The Board has the following standing Committees: Audit; Cybersecurity and Risk; Executive; Executive Compensation; Finance; and Governance and Corporate Responsibility. 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:
In 2016, the Board adopted a director-shareholder engagement policy. Since the beginning of 2019, members of the Board, including our Independent Lead Director, have met in person with shareholders representing approximately 21 percent of shares outstanding. Additionally, members of management frequently met in person or telephonically with shareholders 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.
The Board is committed to overseeing the company’s integration of environmental, social and governance (ESG) principles throughout the enterprise. The oversight includes frequent ESG strategic discussions by the Board's Governance and Corporate Responsibility Committee. 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.
GM’s Short-Term Incentive Plan incorporates an individual performance component, which, for certain positions, includes sustainability measures. Please see GM’s 2019 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 plan in place. 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 Cybersecurity and 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. The Board believes that its structure for risk oversight provides for open communication between management and the Board and its Committees.
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 and lobbying expenditures.
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, relationships and truth; 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.
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. It applies to everyone in our company, at every level, including employees, supervisors, Board members and subsidiaries that GM controls. We expect 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.
Every year, all eligible salaried employees are required to review the Code of Conduct and complete the Code of Conduct Training. At the end of the training, they are required to certify that they agree to comply with the policies contained in the Code, and that they have reported any violations of the Code and any vehicle or workplace safety issues. In 2018, GM achieved a 100 percent completion rate among eligible 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. Employees are encouraged to report any potential concerns of misconduct first to their manager. If they are uncomfortable going to their manager, they may contact their local leadership, HR or Labor representative, the Global Ethics and Compliance Center, or Legal Staff. In cases where an individual is uncomfortable reporting through established internal channels, reports can be made using our toll-free GM Awareline hotline. The Awareline is operated by an independent third party and allows employees and others to report concerns of misconduct by the company, its management, supervisors, employees or agents. Reports can be made in over a dozen languages 24 hours per day, 7 days per week, by phone, web or email. Reports may be made anonymously, where permitted by law; however, employees are encouraged to identify themselves for more efficient follow-up.
Until November 27, 2018, reports made to the Awareline were classified into one of two categories. Category 1 reports involved misconduct, including, among other things, allegations of fraud, information loss, harassment, retaliation, theft or discrimination. Category 2 reports were generally comprised of employee/workplace issues, including customer-service complaints, employee-benefits issues and human resource-related grievances. In 2018, GM received 3,569 reports to the Awareline, and approximately 19 percent were classified Category 1. After November 27, 2018, we transitioned to a new case management system, and no longer use the Category 1/Category 2 distinctions.
For potential vehicle safety issues, a special Speak Up For Safety hotline was established in May 2014. Up until September 2018, GM employees and contract workers were also able to communicate with the independent Monitor assigned to GM anonymously, as permitted by law, or otherwise at any time. The Monitor maintained an independent toll-free phone number for reporting any alleged violation of law or unethical conduct, as well as a globally available online web form. The Monitor’s role supplemented, but did not replace, existing established global employee reporting tools, such as GM Awareline and Speak Up For Safety. The DPA was successfully concluded on September 17, 2018, and the Monitor hotline was disconnected.
Speak Up!, GM’s Non-Retaliation Policy, is intended to protect GM employees from retaliation as a result of raising concerns in good faith. Industry benchmarking data shows that the majority of misconduct reports are made to an employee’s manager. To help our own GM managers in such circumstances and to provide additional guidance regarding GM’s Non-Retaliation Policy, the GECC and Global Security teams developed a tool kit on how to address workplace retaliation, and also added non-retaliation scenarios to the live “What Would You Do?” course available to managers.
To ensure the effectiveness of our Code of Conduct, we periodically use independent firms to evaluate our compliance program. GM is currently in the process of implementing several of the recommendations provided. We also have regional compliance officers and other compliance personnel located throughout GM who provide guidance to employees and answer ethics and compliance questions. In addition, our Code clearly publicizes in multiple places a list of contact points, which include human resources, security, legal and audit staff, to answer employee questions.