texas energy industry corporate governance diversity report 2014

Tom Furlong, Managing Director

Harvard Group International [email protected]

678.214.6065

Texas Energy Industry Top 100 Corporate Governance Diversity Report 2014

mailto:[email protected]

Contents Overview 2 Key Findings and Conclusions 4 Overall Board Demographics 5

Female Representation 6 Board Member Status Metrics 7 Industry Background 7 Education Background 9 Age 10 Length of Service 11 Outside Public Board Activity 12 Board Diversity Data & Methodology 13 MCV greater than $15 Billion 14 MCV between $5 Billion - $15 Billion 15 MCV between $2 Billion - $5 Billion 16 MCV between $500 Million - $2 Billion 17 About HGI and the author 19

Texas 2014 Energy Sector

Corporate Governance Diversity Report 2 Harvard Group International

Texas Market Cap Top 100

Anadarko Apache

Athlon Energy Atmos Energy

Atwood Oceanics Baker Hughes

Basic Energy Services Boardwalk Pipeline

Bristow Group Buckeye Partners

C&J Energy Services Cabot Oil & Gas

Calpine Cameron

CARBO Ceramics Carrizo

CenterPoint Energy Cheniere Energy

Clayton Williams Energy COBALT

Comstock Resources Concho Resources

ConocoPhillips Contango Oil & Gas

Crestwood Midstream Denbury Resources

Diamondback Energy Dril-Quip Dynegy

El Paso Electric Energy Transfer

Enterprise Products EOG Resources EXCO Resources

Exterran Partners Exxon Mobil

Flotek Industries FMC Technologies

Genesis Energy Goodrich Petroleum GulfMark Offshore Halcon Resources

Halliburton Helix Energy Solutions

Hercules Offshore Hi-Crush Partners

HollyFrontier Ion Geophysical

Jones Energy KBR

Texas 2014 Energy Sector Corporate Governance Diversity Report

Harvard Group International has long been involved with executive and board level search projects in multiple industries throughout North America. This report is a diversity analysis of the boards of the top 100 Market Capitalization Value (MCV) Texas-based publicly traded energy sector companies and is intended to provide corporate boards an overview of their composition relative to their peers. Texas is home to a wide variety of public energy corporations with a number of them being global leaders in terms of sales, employees, market cap, and reputation. As the Great Crew Change occurs in earnest, a new generation of executives will be needed to fill the governance roles that will soon become vacant. These changes will force boards to look at more diverse talent as the traditional “oil man” stereotype that has dominated the sector for decades rides off into the sunset. What comprises diversity? Gender and ethnicity are the most common definitions considered when discussing diversity and are important measures when developing a corporate board that resembles the general population. When providing leadership for the investors of publicly traded companies, other factors must also be considered when determining the level of board diversity: the more diverse the background of a board, the more reflective it becomes. A seven person board that includes two women might be considered “diverse” but if most/all board members are from the same two industries, have a similar educational background, and are in the same age group, then actually how diverse is that corporate board? Would they be able to recognize changes to the industry, company, or customer base and adequately represent the best interests of the shareholders? Or would it fall prey to collective “group think” and lose the ability to objectively address complex issues facing the company they represent? This report looks at a range of criteria when evaluating Board diversity as well as trends that might affect Board composition, including the size of company, location within the state, and industry in which the company operates. The diversity criteria used for this report includes:



Gender- Male/Female

Work background- Inside/Outside both the energy industry and the company’s energy sector

Education- Engineering/Geology, Business, or “Other”

Age

Length of Board Service

Other Public Board Activity The 100 largest Texas-based publicly traded energy were analyzed to gain a thorough understanding of the corporate governance landscape within the state. Since a primary concern for the Board of Directors is to look out for the concerns of the shareholder (and robust corporate governance is a priority of a Board of Directors), we feel that MCV is a true indicator for determining and ranking the companies included on this report. The focus of this study is on the Director composition of publically traded Texas-based firms: privately held companies, companies with more than 50% of the stock held by private equity groups, and divisions of out-of-state/foreign based conglomerates were not included in our research*. Master Limited Partnerships (MLP’s), which dominate the midstream sector, are included in this report. This survey looks at the Top 100 companies both collectively as a group as well as by MCV: Value greater than $15 billion (24 companies), $5 billion to $15 billion (20 companies), $2 billion to $5 billion (25 companies), and $500 million to $2 billion (31 companies). Generally, the smaller the company, the smaller and less diverse the Corporate Board becomes though several firms certainly go against this trend. This report will identify opportunities for all companies in all MCV cohorts to become more diverse with their Corporate Governance teams and through this effort increase their sales, profitability, and MCV as well as offering enhanced returns for their shareholder’s investments. * Three companies on this list (Nabors, Transocean, and Weatherford) are domiciled offshore but maintain their worldwide HQ’s and center of operations in Texas and are, for purposes of this study, included in the list of Texas-based corporations.

