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Governance

Sempra Energy’s values and code of conduct guide the implementation of our business strategy: What we
do is important, but how we do it is even more critical.

Board of directors

The business and affairs of Sempra Energy are managed under the direction of the Sempra Energy board of directors; our company’s highest governing body. The members of Sempra Energy’s board of directors have a fiduciary responsibility to the company and its shareholders to act in their best interests. Board members must also avoid situations in which their own interests are in conflict with the interests of the company or its shareholders.

As of December 31, 2015, Sempra Energy’s board of directors had 12 members with a diverse range of skills and deep experience in areas relevant to overseeing a large multinational energy services holding company. These include experience in:

  • Executive management;
  • Public and private finance;
  • Legal and regulatory issues;
  • Government, political and public service;
  • Transnational business activities, and international energy markets and operations;
  • Real estate;
  • Corporate governance;
  • Technological advances;
  • Business models; and
  • Energy infrastructure construction and operations.

With this range of experiences and backgrounds, the members of the board can provide Sempra Energy with oversight that is both independent and valuable.

In addition to its oversight role, our board reviews business plans and performance; oversees risk management and succession planning; and establishes corporate governance policies that guide Sempra Energy’s operations. The board is organized into five standing committees: the Audit Committee; the Compensation Committee; the Corporate Governance Committee; the Environmental, Health, Safety and Technology Committee (EHS&T); and the Executive Committee. As one of its responsibilities, the EHS&T committee reviews Sempra Energy’s annual corporate responsibility report.

As of December 31, 2015, 11 of the 12 members of Sempra Energy’s board were independent, according to the principles and standards established by the New York Stock Exchange. Six of the 12 members, or 50 percent, were women or people of color.


Shareholder engagement

Sempra Energy’s board is accountable to company shareholders. We encourage our shareholders to communicate with directors on all issues relevant to the company — and we work to respond to their suggestions and concerns.

For a description of how we engage with investors and shareholders, and an overview of some key governance issues, please see the Investors and shareholders section.


Values & codes of conduct

At Sempra Energy, we work to fulfill our commitments to our many stakeholders. This work is guided by our values. We act with honesty and integrity. We engage with others and seek their feedback, acknowledging the importance of diverse perspectives. We set and achieve tough goals. And we think strategically and critically, with an eye toward the future. The Stakeholders section of this report has more detail on how we engage with our employees, customers, communities, business partners, regulators and shareholders.

In addition to these values, we have specific expectations for Sempra Energy directors, employees and suppliers, which are found in Sempra Energy’s respective business codes of conduct for these stakeholders. We believe in adhering to the highest standards of business conduct. Ethical behavior — every hour of every day — is our expectation.

Our codes of business conduct are guidelines for maintaining a legally compliant and ethical workplace. We expect each board director, employee and supplier will understand and comply with their code of conduct.

The codes cover safety, promote a discrimination- and harassment-free workplace, confidentiality and privacy, environmental protection, charitable activities, political participation, anti-trust, anti-corruption and bribery, fair competition, conflicts of interest, records management and securities training, among other topics. Our commitment to responsible and ethical behavior is further detailed in a range of corporate policies.

We recognize our codes of conduct and related policies are more effective when employees, contractors, customers and suppliers trust they can report a potentially unsafe, unethical or compliance-related concern without fear of retaliation. To encourage sharing of these concerns, Sempra Energy provides a wide range of reporting channels.

Employees may report a concern to: their immediate supervisor; the next level of management above their supervisor; the corporate compliance department; the human resources department; our chief ethics officer, currently Senior Vice President, Chief Human Resources and Administrative Officer G. Joyce Rowland; the Ethics & Compliance Helpline; or they may take other actions as outlined in our Code of Business Conduct.

