Board Purpose and Responsibilities
The Board of Directors (the “Board”) of Schlumberger Limited (“Schlumberger” or the “Company”) is elected by its stockholders to oversee stockholders’ and other stakeholders’ interest in the long-term health and the overall success of the Company and its financial strength. The Board, acting on the recommendation of its Nominating and Corporate Governance Committee, has adopted the following corporate governance guidelines (the “Guidelines”) to establish a common set of expectations to assist the Board and its Committees in performing their duties. These Guidelines should be interpreted in the context of all applicable laws and the Company’s Articles of Incorporation and By-Laws, as well as its other corporate governance documents. These Guidelines are intended to serve as a flexible framework within which the Board may conduct its business, and not as a set of legally binding obligations.
The Board’s primary responsibilities are to oversee and counsel the Company’s Chief Executive Officer (the “CEO”) and other members of the senior management team. Some of the Board’s precise responsibilities include:
- Reviewing the Company’s major financial objectives, critical strategies and long-term plans, including major allocations of capital, significant proposed business acquisitions and divestitures, operating performance, sustainability and stockholder returns.
- Overseeing the assessment of major risks facing the Company, determining the extent to which such risks are appropriate and, to the extent the Board deems it appropriate, evaluating options for their mitigation.
- Overseeing the processes for maintaining the integrity of the Company with regard to its financial statements, internal controls and public disclosures, and compliance with laws and ethics.
- Appointing, regularly evaluating the performance of, and approving the compensation of the CEO and other senior executives.
- Planning for succession of the CEO and other senior management positions.
- Engaging in succession planning of the Board and key leadership roles on the Board and its Committees.
- Nominating director candidates for election by stockholders to membership on the Board, based upon the recommendations of the Nominating and Governance Committee.
- Monitoring the effectiveness of the Company’s corporate governance practices and making changes as necessary or appropriate for the Company.
Board Size. The Company’s Articles of Incorporation provide that the number of directors shall be at least 5 and not more than 24. The Board periodically reviews the appropriate size of the Board, and fixes the size of the Board from time to time, subject to approval by stockholders.
Independence. At least a majority of the Board shall consist of directors whom the Board has determined to be independent. The Board shall determine independence on the basis of the Company’s own specific standards set forth in Attachment A to these Corporate Governance Guidelines, which are based on, and meet or exceed, the independence standards of the New York Stock Exchange; and other facts and circumstances that the Board considers relevant. The Board makes an affirmative determination regarding the independence of each director annually, based upon the recommendation of the Nominating and Governance Committee.
Annual Election of Directors. All directors shall stand for election each year at the Company’s annual general meeting of stockholders.
Majority Voting Standard. The Company has a majority vote standard for uncontested director elections and a plurality vote standard for contested director elections (i.e., the candidate for a director position receiving more votes than any other candidate for the same position is elected). In uncontested director elections, any director nominee who receives a greater number of votes cast against his or her election than in favor of his or her election shall submit an offer of resignation, and the Board will decide, through a process managed by the Nominating and Governance Committee and excluding the nominee in question, whether to accept the offer of resignation at its next regularly-scheduled meeting.
Board Leadership Structure; Chairman of the Board. The Board recognizes that one of its key responsibilities is to evaluate and determine an appropriate board leadership structure so as to ensure independent oversight of management. The Board believes that there is no single, generally accepted board leadership structure that is appropriate across all circumstances, and that the right structure may vary as circumstances change. As such, the Board’s independent directors consider the Board’s leadership structure at least annually, and may modify this structure from time to time to best address the Company’s unique circumstances and advance the best interests of all stockholders, as and when appropriate. The Board’s independent directors at various times have selected an independent member of the Board to serve as Chairman of the Board (the “Chairman”), and at other times have selected a Chairman who is not an independent director. Most recently, the independent members of the Board determined to separate the roles of Chairman and the CEO. However, the independent directors of the Board may, in their discretion, reassign those roles in the future if they deem such action appropriate.