Texas Market Cap Top 100

Key Energy Services Kinder Morgan

Legacy Reserves Linn Energy

Magnum Hunter Resources Marathon Oil

Martin Midstream Matador Resources

McDermott Memorial Production

Midcoast Energy Nabors

National-Oilwell Varco Newfield Exploration Newpark Resources

Noble Energy NuStar Energy

Oasis Petroleum Oceaneering International

Oil States International Parker Drilling Patterson-UTI

Phillips 66 Pioneer Energy Services

Pioneer Natural Resources Plains All American Pipeline

QR Energy Quanta Services Range Resources

RigNet Rosetta Resources

RSP Permian Sanchez Energy Schlumberger

Southwestern Energy Spectra Energy

Summit Midstream Swift Energy

Targa Resources Tesco Tesoro

TETRA Technologies Transocean

Ultra Petroleum Valero Energy

Vanguard Natural Resources W&T Offshore Weatherford

Western Refining Willbros Group



Key Findings & Conclusions There are a several key findings from this study that the Energy industry as a whole and individual boards should consider:

The average size of a board for these Top 100 companies is 8.5 members- nearly a full seat lower than other industrial sectors in spite of much higher market capitalization

Women hold 70 (out of 845) board seats for an 8.3% participation rate- less than half the national participation rate of 16.9% for all public boards

Approximately 2/3 of board members (537) have undergraduate Business, Engineering, or Geological Sciences degrees

Almost 80% (673) of the board members come from the Energy or Financial Services industries

Just over 1/8 of all board members are over the age of 70; 40% are under the age of 60

16.8% (142) of board members have held their seat for over 13 years

Nearly 60% (482) of the board members sit on at least one other publicly traded corporate board

This report, in the subsequent sections, breaks out the above findings in much greater detail by the group as a whole, MCV cohorts, and individual company. There are also a number of options companies (and the industry) can utilize to create additional diversity among their corporate governance boards:

Boards (especially the 75 with less than ten directors) should add at least one additional member due to the high levels of investment capital in the industry

Qualified executives from industries outside the financial and energy sectors and educational backgrounds should be recruited to join these boards

Targeting “outside industry” executives will increase the talent pool of female executives to consider for nomination- offering a holistic (as opposed to a quota driven) method of increasing the number of women on these boards

Develop a higher sense of succession planning on boards to prepare for eventual retirements and (potentially) shareholder dictated term limit requirements

Utilize the expanded board seats to attract first time board members and reduce the overall percentage of directors sitting on multiple boards



Overall Company Demographics and Board Size The Energy industry in the state of Texas is comprised of seven sectors listed in the chart below. Every sector has at least one company in the four MCV categories with the exception of the IOC and Downstream sectors.

Energy Sector

All Companies > $15B $5B-$15B $2B-$5B $500M-$2B

Downstream 6 3 2 1 0

Integrated (IOC) 2 2 0 0 0

Midstream 14 4 2 5 3

Offshore 9 1 1 4 3

Oilfield Services 26 5 5 4 12

Upstream 37 8 7 10 12

Utilities 6 1 3 1 1

Total 100 24 20 25 31

The Houston area dominates the Energy industry with nearly 3/4 of the companies based in that market. There are companies from each MCV category in every metro market in the state with the exception of El Paso.

Metro Markets

All Companies > $15B $5B-$15B $2B-$5B $500M-$2B

Dallas/Fort Worth Metroplex 15 3 4 3 5

El Paso 2 0 0 1 1

Houston 73 19 14 19 21

Midland 5 1 1 1 2

San Antonio/Austin 5 1 1 1 2

Total 100 24 20 25 31

The Top 100 MCV Texas Energy public companies have a combined 845 directors who are responsible for the guidance and oversight of over $1.7 trillion in Market Cap Value, $1.3 trillion in annual sales, and a worldwide workforce of over 840,000 employees. The average size of a board is a fraction under 8.5 members; the average number of directors in the Texas Top 100 is lower (by nearly a full seat) from other industrial sectors in the Russell 3000 Index. One method these Top 100 boards can easily add diversity is simply by adding an additional seat and attracting an executive from an under-represented diversity category to the team.

