline for reporting misconduct and safety issues and have a strict nonretaliation policy.