Lead Independent Director. If the person elected Chairman is not an independent director, the Board’s independent directors will, upon the recommendation of the Nominating and Governance Committee, also elect an independent director to serve as Lead Independent Director for a term of at least one year. The Lead Independent Director will have the following leadership authority and responsibilities:
- Approve agendas for all Board meetings, in coordination with the Chairman;
- Approve meeting schedules to ensure that there is sufficient time for discussion of all agenda items, in coordination with the Chairman;
- Preside at all Board meetings at which the Chairman is not present, including executive sessions of the independent directors;
- Authority to call meetings of the Board in executive session;
- Provide feedback to the Chairman, as appropriate, from executive sessions of the Board;
- Facilitate discussions, both during and between Board meetings, among the independent directors on key issues;
- Assist the Board, the Nominating and Governance Committee and the officers of the Company in implementing and complying with the Board’s Corporate Governance Guidelines;
- Foster Board leadership on matters of governance where independence is required, and monitor and improve Board effectiveness;
- Serve as a non-exclusive liaison between the independent directors and the Chairman, in consultation with the other directors;
- Lead the independent directors’ discussions of succession planning and evaluation of the performance of the CEO;
- Be available for consultation and direct communication with stockholders; and
- Perform such additional duties and responsibilities as the Board or the independent directors may from time to time determine.
Term Limits. The Board believes that tenure diversity among directors is important. The Board also believes that experience as a Schlumberger director is valuable, especially in light of the size, complexity and international scope of the Company’s operations. Therefore, director tenure is a factor that the Board considers in electing nominees, but directors are not subject to term limits, except as may result upon reaching the ages described immediately below under “Retirement Policy.”
Retirement Policy. Non-executive directors are eligible to be nominated for re-election up to their 70th birthday, and executive directors are eligible to be nominated for re-election up to their 65th birthday. On the recommendation of the Nominating and Governance Committee, the Board may make case-by-case exceptions to this policy if it deems such exception to be in the best interests of the Company.
Other Board Directorships or Chairs of Committees. Directors should not serve on more than three other boards of public companies in addition to the Board, except that any director who is the chief executive officer of a publicly-traded company (including the CEO) should not serve on the board of directors of more than one publicly-traded company in addition to the Board. Members of the Audit Committee of the Board should not serve on more than two additional audit committees of other public companies. Notwithstanding the foregoing, directors may serve on the boards of other companies only to the extent that, in the judgment of the Board, such services do not detract from a director’s ability to devote the necessary time and attention to the Company. Non-executive directors must inform, and secure prior approval from, the Nominating and Governance Committee of (a) any listed company board to which they are being considered for nomination for election as director, and (b) any nomination to act as chair of another listed company’s board or board committee, or as lead independent director of another listed company. Excepting service on charitable organization boards and non-governmental organization boards, to avoid any potential conflict of interest, executive directors and other executive officers of the Company must obtain approval from the Nominating and Governance Committee before accepting a nomination for (i) election as director on any other company board, whether public or private, or (ii) selection as chair of any committee of a company board, whether public or private; provided however, that as relates to clauses (i) and (ii), no such consent is required for service by executive directors and other executive officers of the Company on boards of wholly-owned subsidiaries of the Company.
Change in Principal Occupation. Directors are required to submit an offer of their resignation from the Board to the Nominating and Governance Committee if they change their principal occupation or their employer. The Nominating and Governance Committee will inform the Board as to whether or not it recommends the acceptance of the offer of resignation. The CEO will resign from the Board when he or she retires from the Company; provided, however, upon the agreement of at least a majority of the Board, the CEO may continue to serve on the Board for a transition period to be determined by the Board following such retirement.
Committees. The Board has five standing committees (each, a “Committee”): the Audit Committee, the Compensation Committee, the Nominating and Governance Committee, the Finance Committee and the Science and Technology Committee. Each Committee will perform its duties as authorized by the Board in compliance with the By-Laws of the Company and the Committee’s charter.
Committee Composition. The Audit, Compensation, and Nominating and Governance Committees will consist solely of directors who, at the time they are appointed to the Committee, meet the independence requirements established by the Board and such other laws and regulations as appropriate. If any member of such committee ceases to qualify as independent, the Nominating and Governance Committee will consider a replacement for such member as soon as practicable.
