Governance and risk management

Our Board of Directors oversees and provides guidance on the company’s strategy and planning. This includes opportunities and risks related to climate change and/or an energy transition. The effectiveness of our Board reflects the benefits from the diversity of strengths and experience of the individual directors, as well as their commitment and ability to work as a group in carrying out their responsibilities.  

The Board and its committees review:

• Long-term strategic plans.
• Stewardship of business performance.
• Litigation and other legal matters.
• Political and community policy and budget.
• Lobbying costs.
• Developments in sustainability and public policy.
• World energy supply and demand to 2050.
• Approach to help reduce GHG emissions in support of our emission-reduction plans and our net-zero ambition.

Directors engage with experts from inside and outside the company and apply their individual experience and perspective to oversee the company’s capital-allocation priorities, with a focus on growing shareholder value and playing a leading role in an energy transition. The independent lead director plays a key role in shareholder engagements and consults with the Chairman to develop Board meeting agendas.

The Board visits ExxonMobil sites regularly. These visits enable directors to observe firsthand and more effectively oversee safety, operating practices, environmental performance, technology, products, industry and corporate standards, and community engagement.

Our annual Proxy Statement contains more information about our Board, including guidelines for selection. 

Assessing climate - and other sustainability-related risks

The Board, collectively and through its Environment, Safety and Public Policy Committee, regularly engages with senior management on climate matters and a broad spectrum of interrelated risks. Informed by our Enterprise Risk Management Framework, this includes risks related to employee and community safety, health, environmental performance, and other topics related to our 14 Sustainability Focus Areas.

Our Enterprise Risk Management Framework

Our Enterprise Risk Management Framework provides a comprehensive and structured approach to identify, understand, prioritize, and manage ExxonMobil’s most important risks. It is designed to drive consistency across risk types and support monitoring key risks.

We assess climate change and energy transition risks across key risk areas of our Enterprise Risk Management Framework. This ensures a comprehensive and structured approach to managing potential impacts on our business.

Our approach to risk governance is multilayered and includes clearly defined roles and responsibilities for managing risks of different types, including responsibilities of risk owners, functional experts, and independent verifiers. Each type of risk is managed and supported by centralized organizations that fulfill these defined roles. 

Board engagements include briefings with internal and external subject-matter experts, which can cover elements of scientific and technical research, public policy positions, GHG emission-reduction performance, and new technology developments. 

As part of the business planning process, the Board reviews and discusses technology deployment within the business lines and research on new technology to further reduce GHG emissions from our operated assets. The Board approves company strategy and annual capital allocation and reviews assumptions and sensitivities in testing major projects and investments for resiliency across a range of potential outcomes.

Independent directors engage directly with shareholders to gather insights and share perspectives on issues of importance to the company, including discussions regarding the risks and opportunities related to climate change and/or an energy transition.

Each committee includes aspects of risk governance in its charter.

• The Environment, Safety and Public Policy Committee oversees risks associated with safety, security, health, and environmental performance including actions taken to address climate-related risks, lobbying activities and expenditures, and community engagement.
• The Finance Committee oversees risks associated with the company’s capital structure and capital allocation, including actions to enhance resiliency.
• The Audit Committee oversees the company’s overall enterprise risk management approach and structure, which is applied to risks related to climate change, among other business risks.
• The Nominating and Governance Committee oversees matters of corporate governance, including Board refreshment and education.
• The Compensation Committee reviews executive compensation, which is aligned with the long-term interests of shareholders and requires careful consideration of current and future risks, such as those related to climate change.

Integrating risk management into executive compensation 

The executive compensation program is uniquely designed to incentivize long-term, sustainable decision-making. Key design features include performance shares with very long vesting periods and compensation that is strongly tied to the company’s performance.

The program is aligned with our business model and long-term strategic objectives that are established to drive sustainable growth in shareholder value while positioning the company for long-term success in a lower-emission future. These objectives are interdependent, with long-term business success determined by delivery in each of the strategic objectives. 

Strategic objectives are integrated into the corporate plan, which is reviewed and finalized by the Board each year. Accomplishments versus plan goals and objectives inform the level of compensation. This approach helps ensure accountability at all levels in the organization.

Two of the four strategic objectives specifically integrate climate risk:

• Operations performance: Deliver industry-leading performance in safety, reliability, emissions-intensity reductions, and environmental performance.
• Energy transition: Lead industry in reducing GHG emissions in hard-to-decarbonize sectors. 

