Governance structure of organization

The report is prepared for critically analyzing the strategic approach of company by emphasizing on different identified themes. These themes include reputation management, corporate governance, corporate social responsibility and ethics and boardroom organization. The selected organization for the purpose of analysis is Conoco Philips which is the largest independent multinational energy corporation based on proved and production reserves.

It carries out operations in seventeen countries while being committed to effective and efficient production and exploration of oil and natural gas. The organisation has long history of proud and long history of producing and finding oil and gas (conocophillips.com 2018). Report is prepared for demonstrating the similarities and differences between several themes and illustrations of proactive and reactive measures taken by company. In addition to this, governance structure of company and potential ways of mitigating the behavioral challenges has been explained.

Discussion:

Governance structure of organisation:

            Conoco Philips has effective and clear governance structure concerning sustainable development which extends from executive leadership and board of directors to the field of operations. The structure of corporate governance is supported by approach of management system with standards, policies and practices for assessment of social and environmental risks. The corporate governance structure of Conoco Philips comprised of four board committees, board of directors and team of executive leadership.

For addressing the key sustainability issues such as stakeholder engagement, overall implementation, climatic change, human rights, water and bio diversity, organization has champion of executive leadership team (conocophillips.com 2018). The safety, health and environment leadership team and sustainable development leadership team reviews the goal setting, strategic planning, implementation performance and reporting. Leaders of stakeholder engagement comprise of operational leader and senior functional team across the business. Conoco Philips has a sustainable and environmental development steering committee of internal experts by advising on key sustainability issues (Dinkpa 2016).  

Organisational structure

            The positions on issues of public policy such as climatic change and matters impacting the reputation of company as responsible corporate citizen including reporting and sustainable development performance is overseen by the public policy committee of board of directors. Compliance with the practices and programs of company along with safety, health and protection of environment including water, climatic change and bio diversity management is monitored by committee along with making recommendations to the board (Bonica 2016).

            The committee comprise of independent directors that is comprehensively updated on annual basis that is updated on performance of sustainable development and convenes at least quarterly. Regarding to the key aspects to the sustainability approach, there is a four executive leadership team members that advices, provides direction and leadership to the progress (Stewart and James 2017).

            Sustainable development leadership team comprise of functional leaders and top global business that provide approval and consultation for the areas of sustainable development, priorities, action plan, goals and results. The vice president of global health, safety and environment sits on Sustainable development leadership team.

            The team of health, safety and environment comprise of functional and business managers across the company. For sharing earnings and reviewing performance, a standing monthly meeting is held by the team and the team is responsible for implementing companywide initiatives.  Health, safety and environment leadership team is advised by sustainable and environment development steering committee on matters such as technology and key environmental issues.

Organizational structure

            Sustainable development team- A framework is provided by the sustainable development group of company for sustainability implementation, regular engagement with executive and business leadership and reporting in sustainable development. Such framework provides long range of strategy and corporate planning. The group is also responsible for reporting in sustainable development, addressing the risk and opportunities of company, performance, commitments and external management. Directors within the corporate teams are responsible for dealing with key sustainability topics such as supply chain sustainability, water, biodiversity, climatic change, modeling, risk management and life cycle analysis, social responsibility and stakeholder engagement (Breul and Diez 2018).

The success and implementation of governance relies on active engagement by subject matters, practitioners and leaders throughout the organization. Conoco engages with the structure of network excellence, discussion forums and issue working groups and public policy issue working groups for the purpose of capacity building and alignment. It is well understood by organization that for many issues, the alignment between positions of public policy advocacy and sustainable development positions is important. In order to ensure alignment between these two elements, public policy and sustainability development leaders participate in cross cutting issue working groups.

Similarities and differences between the identified themes and those expected in other industries:

            Corporate governance- The principles and practices of corporate governance deals with the identification of responsibilities and distribution rights among several participants in the corporation such as creditors, shareholder, regulators, auditors and board of directors. The structure of corporate governance in an organization is established for providing a framework that helps in ensuring accurate and timely disclosure of material matters enhancing accountability to stakeholders and maintaining high standards of integrity business ethics.

            Reputation management- Reputation management is about controlling and influencing the reputation of group by taking appropriate steps for ensuring that the general consensus aligns with the goals of organization. Reputation management in oil and gas industry has considerable impact on the future business relations and financial indicator of company.

            Corporate social responsibility and ethics- Corporate social responsibility refers to the requirement of business to be a good corporate citizen by going beyond the laws in contributing to social welfare and protecting the environment.

Boardroom organization- The dynamics of boardroom refers to interplay between three aspects of governance that is culture, governance structure and behaviors. Culture of governance deals with the power structure of boardroom. Structure of governance deals with the context of power structure of boardroom. Governance behavior is the third governance dynamics in the boardroom.