Suppliers, shareholders, regulators and customers may report potentially unsafe or unethical conduct or other compliance-related concerns via the Ethics & Compliance Helpline:

  • SempraEthics.com
  • United States: 800-241-5689
  • Mexico: 001-770-582-5249
  • Chile: 600-320-1700
  • Peru: 0800-7-0690

The Helpline is available 24 hours a day seven days a week, and provides the option to report anonymously. Every report made to the Ethics & Compliance Helpline is investigated.

To emphasize the importance of ethics and compliance, we require all employees to complete a training curriculum each year, customized according to their position and responsibilities. These training courses address topics such as insider trading; Sarbanes-Oxley regulations; anti-corruption, including local laws and the U.S. Foreign Corrupt Practices Act; Code of Business Conduct; Federal Energy Regulatory Commission Standards of Conduct; California Public Utilities Commission affiliate-compliance rules; safety; harassment-free workplace; and workplace violence. Sempra Energy employees completed more than 30,000 courses related to ethics and compliance, with the average employee spending approximately six hours in training in 2015.

Sempra Energy’s subsidiaries ask suppliers to review and follow the supplier code of conduct, as part of their contractual obligations.

Any contractor, supplier, employee or member of management who does not comply with applicable laws or corporate policies is subject to disciplinary action, including termination.

A focus on anti-corruption and bribery

Sempra Energy is committed to succeeding based on the quality of our people and our services and projects. We comply with all anti-corruption and bribery laws, including the U.S. Foreign Corrupt Practices Act (FCPA), wherever we conduct business. Such laws make it illegal to bribe a governmental official to obtain or retain business or an improper advantage. Anti-corruption laws prohibit giving anything of value, such as a payment, gift or bribe, to obtain the influence of foreign officials, candidates or political parties, even if to do so is a local practice. This prohibition can extend to the official’s friends and family members.

Employees or agents of our company in our foreign subsidiaries or involved with foreign transactions or activities receive special training on, and must comply with, the company’s guidelines regarding anti-corruption.


Political involvement

It is appropriate — and important — for our company to engage with policymakers. Laws and regulations can have a significant impact on Sempra Energy’s prospects and results. Moreover, elected officials and regulators benefit from hearing different points of view.

Sempra Energy representatives meet with lawmakers at the federal, state and local level. We participate in meetings; testify before committees; write letters in support of, or in opposition to, proposed policies; and make political contributions. We also maintain membership in various business and trade associations that advocate on public policy.

In 2015, Sempra Energy reported lobbying expenditures, excluding political contributions, of $3,871,331, at all levels of government. Lobbying expenses include time and expenses incurred in the course of lobbying; expenses related to the operation of our offices in Washington, D.C. and Sacramento, Calif.; fees paid to lobbying firms; and the lobbying portion of fees we paid for membership in business or trade organizations. In addition to lobbying expenses, our company also made $872,126 in political campaign contributions to state and local candidates, political committees and caucuses, as allowed by law. Sempra Energy does not make political contributions to federal candidates or outside the United States.

Sempra Energy’s employees also participate in the political process through the Sempra Energy Employees’ Political Action Committee (SEEPAC). SEEPAC provides a voluntary and convenient way for employees to support candidates who are open to learning about and addressing the issues our industry faces. Although SEEPAC’s governing board of directors comprises leaders from the company and its subsidiaries, the organization is independent from Sempra Energy. In 2015, SEEPAC made $308,750 in political contributions, primarily to federal candidates. SEEPAC supports candidates for office regardless of political party – and complies with all reporting requirements governing political action committee contributions.

Congressman Ben Ray Lujan speaks to SEEPAC members.

All corporate and SEEPAC political contributions, as well as the lobbying portion of fees paid for membership in business and trade associations (where membership fees were $20,000 or more), are posted on the governance section of Sempra.com semiannually.

In 2015, Sempra Energy was ranked in the Center for Public Accountability’s Zicklin Index’s top tier for transparency. The Index benchmarks the political disclosure and accountability policies and practices of leading U.S. public companies.