Committee Charters. Each of the Committees shall have a written charter outlining its responsibilities. Each of the Audit, Compensation, and Nominating and Governance Committees will review their charters annually.
Committee Rotation. The Nominating and Governance Committee shall periodically review Committee rotation practices with the Board.
Committee Reports. All committees report regularly to the Board.
Director Selection; Qualifications; Orientation and Continuing Education
Selection. The full Board, acting on the recommendation of the Nominating and Governance Committee, will nominate a slate of director candidates for election at each annual general meeting of stockholders, and will elect directors to fill vacancies. The Nominating and Governance Committee also promotes Schlumberger’s diversity policy to ensure that qualified candidates reflecting gender, racial and ethnic, cultural and geographical diversity are considered as potential director nominees. To further this diversity policy, and as part of the search process for each new director, the Nominating and Governance Committee seeks out women and nationally/racially/ethnically diverse candidates to include in the pool of candidates from which director nominees are chosen, and directs any third-party search firm that it engages to include women and racially/ethnically diverse candidates in such pool as well.
Qualifications. The individual qualifications sought in potential director nominees identified by the Nominating and Governance Committee for consideration by the Board are set forth in that Committee’s charter. Candidates are selected for, among other things, their integrity and honesty, independence, leadership and the ability to exercise sound business judgment. Final approval of a candidate is determined by the full Board.
Orientation and Continuing Education. Each new director is given an introduction to the Board’s duties and practices, the responsibilities for each Committee to which he or she is assigned, as well as to Schlumberger, its businesses and operations, its financial strategies, its controls and compliance systems and its compensation and benefits plans, within six months of the annual general meeting of stockholders at which the director is elected to the Board. The Board participates in periodic reviews of the Company’s businesses, informal discussions with managers of Schlumberger business units and visits to key Schlumberger operating sites. The Board and its committees also receive periodic updates on evolving corporate governance standards and relevant best practices as appropriate.
Directors’ Time Commitment and Availability
Directors are expected to regularly attend Board meetings and meetings of the committees on which they serve, and to undertake any additional tasks assigned to them by the Board, as recommended by the Nominating and Governance Committee. They are expected to review all materials distributed to them in advance of the meetings, to periodically review materials posted on the Board website between meetings to keep them informed about the Company’s business and performance, and to spend the time necessary to prepare for meetings. Directors must be contactable by the Chairman and the Secretary on short notice and be available for special meetings of the Board or any committee when necessary.
Conflicts of Interest
Each director is expected to be familiar with and follow the Schlumberger BluePrint in Action — our Code of Conduct — and Conflict of Interest Policy. If an actual or potential conflict of interest develops, or a situation arises that might give the appearance of such a conflict, the director should immediately report the matter to the Secretary and to the Chair of the Nominating and Governance Committee. If a director has a personal, business or professional interest in a matter before the Board or any of its Committees, the director shall disclose the interest to the Board or such Committee, excuse himself or herself from discussions on the matter, and not vote on the matter.
The proceedings and deliberations of the Board and its Committees are strictly confidential. Each director must maintain the confidentiality of all proprietary, privileged or otherwise protected information about the Company and other entities that the director obtains in connection with his or her service as a director, except where the disclosure is required by law.
Board and Committee Access to Management and Independent Advisors
The Board and its Committees have full access to officers of Schlumberger, subject to reasonable efforts to avoid disruption to the Company’s business and operations, and are free to retain legal, financial and other advisors, as they deem necessary or appropriate in the carrying out of their duties. For purposes of preparing the agenda for Board and Committee meetings, the Chairman and Committee Chairs regularly solicit suggestions from the directors for presentations by executive officers and other senior managers at Board and Committee meetings. Any additional meetings or contacts that a director wishes to initiate may be arranged through the Chairman, the Secretary or any Committee chair.
Non-Executive Director Compensation
The Compensation Committee annually reviews the compensation of non-executive directors and will make recommendations to the full Board. Directors who are employees of Schlumberger do not receive compensation for serving on the Board or its Committees. The Compensation Committee considers various factors in determining the form and amount of non-executive director compensation before making its recommendation to the full Board, including alignment of incentives with the interests of the Company and its stockholders, the maintenance of the independence of a majority of members of the Board, consideration of the work load, time commitment and responsibilities involved in Board and Committee meeting participation, and comparison with the compensation practices of comparable companies.