            The integrity and reputation of Conoco Philips is dependent on each officer, employee, director and all individual working on maintenance of personal responsibility for personal business conduct. Reputation of Conoco as good corporate citizen is protected and enhanced by making contribution at local levels to meet the unique needs of community. Efforts of organization in fiscal year 2017 ranged from safeguarding flyways of threatened crane species to building a community basketball along with supporting the efforts concerning recovery after mudslides in Colombia. Furthermore, strategic community investment is made by company that helps in measurably and meaningfully addresses the vital issues at global and local level. Charitable investment strategy of organization is built around three pillars of employee programs, signature programs and local contributions that are informed by integrated planning.

Similarities and differences between the identified themes and those expected in other industries

            The themes relating to strategic approach of industry other than oil and gas industry might be related to factors that intends to improve the performance of organization apart from being corporate socially responsible. In service industry, the strategic objectives of organization are to work in partnership with stakeholders and service users for planning, indentifying, evaluating and delivering services. For future development and continuance of sustainable services, organization takes strategic steps to secure funding. The food retail business such as Tesco which is the champion of customer in terms of both value and brand has a successful format balancing elements such as operating model, customer proposition and real estate strategy.

            Strategy and governance is implemented in retail organization helps in determining the risk appetite of company. The risk is about the amount and type which an organization is willing to undertake for meeting their strategic objectives. Strategy also deals with leveraging existing relationship in terms of protecting information and exploring ways of adopting the best practices together. Poor marketing is considered as the major cause of declining margin and low growth in almost every industry such as airlines, telecommunication, finance and consumer products (Di Giuli and Kostovetsk 2014).

            Marketing activities of organizations operating in such industries tightly align their corporate strategy with their marketing activities. According to standard metrics, marketing activities of organization seems to be performing well such as boosting repeat share, making repeat purchase, building market share. Marketing activities in such organizations exist far from boardroom and executive suite. Managers are rarely held accountable for how the marketing activities support corporate strategy and return on investment is generated or not.

            Reputation management becomes more and more important in industry such as aviation as it emphasize the need to strengthen the communication capabilities of industry. One of the important aspects of reputation management is strengthening the communication capabilities that would help in ensuring customer loyalty and brand recognition. Reputation of all members of industry and imminent issues of the sector is managed by the enhanced communication. The corporate reputation of companies operating in telecommunication industry helps in proving competitive edge for ensuring survival in highly competitive environment and continued growth (Herremans and Nazari 2016). This comes with the implication to the operators of telecommunications for increasing their customer base and gaining customer interest towards organization.

Examples of proactive and reactive measures used by company:

            Work at Conoco Philips is conducted in a safe and environmentally responsible manner by preventing occurring of illness, occupational illness and all injuries. Performance of human is a way how equipment, people, culture and work process interacts as a system. Organization has specific focus on proactively reducing human error outcome by recognizing the error likely situation, improving interaction between critical and individual system and controls and application of tools to reduce the error likelihood. In addition to this, for ensuring that safety defenses are in place, a proactive multi discipline approach is adopted for working with key rail contractors who participate in kick off meeting (Geels 2014).

            The areas of weak signals are identified with the help of data analytics that helps in enhancing proactive approach rather than reactive approach to work planning. Some cornerstones that are used by organization to become highly reliable are intentional focus on mindful change, deliberate execution and maintaining chronic unease element. Conoco Philips is considered as leakiest resulting from its emission and due to its large presence in San Jaun basin. Such basin has the distinction of being the leakiest methane field in United States. Most of the emission in basin is from venting of methane to the atmosphere during a cleaning process known as liquid unloading.

The reduced emission completion, plunger gifts, low bleed controllers and other technologies would help in curbing of emission of methane. However, there is no uniform adoption of these measures by company. It is reported that Conoco completed reduction of emission in only 29% of wells of natural gas of United States (Mohamad et al. 2018). The low bleed devices of company are replaced by high bleed pneumatic devices. Proactive steps have been taken by company over the last few years that help in reduction of emission companywide. The programs of protecting the species deal with proactively facilitating the farmers and rancher to stabilize selected species population (Hiatt et al. 2015).

            Organization is taking efforts to continue to execute proactive management of risk of climatic change, opportunities and impacts. The incentive programs of company are aligned with the long term strategy and long term interest of stockholders for ensuring that appropriate metrics are in place. Emergency management capabilities of Conoco Philips manages the event using a process of comprehensive management that helps in management of proactive phase of consequence management along with making immediate reactive responses of an oil spill. It also intends to manage subsequent recovery of operations through the team of business continuity. Any loss to production opportunities is assessed by organization and responding to all the challenges relating to oil spill events so that operations are returned to normal production status and safely minimizing the impact on environment (Harrigan 2017)

Corporate social responsibility:

            The approach of Conoco Philips to sustainable development is driven by the commitment to provide natural gas and oil for the growing demand of energy in the world. Various projects of organization intends to minimize the risk of their operations and impact on environment whilst providing benefit to communities. 

