Denbury Board Oversight Report 2013
|Company||Denbury Resources Inc.|
|Filer||Calvert Asset Management Company, Inc.|
|Sector||Oil and Gas|
|Resolved Clause Summary||Board commitment to oversight of environmental and social matters|
|Status||Withdrawn; Company will address|
WHEREAS: Environmental and social issues are increasingly understood to be relevant to business success and investors seek assurance that environmental and social concerns are understood and addressed at the highest level of corporations;
The Board of Directors has ultimate oversight of long-term corporate strategy, brand reputation and the overall welfare of the company, all of which depend upon strong management of environmental and social risks and opportunities;
High-profile disasters such as those that occurred at a Massey Energy mine and a BP offshore oil rig demonstrate that prudent management of social and environmental issues is critical to risk mitigation. IPIECA, the global oil and gas industry association for environmental and social issues indicates that “social impacts are visible and can lead to operational, legal, regulatory and financial risks.”
Environmental risks are especially material in the oil & gas industry. For example, “In the U.S. there have been numerous incidents of poorly constructed wells, equipment failures, degraded local and regional air quality, water contamination, strained community relations, and related government enforcement actions and private lawsuits. Moratoria or bans have been enacted in New York State, the Delaware River basin, and by local governments in several U.S. states.” (Extracting the Facts: An Investor Guide to Disclosing Risks from Hydraulic Fracturing Operation)
Boards increasingly recognize that effective management of environmental and social risks is linked to business performance, with 65% of companies in the S&P 100 explicitly providing for Board oversight of corporate responsibility in a Board committee charter (according to Board Oversight of Environmental and Social Issues: An Analysis of Current North American Practice). A 2010 Accenture survey reports that 93% of CEOs believe sustainability issues should be considered at the Board level.
Leading organizations including the National Association of Corporate Directors, The Organization for Economic Cooperation and Development, and the International Finance Corporation link good corporate governance to responsible management of environmental and social risks.
Governance and business leadership groups The Conference Board, Committee for Economic Development, Business for Social Responsibility, and International Business Leaders Forum describe oversight of sustainability and responsibility issues as part of the board’s obligations related to fiduciary duty, long term stewardship, and stakeholder engagement.
RESOLVED: Shareholders request that the Board of Directors publicly commit to oversight of environmental and social matters through a board committee charter or governance document and report on the implementation of such oversight. The report should be prepared at reasonable cost, omitting proprietary information, and shall be released by December 1, 2013.