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Governance Priorities

Corporate governance is not an everyday concern for most people. It is, however, a big part of what makes companies act the way they do.

Koch’s Stewardship Vision for addressing governance encompasses seven priorities: Shared Vision and principles, private ownership, compliance and ethics, oversight and continuous improvement, our corporate board, financial strength and responsibility, and open communication.

There are a number of other governance priorities that could have been included based on what other companies are doing. But we are different and remain true to our MBM® principles. Being a private company is a competitive advantage. It allows us to have a long-term focus, enabling us to more fully concentrate on creating value for others.

For example, although Koch Industries is privately held, its leadership is committed to openly and proactively communicating about important governance issues. Although it is not obligated to do so, Koch continually reaches out, not just to employees and customers, but to suppliers, communities, co-investors, regulators and society as a whole. There are abundant examples of this:

Curious about Koch’s environmental performance? You’ll find websites and publications with page after page of detailed information. Did you know that Koch recycles, reuses or treats more than 90% of the waste it produces?

Wondering what Koch expects of its employees? Check out the company’s Code of Conduct, which includes this admonition: “The company appreciates the value of diversity. To deny someone’s contribution to the company because of unlawful discrimination or harassment would be an injustice not only to the individual, but to the company as well, and will not be tolerated.”

Need to know more about Koch’s unique business philosophy, Market-Based Management®? Charles Koch has written three books on the subject, all of which are filled with detailed explanations of how and why the company operates the way it does. The most popular of these, “Good Profit,” was an instant New York Times bestseller.

When Charles Koch commented on “Good Profit” recently, he said: “Six years ago, I wrote a different kind of business book. It was not about getting rich quick or crushing the competition or trendy management techniques. Instead, it was about using proven principles to conduct business in a mutually beneficial way.”

We approach governance with the desire to act responsibly in a spirit of mutual benefit. We focus on maximizing bottom-up solutions rather than top-down mandates, which puts the focus on (and provides opportunities to) individuals rather than hierarchies. Our compliance standards and risk management systems are geared toward helping employees make good decisions. We audit frequently to make sure our systems are resilient.

Yes, we believe our words and commitments matter. That’s why we seek employees and partners who strive to act consistently with our principles. The same is true for our approach to social and environmental priorities.