Boardroom politics:

            The roles and responsibilities of board of directors help in framing the codes of corporate governance. Procedures and rules of decision making on corporate affairs is spelled out by responsibilities and distribution of rights among various participants in the corporation such as shareholders, managers, board and other stakeholders. Performance of employees within organization and developing the means to achieve objectives is formed by the framework that is inclusive of process culture and systems. The board in oil and gas companies is composed of team of top management and principals of firm.

Sometimes, the lines between role of each individual such as manager, leader and director are blurred because of multiple roles which directors are required to play. One of the challenges is blurring of lines between roles and interpersonal relationship complexities. It is required by directors in the board to be acquainted with issue of politics. Occasional conflict is inevitable when a group of people with strong opinions and strong personalities work together (Raufflet et al. 2016). The preferred method of passing resolution at the boardroom is generally consensus, in such scenario; the death sentence for achieving the goals of board can be unchecked friction. However, any heated discussion and differences of opinion cannot be the bad thing.

Ethical matters:

            The conduct and code of ethics provides employees, suppliers and contractors with clear direction about how to behave in accordance with standards and policies and acting ethically. Conoco Philips is committed to values of people, safety, integrity, responsibility, teamwork and innovation. Global ethics and compliance team of company is guided by Chief compliance officer that helps in preventing potential liabilities and risk and ensuring regulatory adherence. The team helps in setting the tone and expectations for creating an ethical work environment. Employees and contractors are encouraged to seek guidance and ask questions about ethical concerns so that they understand their responsibility to suspect and report misconduct.

For shareholders, employees and contractor, organization has various confidential reporting mechanisms that help in creation of an environment for suspecting violations without any fear. Adherence of organization with applicable laws helps in prevention of criminal and civil liability, promotion of a positive corporate reputation and ethical working environment (Ni and Van Wart 2015). In order to maintain highest standard of operational excellence, suppliers are required to remain fully aligned with values.

            The code of business ethics gives an explanation of standard along with maintaining legal and ethical responsibilities. Such code forms the foundation of ethics programs and compliance along with providing concrete guidance to different stakeholders with which organization engages. It also intends to provide concrete guidance for expected behaviors by covering several topics such as antitrust, business ethics, political involvement and entertainment. Conoco Philips seeks gaining competitive advantage through superior performance and never through illegal and unethical business practices. Product quality in ethical context requires manufacturing and designing to meet the obligations of customers. Potential conflicts within organization is resolved by taking every efforts in association with situation of ethical codes that include the parties who have acted in good faith and such codes are disclosed to management promptly.

Behavioral challenges and potential ways of mitigating them:

            Human factors are one important area for development in accident prevention strategy. It is about interaction of individual with equipment, facilities and management systems. Behavior at work is influenced by such interaction which affects all the part of business. The level of safety behavior is considered as critical factor for organizations operating in oil and gas industry is influenced by commitment of management to safety (Wesley and MacCallum 2014).

            Involvement of safety representatives is recommended for reducing the disparity between the perceptions of workforce and management by way of assessment and gathering opinions of employees. Any form of practices of corruption by oil and gas companies would have huge damaging impact leading to overall reduction in rate of economic growth and prospects of investment. It is likely that there would be hypocrisy between the reality of corrupt practices and ethical disconnect between behaviors of internal norms.

 Moreover, the technological changes in the oil and gas industry impacts the way in which information is communicated because the operations of petroleum industry is considerably affected. Some research paper has studies the information seeking behavior and information needs in context of safety, health and responses to emergency. It is recommended that there should be adequate sensitization on part of workers relating to information significance in enhancing their productivity (Harrigan 2017). Trust can be rebuilt in oil and gas industry through a combination of measures and actions such as:

• Holding each other in organization to accept responsibility and maintaining consistent standard for industry performance at large with the hope that individual employees will be taking efforts to avoid the incident themselves.
• It is further recommended that there should be adequate provisions of safety and health information by management of oil and gas companies so that workers operate safely. There should be implementation of safety control structure by enforcing behavioral safety constraints. Different roles should be played by each component of structure as it would be entrusted with different responsibilities for ensuring physical process safe behavior (Al Hashmi 2017).
• In order to have an understanding of individual behavior of employees requires management to influence the environment in which behavior occurs along with the pressure.
• Measures should be taken by organization for development of industry wide standard for environmental performance with reporting that are transparent. There should be mutual management of risks by holding each other accountable (Harrigan 2017).

Conclusion:

            The report is prepared for evaluating different themes on matters of corporate governance in context of Conoco Philips. It has been ascertained that there are fewer differences relating reputation management, corporate social responsibility and corporate governance between oil and gas industry and organizations operating in other industries such as retail, telecommunication and airline. However, the main focus of corporate governance in relation to oil and gas industry is about environmental concerns and how the operations impact the local community and people at global level. In order to address the environmental challenges, Conoco Philips has taken several proactive and reactive measures that make organization a good corporate citizen being a socially responsible. Nevertheless, there are some behavioral challenges faced by company which should be addressed by making appropriate recommendations.

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