Executive Sessions of the Non-Executive Directors
Executive sessions of the non-executive members of the Board are scheduled at every regular Board meeting, and as requested by any non-executive director. At least one executive session each year shall include sufficient time for review of the CEO’s objectives and performance evaluation.
The Board is responsible for oversight of succession planning of the CEO and other senior management positions. At least one executive session of the Board each year shall include review of the CEO’s recommendations as to Schlumberger executives who may be qualified at that time, or are being developed, to succeed the CEO in an emergency or upon his or her retirement. During periods of active succession planning, the non-executive directors shall carefully consider the CEO’s proposed approach to the decision and transition, as well as any other approach that they deem appropriate. In addition, at least annually, the Board reviews succession planning and management development for other senior management positions, including plans for ordinary course succession as well as for situations in which a senior executive unexpectedly becomes unable to perform the duties of his or her position.
The Board dedicates at least one Board meeting each year to focus on strategic planning. In addition, various elements of the strategy are discussed at every Board meeting. In order to assess performance against the strategic plan, the Board receives regularly updates on progress and execution, and provides guidance direction throughout the year.
Annual Performance Evaluation of the Board and Committees
The Nominating and Governance Committee oversees the conduct an annual self-evaluation by the directors of the Board’s performance, and the full Board discusses the results and considers ways to improve Board practices. Each Committee of the Board conducts an annual self-evaluation of its own performance, and the full Board discusses the results and considers ways to improve Committee practices. The Committee reviews these Corporate Governance Guidelines on the basis of that evaluation and discussion, as well as developments in law, listing standards, and governance best practices, and recommends any appropriate changes to the Board for its consideration.
Approved by the Board of Directors: October 15, 2020
As contemplated by the corporate governance listing standards of the New York Stock Exchange (the “NYSE”), the Board of Directors of Schlumberger Limited (the “Company”) has adopted these independence standards in order to assist it in making determinations of independence.
A. No Material Relationships with the Company. An “independent” director is a director whom the Board of Directors has determined, based upon the recommendation of the Nominating and Governance Committee, has no material relationship with Schlumberger or any of its consolidated subsidiaries (collectively, the “Company”), either directly, or as a partner, stockholder or officer of an organization that has a relationship with the Company.
B. Business Relationships. The NYSE has identified specific relationships that automatically preclude a director from being considered independent. Pursuant to the requirements of the NYSE, the Board will not consider a director “independent” if:
- The director is now, or within the last three years has been, employed with the Company.
- A member of the director’s immediate family is now, or within the last three years has been, an executive officer of the Company;
- The director has received, or has an immediate family member who has received, during any 12-month period within the last three years, more than $120,000 in direct compensation from the Company, other than Board and committee fees and pension or other forms of deferred compensation for prior service (provided that such compensation is not contingent in any way on continued service). Compensation received by an immediate family member for service as an employee (other than an executive officer) of the Company is not considered for purposes of this standard.
- (a) The director, or an immediate family member of the director, is a current partner of the Company’s internal auditor or independent auditor; (b) the director is a current employee of the Company’s internal auditor or independent auditor; (c) an immediate family member of the director is a current employee of the Company’s internal auditor or independent auditor who personally works on the Company’s audit; or (d) the director, or an immediate family member of the director, was within the last three years (but is no longer) a partner or employee of the Company’s internal auditor or independent auditor and personally worked on the Company’s audit within that time.
- The director, or an immediate family member of the director, is, or has been within the last three years, employed as an executive officer of another company where any of the Company’s present executive officers serves or served at the same time on that company’s compensation committee.
- The director is a current employee, or an immediate family member of the director is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount that, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of the other company’s consolidated gross revenues.
C. Charitable Relationships. Additionally, the Board will not consider a director “independent” if the director is an executive officer of a non-profit organization that has received charitable contributions from the Company in an amount that, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of the organization’s consolidated gross revenues.
An “immediate family member” includes a director’s spouse, parents, children, siblings, mother-and father-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone (other than a domestic employee) who shares the director’s home.