The Clorox Company’s Commitment to Strong Corporate Governance
Strong corporate governance is foundational to all that we do. It helps maintain trust in our company and brands, enabling us to create long-term shareholder value.
This strong governance begins at the top. Our board of directors applies their strong, diverse and relevant skills to provide meaningful oversight of the company and its execution of the IGNITE strategy, demonstrating active engagement with the issues most important to investors.
Our governance practices extend to transparency in our disclosures, robust board risk management oversight mechanisms, board oversight of human capital matters and corporate culture, as well as a commitment to hearing perspectives from our varied stakeholders. The following are some examples of strong governance practices at Clorox:
- Regular board refreshment, with average tenure of approximately five years. We seek diverse skills, backgrounds and experiences that support the company’s strategy, which also results in a diverse board mix of both longer-tenured and newer directors.
- Strong shareholder-friendly practices, including the right for shareholders to nominate candidates and the right to call a special meeting, assuming certain ownership thresholds and other qualifications are met.
- Consideration of stakeholder feedback, with subsequent enhancements to our governance processes, including public disclosure in alignment with stakeholder-preferred reporting frameworks, incorporation of a third-party facilitator into our board evaluation process, and creation and expansion of our ESG Data Hub, the central repository for key information about our ESG performance and reporting approach.
- Active board oversight of human capital and culture matters, including through engagements with employees via site visits and town halls; oversight of engagement survey results and follow-up actions; and regular updates on ESG activities in town halls, community events and companywide communications.
- Annual mandatory training for Clorox teammates on our Clorox Code of Conduct, which outlines our expectations in areas.
Our New ESG Governance & Structure
In fiscal 2023, we created a new internal ESG governance structure and hired our first full-time vice president and head of sustainability to lead ESG work. The governance structure starts at the top with oversight from our board and senior management team. Our ESG Executive Committee determines strategic considerations to ensure we continue our ESG leadership, while the ESG Steering Team, led by our head of sustainability, drives sustainability initiatives, including reporting and executing against our ambitious IGNITE ESG goals. An ESG Disclosure Committee also reviews key ESG reporting, as well as processes, data controls and systems to assist the company in providing transparent and accurate disclosures and satisfying regulatory reporting requirements.
Our ESG governance structure and related processes include a system of mechanisms to further integrate our IGNITE ESG goals into our business units, allocate resources and assign decision-making authority and accountability. This enables us to better set ESG targets and measure performance. The structure also helps identify and mitigate risks associated with ESG issues such as resource dependency, resource scarcity and physical business disruption.
Additional fiscal year 2023 highlights include:
- Published our Climate Action Plan this fiscal year, disclosing progress against our science-based targets for scope 3 emissions (categories 1 and 11) in our annual report, and disclosing all scope 3 categories relevant to our business, on our ESG Data Hub.
- In anticipation of new disclosure regulations, we continued to strengthen our ESG data controls for priority metrics by implementing a formal ESG certification process, strengthening standard operating procedures and enhancing formal review checklists.
- Enhancing protocols and processes for data privacy and security to reduce risk and maintain consumers’ trust.
Even as the external environment is constantly evolving, we’re committed to continuously evaluating our approach to governance as we drive toward our IGNITE goals and strive to achieve our integrated ESG ambitions.
