Transcription
StewardshipFramework
Stewardship FrameworkOverviewOur words and commitments matter. We havehelp people improve their lives, and to do sothe courage to stand up for what we believe andresponsibly. We are convinced (and history confirms)will not make commitments or act in ways thatthat a business can only succeed long term if it operatesare inconsistent with our principles and do morein a spirit of mutual benefit—a win-win philosophy.harm than good. We believe in people and seek aCompanies that do so are exemplars of responsibility.system of equal rights and mutual benefit whereAt its best, Koch’s philosophy of mutual benefit helpsindividuals succeed by helping others succeed.generate breakthrough innovations that dramaticallyimprove lives. At the very least, it means we constantlyAt Koch companies, our management framework,Market-Based Management (MBM ), is based on provenprinciples of human progress and a deep appreciationfor the dignity of every individual. Our focus onstrive to deliver better products while consuming fewerresources. To be clear, although profit is not our onlygoal, we do regard it as a valid and important measure ofour contributions to society.individuals and bottom-up solutions rather than top-downimperatives is evident in our Stewardship FrameworkAt Koch, stewardship encompasses the responsibleand drives our approach to Environmental, Social andmanagement of our actions and the resources entrustedCorporate Governance (ESG).to our care in a manner that respects the rights of others.By “rights,” we mean everyone’s right to their own lifeKoch’s starting point is simple: We believe the role ofand property, and equal treatment under the law. 2021 Koch Industries, Inc. All rights reserved.business in society is to create goods and services that2
Stewardship FrameworkWe do this by:Applying a robust risk managementframework. We leverage early-warningUsing best knowledge, employee know-how, andsystems, data, and technology toinnovation to operate in a responsible way. Wequickly address problems and keepprioritize the health and safety of our employeesus on track.and communities, expect all employees to complywith all laws and regulations, and practice aphilosophy of mutual benefit.Helping all employees have opportunitiesthat fit their gifts and abilities to contribute tosociety and improve their own lives. We valuean individual’s character and a contributionmindset over credentials, connections, orgroup affiliation.Building mutually beneficial, long-termpartnerships with customers, employees,suppliers, regulators, and the communitiesin which we operate. We give preferenceto those who are principled and committedto creating value in society.Fighting against cronyism and otherpractices that use the power of governmentto gain profit by inhibiting opportunity,competition, innovation, or by otherwiseviolating the rights of others. 2021 Koch Industries, Inc. All rights reserved.3
Stewardship VisionWe help people improve their lives by providing products and services they value more highly thantheir alternatives. We experiment and innovate to responsibly create more value while consumingfewer resources. We seek mutually beneficial outcomes with customers, employees, suppliers,communities, and other key constituencies.Environmental Priorities1INNOVATIONDiscover new technologies and methods to create more value for ourcustomers while using fewer resources, minimizing waste, and improving theenvironmental performance and effectiveness of our products and processes.This benefits our customers, employees, investors, the communities in whichwe operate, and society as a whole.2ENERGY EFFICIENCYContinually improve energy efficiency and develop innovative technologies,which will further reduce greenhouse gas emissions.3AIR QUALITYSeek new ways to reduce and improve air emissions.4WATERExplore new opportunities to reduce water consumption and improve thequantity and quality of water discharge.5RESPONSIBLE RESOURCE MANAGEMENTEnsure our resources are managed to create value for Koch and 2021 Koch Industries, Inc. All rights reserved.our constituencies.4
Stewardship VisionSocial Priorities12HEALTH AND SAFETY4The safety and well-being of our employeesWe strive to treat every person with dignity andand communities is our first priority. We buildrespect, encourage and foster networking, andcapability in our employees and resilience insponsor activities that are inclusive and focus onour systems to prevent serious incidents.shared interests. We celebrate the uniquenessof each individual and believe it is disrespectfulEMPLOYEE SELF-ACTUALIZATIONto judge a person—positively or negatively—We believe everyone can discover andbased on group identity. Characteristics such asdevelop their innate abilities and apply them toheritage, gender, and many others often inform ancontribute and succeed when empowered toindividual’s experiences and perspectives and cando so. We seek to create opportunities basedhelp them create value. But no single characteristicon each individual’s unique gifts and potentialshould be used to define another person.to contribute. A supervisor’s primary role is tosupport employee development by designing3INCLUSIVE ENVIRONMENT5UNLEASH THE POWER OF DIVERSITYroles that fit, coaching and mentoring toWe continually expand our outreach to hire andhelp them thrive, seeking and using theirretain contribution-motivated employees. Kochknowledge and ideas, removing barriers, andselects and empowers employees, includingencouraging role changes (anywhere acrossleaders, who have a variety of perspectives,Koch) that enable them to more fully realizeaptitudes, skills, knowledge, experiences, andtheir potential.backgrounds. This diversity enables us to worktogether to identify opportunities, solve problems,EMPLOYEE COMPENSATION AND BENEFITSand create greater value for others. We solicitWe reward employees for their contributionchallenge consistently and respectfully fromto the long-term success of Koch Industriesemployees at all levels of the organization.consistent with our Guiding Principles. Wecontinually look for mutually beneficial6COMMUNITY OUTREACH AND INVOLVEMENToutcomes by providing employees withThrough our businesses and philanthropicbenefit choices aligned with their valuesendeavors, we seek to make society betterand personal situations.through mutual benefit. We contribute to creatingthe best possible environment where all peoplehave the opportunity to develop their uniquetalents and abilities. We provide employeeengagement opportunities that enable them to 2021 Koch Industries, Inc. All rights reserved.build relationships, have meaningful and fulfillingexperiences, and make a positive difference in theircommunities based on what is important to them.5
Stewardship VisionGovernance Priorities1SHARED VISION AND PRINCIPLESOur board members are employees andVision of creating more value for othersmajor shareholders with a variety of differentthrough virtuous cycles of mutual benefit.perspectives, aptitudes, skills, knowledge,Everything we do is grounded in ourexperiences, and backgrounds.and Guiding Principles.6FINANCIAL STRENGTH AND RESPONSIBILITYOur use of debt is prudent. We have financialPRIVATE OWNERSHIPstandards and controls to guide our companiesBecause it is privately held, Koch is betterand employees regarding performanceable to make decisions and take actionsexpectations. Shareholders consistently reinvestthat create real and lasting value. We are90% of earnings back into the company–anot constrained by quarterly or short-termpractice which funds the experiments, innovations,demands, such as earnings or share priceand opportunities for employees to create ever-targets. Instead, we focus on long-termgreater benefits for society.value creation.3CORPORATE BOARDAll Koch companies are guided by theMarket-Based Management philosophy257OPEN COMMUNICATIONCOMPLIANCE AND ETHICS STANDARDSKoch openly and proactively communicates withKoch has robust compliance standardscustomers, employees, and other constituentsand risk management systems. Our Globalabout our principles and EHS performance.Code of Conduct, and the training on theCode that all employees receive articulatesexpectations for every employee regardlessof role. Employees and third parties aregiven several channels for raising issuesand concerns without retaliation and areexpected to “stop, think, and ask.”4OVERSIGHT ANDCONTINUOUS IMPROVEMENTAudit and self-assessment results, incidenttracking, investigations, and knowledgesharing are just some of the tools we use tolearn and improve our performance. Thereis board-level oversight of our audit andassurance programs. 2021 Koch Industries, Inc. All rights reserved.6
harm than good. We believe in people and seek a system of equal rights and mutual benefit where individuals succeed by helping others succeed. At Koch companies, our management framework, Market-Based Management (MBM ), is based on proven principles of human progress and a deep appre
