Living Our Values guides the Company's approach to managing its business — what it believes in, how it behaves, what it invests in, and the projects and issues it influences and promotes. Marathon's actions, decisions and operations must be consistent with the letter and spirit of its commitment to health and safety, environmental stewardship, honesty and integrity, corporate citizenship, and a high performance team culture.
Values Underpin Marathon's Approach to Meeting Energy Demand
Marathon delivers energy resources that are essential to society. Global demand for
energy is projected to increase over the next several decades, primarily driven by
population growth, and the desire of developing nations to achieve prosperity and
improve the standard of living and welfare of their citizens.
It is projected that fossil fuels — oil, natural gas and coal — will continue to be the primary sources of energy during this period of significantly increasing demand. Oil and natural gas comprise approximately 60 percent of global energy use today and are projected to comprise the same portion in 2030, according to International Energy Agency (IEA) estimates.
Marathon recognizes that meeting this growing demand will become increasingly complex and competitive. Energy supplies must be secure, affordable, accessible and produced in an environmentally responsible fashion, whether generated from fossil fuels or alternative sources.
Marathon's commitment to its core values enables the Company to meet the increasing energy needs of private citizens, commercial enterprises and the public sector in a responsible and respectful way. The Company is accountable for its actions to investors, employees, customers, suppliers, communities, business partners and host governments, among others.
Corporate Social Responsibility Strategy
Marathon's values are an integral aspect of its business strategy, planning and
execution, and the Company expects employees to use these to guide their actions. The
Company also has a supporting framework of nine fundamental Corporate Social
Responsibility (CSR) elements (community development, stakeholder engagement, capacity
building, transparency, rule of law, education and training, environmental stewardship,
human rights and performance reporting) that create a link between its social programs
and business operations.
CSR projects are developed to meet specific needs of communities or other stakeholders. Projects typically are commensurate with the scale of the business operation and the stage in the operation's life cycle. Other factors such as geographic location, the local or regional social and political context, and overall humanitarian needs also affect program design. In practice, more complex social programs can be undertaken with larger, long-life operating assets in areas with underdeveloped socioeconomic conditions, especially when initiated early in the operation's life cycle.
Cooperative social projects are initiated as voluntary programs with the goal of contributing to economic development while respecting the culture and improving the quality of life of local communities and other stakeholders. Emphasis is placed on ensuring adequate capacity building at the local level so that others can sustain the programs in the future. This way, the benefits last beyond Marathon's initial investment and involvement.
Successfully implementing these programs helps position Marathon as an industry partner of choice in areas where it operates.
Corporate Governance
Marathon takes appropriate steps to support a board of directors that makes independent
decisions on behalf of all shareholders. A system of internal controls and reporting
mechanisms is intended to protect the Company's assets and operations and provide
management and the board with accurate and timely information.
Eleven of Marathon's 12 directors qualify as independent, based on criteria set forth in the New York Stock Exchange's Listed Company Manual and the Company's Corporate Governance Principles. Currently, separate individuals hold the positions of chairman of the board and chief executive officer. The board of directors has four principal committees: Audit and Finance, Compensation, Corporate Governance and Nominating, and Public Policy. All committee members are independent, non-management directors.
To improve board accountability, Marathon requires the annual election of directors and majority voting in the election of directors. The Company eliminated supermajority voting provisions, making it possible for shareholders to amend the Company bylaws with a majority of votes cast.
Marathon's board of directors met eight times in 2007, with attendance averaging 97 percent for an aggregate of the total number of board and committee meetings. Non-management directors held five executive sessions that excluded members of Marathon management.
Corporate Governance Quotient (CGQ®), a recognized corporate governance rating system, gives Marathon high rankings based on corporate governance variables related to board of directors, audit, anti-takeover provisions, and executive and director compensation. Marathon's May 2008 CGQ® is better than that of 57 percent of companies in the Standard & Poor's 500 Index and 94 percent of energy companies.
Oversight Responsibility
The Public Policy Committee of the board of directors was established effective January
2008. Its role is to identify, evaluate and monitor social, political and environmental
trends, and issues and concerns that could affect Marathon's business activities and
performance. It also analyzes the Company's global reputation and strategic position, and
develops recommendations for the board concerning broad public policy issues such as CSR.
The Public Policy Committee has oversight responsibility for Marathon's senior-level CSR Management, and Health, Environment and Safety (HES) Committees.
Health, Environment, Safety and Security Management Systems
Marathon employs a "plan-do-check-review" management system framework to drive continual
HES and security improvement throughout its business operations.
Marathon locations apply either the internal, integrated Global Performance System or the American Chemistry Council's Responsible Care® program. These management systems are designed to proactively address the Company's HES and security risks. They meet recognized international standards, formalize a best-practices approach and facilitate continual improvement. Risk assessment and risk management are fundamental to Marathon's management systems and are integrated into business and operating planning cycles and decision-making processes. Management system elements include three-tiered auditing, leadership, stakeholder engagement, management of change, incident investigation, emergency preparedness, security and management review.
Corporate standards and guidelines drive consistency and set expectations throughout the Company. Management systems are implemented at the organizational level with business segment and corporate oversight. Individual organizations develop programs, processes and procedures that meet corporate requirements.