Financial and operating metrics tie to our strategic objectives and are assessed over near- and long-term time horizons. 

Details on the executive compensation program can be found in our annual Proxy Statement. 

Managing sustainability^₁

Our Management Committee provides ongoing oversight of our sustainability focus areas, including regular assessments of strategic risks, safeguards, and mitigation plans. 

The Management Committee consists of four members:

• Darren Woods – Chairman and Chief Executive Officer
• Neil Chapman – Senior Vice President
• Neil Hansen – Senior Vice President and Chief Financial Officer
• Jack Williams – Senior Vice President

Our Sustainability organization touches every part of ExxonMobil, making use of our scale, capabilities, and the synergies between our business lines. A member of the Exxon Mobil Corporation Management Committee provides functional guidance to the Sustainability Vice President. This role is responsible for driving our Protect Tomorrow. Today. guiding principle in our operations. This includes:

• Working with our Corporate Strategic Planning organization and the business lines to identify opportunities.
• Integrating opportunities into our plans and operations. 
• Stewarding sustainability topics with our Chairman and the Management Committee at least once per quarter. 

The Sustainability organization manages the environmental management system and sustainability focus areas. This centralized organization drives our sustainability efforts and initiatives, guides our value chains, and supports execution excellence across our sustainability focus areas. Experts within the team work with others across the company to seek out opportunities for continuous improvement. 

Physical risk: protection of assets, the community, and the environment

We have extensive experience operating in a wide range of challenging physical environments around the world. Sustainability focus areas are supported by management systems, including the Operations Integrity Management System (OIMS), which establishes expectations and protocols for identifying and mitigating environmental risks across business lines, facilities, and projects. See Integrating sustainability into what we do for more information.

Effective physical risk management requires the ongoing assessment and mitigation of potential impacts to our people, our assets, the community, and the environments in which we operate. Before pursuing a new development, we assess potential environmental, socioeconomic, and health impacts associated with construction and operations. As appropriate, we use data, advanced computer modeling, and insights gleaned from consultation with local communities. We also work with regulators to share information and seek necessary approvals. This process gives us a comprehensive understanding of possible impacts. We use these insights to implement measures to avoid, reduce, or remedy the risks or impacts mentioned above.

When we assess physical environmental risks, we evaluate the type and location of facilities and investments. As an example, changes in patterns of waves, wind, or ice floes can affect offshore facilities. Onshore facilities could be impacted by sea-level changes, storm surge, flooding, wind and seismic activity, or geo-technical considerations. We conduct environmental assessments before building and operating facilities to ensure that protective measures and procedures are in place.

Our team of scientists and engineers have expertise across a wide range of disciplines. Through their active participation in industry groups, they gain insight into industry best practices. Through their leadership, they advise and improve upon industry standards which are then adopted to enhance our own standards and procedures. 

We rely on our professional experience in tandem with industry standards to cover a range of uncertainties. These standards include the American Society of Civil Engineers (ASCE 7) Minimum Design Loads and Associated Criteria for Buildings and Other Structures for onshore facilities.² Industry standards for offshore facilities include the American Petroleum Institute (API) Recommended Practices RP-2 series³ and the International Standards Organization (ISO) 19900 series.⁴ After the construction of a facility, we manage facility integrity through periodic checks of key aspects of the structures.

Once facilities are in operation, we maintain plans for disaster preparedness, response, and business continuity. These plans are detailed, well-practiced, continuously improved, and are tailored to each facility to help us prepare for unplanned events, including extreme weather. We also conduct periodic emergency drills with the appropriate government agencies and community coalitions. This helps to improve readiness and minimize the impacts of an event. Strategic emergency support groups are established around the world to develop and practice emergency response strategies and assist field responders. Regardless of the size or complexity of any potential incident, all our facilities and business units have access to readily available trained responders and response teams.

FOOTNOTES:

1. Reflects organizational changes through Feb. 1, 2026.
2. American Society of Civil Engineers (ASCE 7) Minimum Design Loads and Associated Criteria for Buildings and Other Structures, https://doi.org/10.1061/9780784415788
3. American Petroleum Institute (API) Recommended Practices RP-2 series: https://www.api.org/-/media/files/oil-and-natural-gas/exploration/offshore/api-standards-for-safe-offshore-operations-brochure.pdf
4. International Standards Organization (ISO) 19900 series for offshore structures: https://www.iso.org/standard/69761.html