PG&ECorporate Responsibility and Sustainability Report 2022

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Corporate Governance

PG&E’s corporate governance practices are fundamental to how we operate as a business and our sustainability performance. The Corporate Governance section of our website details the policies and practices of the Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company (together, the ”Boards“), including governance guidelines, bylaws (PDF), disclosure standards, and Codes of Conduct for directors and employees.

Our Boards

Our Boards are responsible for overseeing our companies’ long-term business strategy and our purpose of delivering for our hometowns, serving our planet, and leading with love. The Boards focus on ESG matters, goals, and performance, and closely follow metrics that demonstrate operational performance. Our Board members are experienced, qualified, and committed. Detailed biographies of our Board members can be found in the companies’ Joint Proxy Statement (PDF).

PG&E Corporation’s and the Utility’s Boards of Directors are composed of the same directors with the addition of the Utility’s principal executive officer on the Utility Board. In January 2021, the PG&E Corporation Board appointed Patricia K. Poppe as the Chief Executive Officer of PG&E Corporation, followed by the Utility Board’s appointment of Adam Wright as Executive Vice President, Operations and Chief Operating Officer (COO) of the Utility in February 2021. Ms. Poppe sits on the PG&E Corporation and Utility Boards, and Mr. Wright sits on the Utility Board.

To create stability as we emerged from Chapter 11 in 2020, and as part of our Plan of Reorganization, we agreed with the CPUC that our Boards would be divided into two classes, with each class elected for a two-year term. These terms will be phased out over the next two years so that, in 2024, all directors will be elected for a one-year term and stand for election annually.

Our Governance Practices

Board meetings for both the Corporation and Utility had an attendance rate of 99% in 2021. Each incumbent director attended at least 75% of the total meetings of the Boards and the Committees on which he or she served.

An underlying factor for strong corporate governance is the commitment and independence of the boards and their fiduciary responsibilities to the companies and their respective shareholders. The companies’ respective Corporate Governance Guidelines promote board independence by requiring policies and practices such as the following:

  • All directors of each company must be independent, except for the CEO of PG&E Corporation and the COO of the Utility.
  • Each Board has an independent Chair, elected by the Board.
  • Only independent directors are allowed to serve on standing key Board committees (other than the Executive Committee).
  • Members of each company’s Audit Committee and PG&E Corporation’s People and Compensation Committee meet additional independence standards set by stock exchanges and the SEC.
  • Executive sessions of the independent directors are held at each regularly scheduled Board meeting, without the presence of each company’s management.
  • A director overboarding policy prohibits service on more than three public company boards.

PG&E Corporation’s Sustainability and Governance Committee oversees the director refreshment process each year. This process includes an annual review of independence, an assessment of skills and qualifications, and an evaluation of the directors’ commitment to serving on the Boards. The Sustainability and Governance Committee also considers diversity, ties to our service area, and fit with the Boards. For new Board nominees, the Committee works with independent search firms to identify qualified candidates. All candidates are evaluated using the same criteria.

Board diversity also contributes to strong corporate governance and is a core value for PG&E. Our current Board composition exceeds the requirements of California’s AB 979 on board diversity: 57% of Board members at the Corporation and 60% of Board members at the Utility are either women or are racially or ethnically diverse. For a detailed graph of Board diversity at PG&E, please refer to the 2022 Joint Proxy statement (PDF) (page 20).

  • 93% of Board members at Corporation and 87% of Board members at Utility are independent under NYSE definitions
  • 57% of Board members at Corporation and 60% Board members at Utility are either women or racially, ethncially diverse

PG&E Corporation and the Utility use a matrix of skills for board members that was developed with input from regulators and other stakeholders. The matrix emphasizes specific experience in utility management, natural gas systems, nuclear generation, emergency management, wildfire management, and financial literacy. Each Board member is evaluated with this list of skills in mind as part of the refreshment process, as required by our corporate governance guidelines. Safety and Nuclear Operations Committees members and the Utility Chair are required to possess special expertise in operations, cybersecurity, or risk.

The PG&E Corporation and Pacific Gas and Electric Company Boards and their respective Committees have oversight responsibility for key issues, such as climate resilience and sustainability, cybersecurity, risk, safety, people, and financials:

  • Sustainability and Governance Committee Footnote 1a has primary oversight of climate risk and adaptation planning, corporate sustainability issues, such as environmental compliance and leadership, corporate governance, charitable contributions, and public policy issues. This includes an annual review of PG&E’s environmental performance and sustainability practices. The committee also oversees an annual Board evaluation process as well as the nomination process for directors.
  • Safety and Nuclear Oversight Committees have oversight of risk, employee and public safety, and cybersecurity, among other topics, as they impact PG&E’s assets and operations. The committees receive regular briefings on cybersecurity issues. We have also, through our Chief Safety and Risk Officer, as well as other PG&E leaders, enhanced reporting and oversight of key operational issues, such as safety, wildfire safety, risk, and asset management.
  • People and Compensation Committee Footnote 1b has oversight of compensation-related issues, as well as diversity, equity, and inclusion. The committee oversees an executive compensation program structure that links pay to performance, aligns interests with shareholders and customers, and prioritizes safety. The committee also oversees succession planning for the CEO and other senior management.
  • Finance and Innovation Committee Footnote 1c has oversight of forward-looking financial planning and investments in technology designed to increase our delivery of safe, affordable, and clean energy to customers, allowing PG&E to enable a low-carbon future.
  • Full Boards address other components of PG&E’s sustainability commitment, focusing on long-term strategy and investments in a low-carbon future.
  • 1. Committees of the PG&E Corporation Board of Directors only. 1a, 1b, 1c

The Boards will continue to review PG&E’s corporate governance practices on an annual basis in line with industry best practices. PG&E actively engages with shareholders regarding governance practices and other matters, and will amend these practices when doing so is in the best interest of the companies and their shareholders.