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Our Governance Structure

Baker Hughes, a GE company (BHGE) is governed by, among other things, a Stockholders Agreement between BHGE and GE implemented on July 3, 2017, as further amended, that incorporates significant minority stockholder protections. The BHGE Board of Directors and executive management team recognize that the long-term interests of shareholders are advanced by responsibly addressing the concerns of other stakeholders and interested parties, including employees, customers, suppliers, government officials, communities where we do business and the public at large.

Our board believes that commitment to best practices in corporate governance and adherence to the highest standards of integrity are essential to maximize shareholder value. Our bylaws, board committee charters, governance principles, code of conduct, detailed fully in The Spirit and the Letter, and other policies approved by our board serve as the principles of conduct by which we govern our business affairs to benefit the long-term interests of our shareholders and others.

Our board is led by Lorenzo Simonelli, who serves as our chairman, president and CEO. Our Governance Principles require the election, by the independent directors, of a lead director who leads meetings of the independent directors and regularly meets with the chairman. Our lead director, W. Geoffrey Beattie, has a clear set of comprehensive duties that provide an effective check on management. The BHGE Board has determined that this board leadership structure provides an effective balance between management focus on strategic execution and participation in the board process.

Board Snapshot

We believe that a diverse board that reflects a mix of gender, ethnicity, background, country of citizenship and experience, leads to greater board effectiveness. Our board is active and engaged, and supports a culture of open dialogue, collaboration and rigorous decision-making focused on creating long-term shareholder value.

The Governance and Nominating Committee evaluates board composition annually and identifies skills, experience and capabilities desirable for new directors in light of our business and strategy. As part of ongoing refreshment efforts, the BHGE Board has prioritized the recruitment of new directors who can further contribute to the diversity of our board and bring expertise in the areas of our corporate responsibility priorities.

Board Level Oversight

Consideration of economic, social and environmental risks and opportunities are a vital part of the BHGE Board’s strategic oversight function.

Primary oversight for corporate responsibility positions and governance matters has been delegated to the Governance and Nominating Committee, which reviews BHGE’s actions around its corporate responsibility strategy and related impacts on shareholders, employees and communities. In the early months following BHGE’s formation, the Governance and Nominating Committee reviewed plans for BHGE’s corporate responsibility framework that elevated the transparency of the company’s corporate responsibility policies, practices and performance. Our corporate responsibility framework was published in the weeks following BHGE’s one-year anniversary. The Governance and Nominating Committee receives regular updates to ensure progress continues. Our board’s other committees oversee priorities within their subject matter.

Our culture of responsibility is pervasive throughout the company. Accordingly, cross-functional leadership is involved in managing our priorities, setting goals, monitoring our progress and communicating results to the relevant board committees and other stakeholders, including through issuance of our 2019 Corporate Responsibility Report.


Corporate Responsibility Role of the BHGE Board and Committees

Board of Directors

Strategic Oversight

updown

audit

Audit
Committee

oversees enterprise risk management, global ethics and compliance, including The Spirit and the Letter

compensation

Compensation
Committee

oversees executive compensation, management succession planning, talent management and culture (including diversity & inclusion)

governance

Governance and
Nominating Committee

oversees corporate social responsibilities and public issues, HSE, and governance structure and practices

conflicts

Conflicts
Committee

oversees related party transactions with GE

For additional roles and responsibilities of the BHGE Board and its committees, see our 2019 proxy statement.

Risk Assessment

As part of our Enterprise Risk Management (ERM) Program, we annually seek input from every segment of our business to help us identify and prioritize the myriad risks, including operational, financial, strategic and reputational risks that may affect our business. Information collected from this global outreach is facilitated and consolidated by a third party and, together with our ERM Steering Committee, risks are categorized and rated based on probability and severity, with consideration given to current or proposed mitigation measures. Key risks and related mitigation actions are further analyzed by our executive leadership team. Risks related to our People, Planet and Principles framework, including HSE, compliance, talent management, and corporate governance, as applicable, are assessed and evaluated as part of this ERM review process.

Our Audit Committee is tasked with oversight of our risk management program and discusses the key risks on an annual basis at its committee meetings. In addition, each committee of the BHGE Board is responsible for the oversight of certain areas of risk that pertain to that committee’s area of focus and receives regular updates at committee meetings throughout the year from management on each risk.

Aligning Compensation Practices with our Priorities

We are committed to a pay for performance philosophy, and we design our compensation programs to support our long-term strategy and to align the interests of our executives and our shareholders. Our executive compensation framework focuses our leaders on the achievement of certain financial goals and progress against strategic imperatives. 

Our incentive-based compensation plans balance financial metrics with quantitative and qualitative performance goals. The performance metrics approved by the Compensation Committee focuses our team on safety, execution, technology innovation, leadership, and shareholder returns. Our People, Planet and Principles priorities are key criteria within our annual bonus program, demonstrating the BHGE Board’s commitment to our sustainability framework. By assessing and rewarding executive performance against these goals, which include HSE and diversity and inclusion metrics, we further promote a culture that supports our priorities.

A more detailed discussion of our executive compensation program is available in our 2019 proxy statement.

Contacting the Board

To provide our shareholders and other interested parties with a direct and open line of communication to the BHGE Board, shareholders may communicate with any member of the Board, including our lead director, the chair of any committee or with the non-management directors of the company as a group, by sending such written communication to our Corporate Secretary, c/o Baker Hughes, a GE company, 17021 Aldine Westfield Road, Houston, Texas, 77073, USA.

Engaging with stakeholders

As leaders in the diverse energy environments where we operate globally, we know our success requires a network of partners and relationships built on trust, integrity and consistent collaboration. We consider input from multiple points of view to prioritize and report on issues and opportunities that matter most to the sustainability of our business.


PEOPLE

Diversity & inclusion, employee resource networks, company culture, board refreshment, supply chain diversity and management, recruitment and retention, compensation and benefits, training and development, workforce health and well-being, community engagement


PLANET

Climate change, risk management, emissions reduction, unintended releases, technology innovation and R&D, resource consumption, waste management


PRINCIPLES

HSE training and management; safety and injury prevention; quality, integrity and compliance; human rights, ethics and code of conduct

 

GLOBAL INDUSTRY LEADERS

BHGE has hosted an annual event for 20 consecutive years as a forum for BHGE leadership and commercial teams to engage in open dialogue with key customers, non-governmental organizations and others about important industry issues. In 2018, more than 1,000 senior executives, industry influencers and environmental experts convened during a two-day event to discuss opportunities to take energy forward through a range of innovations, collaborative partnerships and shared commitments.