Governance Practices

The Board of Directors and management of Travelers are committed to implementing sound corporate governance practices with the goal of ensuring that the company operates ethically and with integrity and is managed to maximize the long-term interests of its shareholders.

Approach

Our commitment to good corporate governance is reflected in our Governance Guidelines, which describe the Board’s views on a wide range of governance topics. These Governance Guidelines are reviewed annually by the Nominating and Governance Committee, and any changes deemed appropriate are submitted to the full Board for its consideration. Our Proxy Statement discusses our robust corporate governance practices, which are designed to support sustained value creation for our shareholders.

The Board works with management to set the short-term and long-term strategic objectives of our company and to monitor progress on those objectives. Strategic topics are generally discussed at each Board meeting, and the Board and management participate in a separate strategy session each year. In setting and monitoring strategy, the Board, along with management, considers the risks and opportunities that impact the long-term sustainability of our business model and whether the strategy is consistent with our core values, culture and risk appetite. The Board regularly reviews:

• Our progress with respect to our strategic goals.
• The risks, including the environmental, social and governance (ESG) risks, that could impact the long-term sustainability of our business.
• The related opportunities that could enhance our long-term sustainability.

The Board oversees these efforts in part through its standing committees, based on each committee’s responsibilities and areas of expertise. Each committee regularly reports to the Board regarding its areas of oversight responsibility. The Board has allocated and delegated risk oversight responsibility to its committees in accordance with the following principles:

Each Board committee has a written charter, which contains specific responsibilities, including the risk oversight functions listed above.

With a focus on continually improving the ability of the Board to provide informed oversight, the Nominating and Governance Committee oversees educational sessions for directors on matters relevant to our company, business strategy and risk profile. For example, topics of those sessions have focused on the role that corporate culture and board oversight played in publicized lapses in corporate governance at other firms.

The Board and each of its committees evaluate the allocation of oversight responsibility at least annually, along with their respective performance and effectiveness.

To learn more about the specific risk oversight functions delegated to each Board Committee and our Enterprise Risk Management activities, see the Capital & Risk Management section of this site, and view our Proxy Statement to see specific Board Committee responsibilities.

Management and oversight of sustainability matters

With respect to oversight of ESG-related risks and opportunities, each committee is assigned responsibility for oversight of matters most applicable to its charter responsibilities. We believe that allocating responsibility to a committee with relevant knowledge and experience improves the effectiveness of the Board’s oversight. For example, as indicated above, the Audit Committee oversees risks related to regulatory and compliance matters; the Compensation Committee oversees implementation of our pay-for-performance philosophy and practices designed to ensure equitable pay across the organization; the Nominating and Governance Committee oversees our workforce diversity and inclusion efforts, public policy initiatives and community relations; and the Risk Committee oversees strategies pertaining to management of catastrophe exposure, changing climate conditions and information technology, including cybersecurity.

In addition, our Chief Sustainability Officer and our management-level ESG Committee – a multidisciplinary committee consisting of senior company executives that meets at least quarterly – drive the prioritization and management of, and reporting on, sustainability issues. We also regularly engage with our investors, our customers, our employees, our agents and brokers, regulators, rating agencies and other stakeholders on business issues and the ESG topics of interest to them.

To learn more about our shareholder engagement, including with respect to ESG matters, please see our Proxy Statement.

To learn more about our stakeholder engagement and how we identify our priority sustainability topics, see the About Our Sustainability Reporting section of this site.