The Freeport-McMoRan Board of Directors (board) as a whole is responsible for risk oversight, with reviews of certain areas being conducted by the relevant board committees that regularly report to the full board. In its risk oversight role, the board reviews, evaluates and discusses with members of management whether the risk management processes designed and implemented by management are adequate in identifying, assessing, managing and mitigating material risks.
The board believes that full and open communication between senior management and the board is essential to effective risk oversight. Our non-executive chairman regularly meets with and discusses with our chief executive officer a variety of matters including business strategies, opportunities, key challenges and risks facing the company, as well as management’s risk mitigation strategies. Senior management attends all regularly scheduled board meetings where they conduct presentations on various strategic matters involving our operations and are available to address any questions or concerns raised by the board on risk management-related or any other matters. The board oversees the strategic direction of the company, and in doing so, considers the potential rewards and risks of our business opportunities and challenges, and monitors the development and management of risks that impact our strategic goals.
The board has five standing committees: Audit, Compensation, Nominating and Corporate Governance, Corporate Responsibility, and Executive, each of which is composed entirely of independent directors. The Corporate Responsibility Committee assists the board in fulfilling its oversight responsibilities, including with respect to the company’s 1) environmental policy and implementation programs; 2) human rights policy and practices; 3) safety and health policies and programs; 4) community health programs and related public health matters; and 5) community policy and practices, governmental and stakeholder relations, and social investment and sustainable development programs.
During 2016, the Corporate Responsibility Committee received various reports and considered numerous items with a particular focus on safety, which included reviewing the root causes of fatal accidents, corrective actions implemented to prevent accidents in the future, and improvement in our safety procedures and practices. In addition, the Corporate Responsibility Committee reviewed community medical and public health services, including our malaria and other disease prevention programs in Indonesia and the DRC, our global social expenditures, community engagement efforts, political activity and spending practices, the safety reporting process at our operations, our risk management and sustainability programs, our human rights program, our product stewardship program, and our tailings stewardship program. The Corporate Responsibility Committee reports to our board, which provides oversight on all matters.
PHOTO DESCRIPTION: Bill Cobb, Vice President-Environmental Services and Sustainable Development, works with Cerro Verde and El Abra sustainability professionals at a workshop in Arequipa, Peru.