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Governance

Board of directors

At Sempra, our vision is to deliver energy with purpose. Fulfilling this vision starts with responsible governance and our board of directors. Sempra’s board oversees the management of our company, providing experienced and independent leadership.

The board, among other things:

  • Selects our chief executive officer and oversees his or her performance and that of other senior management in the operation of the company;
  • Reviews and monitors strategic, financial and operating plans and budgets and their development and implementation by management;
  • Assesses and monitors risks to the company’s business and evaluates and oversees risk management strategies;
  • Reviews and approves significant corporate actions;
  • Fosters the company’s values-driven culture and reviews and monitors processes designed to maintain the company’s integrity, including financial statements, compliance with law and ethics and relationships with shareholders, employees, customers, suppliers and other stakeholders;
  • Plans for management succession; and
  • Nominates directors, evaluates board effectiveness, appoints board committee members and oversees effective corporate governance.

The board recognizes the importance of risks and opportunities related to environmental stewardship, safety, stakeholder engagement and responsible governance and believes a focus on these factors is consistent with our vision, mission and values and can help our company achieve better business outcomes.

Our board collectively possesses a broad and deep range of skills that enables effective oversight of strategy and risk management, including as it relates to our ESG priorities. Our directors come from a variety of backgrounds including as executives of global companies, government service and public policy, financial institution leadership and others, both within and outside of our industry. These diverse backgrounds provide a multidimensional perspective to the board’s evaluation and oversight of key ESG matters. Further, a number of our directors have had direct exposure to, and in many cases direct oversight or decision-making responsibility for key environmental, human capital, cybersecurity, regulatory and government affairs matters. Finally, the insights our directors bring from their leadership on other public company boards is highly valuable in deepening our board’s understanding of cross-cutting ESG matters, which often are evolving as the business and market context and regulatory environment continues to shift for Sempra and other companies globally. These diverse backgrounds, experiences and insights guide the board as it effectively oversees management.

The board monitors overall governance processes and delegates specific areas of focus to standing committees. For example, the board’s SS&T committee is responsible for the oversight of the company’s risk management and oversight programs and performance related to environmental, health, safety, security, technology, climate change, human rights, sustainability and related ESG matters. The board updated the SS&T committee’s charter in 2020 and 2021 to strengthen and clarify the way this committee oversees and considers sustainability and other related matters. In addition, the board’s Compensation and Talent Development (C&TD) committee is responsible for the oversight of the company’s programs and initiatives related to human capital matters, including our commitment to fostering a diverse and inclusive workplace. These committees and the full board continue to strongly focus on key ESG topics such as our high-performance culture, which includes our focus on safety, employee development and diversity and inclusion, the energy transition and our disclosures and transparency about these matters.

The SS&T committee is entirely composed of independent directors under the independence standards established by the New York Stock Exchange. This committee’s responsibilities include, among others, assisting the board:

  • In overseeing the company’s risk management and oversight programs and performance related to environmental, health, safety, security (including cybersecurity), technology, climate change, sustainability and other related ESG matters (including human rights) affecting the company;
  • In overseeing matters relating to environmental, health and safety laws, regulations and other ESG developments at the global, national, regional and local levels and evaluating ways to address these matters as part of the company’s immediate and longer-term business strategies and operations;
  • In reviewing and monitoring the company’s Human Rights Policy and related implementation efforts, including the company’s response to domestic and international developments in human rights that affect the company’s business;
  • In reviewing management’s implementation of risk management protocols with respect to cybersecurity issues, and overseeing matters relating to technology developments that advance the company’s environmental, health, safety, security (including cybersecurity), climate change, sustainability and other related ESG goals;
  • In reviewing with management and, where appropriate, making recommendations to management and the Board of Directors regarding the company’s policies, practices and strategies with respect to environmental, health, safety, security (including cybersecurity), technology, climate change, sustainability and other related ESG matters.

The board influences the tone and safety culture of the organization through, among other things, the questions they ask, the focus they place on key organizational issues, the messages they give during direct interactions with employees and overall compensation programs.

The board of directors’ SS&T Committee is the highest-level committee responsible for the oversight of the corporation’s risk management and oversight programs and performance related to environmental, health, safety, security (including cybersecurity), technology, climate change, sustainability and other related ESG matters (including human rights) affecting the corporation.

Board Composition1

Our board recognizes that diversity takes many forms and brings many benefits, and is focused on fostering an inclusive culture of integrity, collaboration, innovation and accountability. The board believes that its membership should reflect diversity and be drawn from a pool of qualified candidates with different skills, experience, gender and ethnicity.

Independent

Board Tenure (Years)

Board Diversity

Board members’ areas of expertise3

In total, our outreach to shareholders in our 2021 engagement cycle, including our spring 2021, summer 2021, December 2021 and January 2022 engagements, represented approximately 59%2 of our total outstanding shares of common stock, and we engaged with holders of approximately 57%2 of our outstanding shares of common stock (a significant majority of our institutional share ownership) by holding telephonic or video conference meetings to discuss a range of issues including: business and strategy, board composition, leadership and refreshment, executive compensation and ESG matters (including a shareholder proposal included in our 2021 proxy statement regarding climate-related lobbying activity, the company’s COVID-19 response and diversity and inclusion).

Additional information on these topics is available in our proxy statement. These conversations are an important way to gather feedback that informs our policies and programs in a variety of areas, such as environmental practices, sustainability efforts, executive compensation and governance.

  1. These charts summarize the diversity, tenure and independence of our directors nominated to stand for election at the Annual Shareholders meeting in May 2022.
  2. One director is a Latina woman.
  3. Includes directors nominated to stand for election at the annual shareholders meeting in May 2022.
  4. Includes engagement with Newport Trust Company, the independent fiduciary for the Sempra Energy Common Stock Fund. Newport Trust Company exercises its discretion on all matters to vote shares held in the Sempra Energy Common Stock Fund under Sempra, SDG&E and SoCalGas’ 401(k) employee savings plans for which it receives no voting instructions. Newport Trust Company also votes shares held in the Sempra Energy Common Stock Fund for which it receives timely voting instructions from the underlying shareholder in accordance with such instructions. We engaged with Newport Trust Company on behalf of the holders of shares held in the Sempra Energy Common Stock Fund during our 2021 engagement cycle, and we included the number of shares Newport Trust Company voted at our 2021 annual shareholders meeting (including shares voted on both a discretionary and shareholder-directed basis) in calculating these percentages, which was approximately 8,300,000.

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