Company Board Size # Directors All Boards > $15B $5B-$15B $2B-$5B $500M-$2B

10+ Directors 25 13 7 3 2

8 to 9 43 10 8 10 15

6 to 7 26 1 5 7 13

4 to 5 6 0 0 5 1

Total 100 24 20 25 31



Female Board Representation Currently 70 seats on the Texas Top 100 Energy boards are held by women- comprising 8.3% of all board seats for these companies. Catalyst (an organization that tracks female CEO’s and Board members) reported that, in 2013, women held 16.9% of all public board seats in the U.S.A. In another comparison, a 2014 study of the top 100 Georgia based public companies found that women hold 11.7% of these board seats in that state. The largest MCV company cohort has 30 women sitting on 237 seats for a 12.7% ratio- significantly off the 16.1% representation rate nationally among the Fortune 500 companies (of which many of the companies in this group belong). As companies become smaller in MCV, female board participation decreases both in numbers and ratio.

Board Composition by Women Status All Boards > $15B $5B-$15B $2B-$5B $500M-$2B

Women Serving 70 30 17 11 12

Total Board Seats 845 237 179 185 244

% Women Board Members 8.3% 12.7% 9.5% 5.9% 4.9%

Female board participation is highest with 16 companies that have two women on their boards; no company has more than two women serving at this time. The number of companies with women on their boards trends downwards as the MCV decreases. Nearly one half (46) of the companies in the Texas energy sector have no female board representation.

Board Female Representation # Women on Board All Boards > $15B $5B-$15B $2B-$5B $500M-$2B

Two 16 9 4 1 2

One 38 12 9 9 8

Zero 46 3 7 15 21

Total 100 24 20 25 31

% Boards w/ Women 54% 88% 65% 40% 32%

One reason for the lack of women participating on these boards is due to the high ratio of financial executives holding board seats (see next section for greater details). Most of these professionals come from the Private Equity arena which skews heavily towards male participation in spite of increasingly aggressive recruitment of women to join their firms. As more women progress through the financial silos to senior and CFO roles in both the Energy and other industries, the talent pool for female financial executives will increase. Discussion in further sections of this report will cover why these energy companies should look beyond financial executives when considering talent for their boards. By considering these additional backgrounds, the talent pool of qualified women executives increases dramatically. Initiating an overall diversity plan as well as adding additional seats to many of these boards should result in an increased number of women sitting on the corporate boards of the Texas Top 100 Energy companies.



Board Member Status Metrics Diversity among business experience is a major contribution a Corporate Board can offer to their company’s management team. This diversity of knowledge among board members helps insure that a company can remain abreast of changes in the overall economy and adapt the company’s direction to take best advantage as opportunities present themselves. The ability to bring successful business learnings from a variety of backgrounds is necessary to insure that management’s business plan is both well founded and executed.

1) Industry Background One avenue to help avoid collective “group think” is to insure the industrial background diversity on a corporate board. A board that has too many (or too few) Energy industry and sector insiders can become blind to outside influences that, on a macroeconomic scale, can have a severe impact on a company’s operations. The experiences an executive has gained in one industry can offer quality guidance and potential competitive advantage to the company they help govern. Of the 845 board members in the Top 100 companies, 457 (54.1%) come from the Energy industry with 266 (31.5%) coming from the same Energy sector as the company that they offer governance. The Financial industry is heavily represented on these boards: 216 members (25.6%) have a financial industry background.*

Director Industry Focus Status All Boards > $15B $5B-$15B $2B-$5B $500M-$2B

# Energy Industry 457 111 106 103 137

# Same Sector 266 65 66 64 71

# Financial Industry 216 52 35 58 71

# Other Industries 172 74 38 24 36

Total 845 237 179 185 244

% Industry Insiders 54.1% 46.8% 59.2% 55.7% 56.1%

% Sector Insiders (All) 31.5% 27.4% 36.9% 34.6% 29.1%

Over two thirds of the Texas Top 100 companies have at least 50% of their board members with energy industry experience. Only the largest MCV company segment falls below this ratio- half of the company boards in this group have a minority of board members from the Energy industry.

Board Composition of Energy Industry Insiders Status All Boards > $15B $5B-$15B $2B-$5B $500M-$2B

Industry Insiders < 50% 32 12 4 7 9

Industry Insiders 50%-60% 29 5 8 9 7

Industry Insiders > 60% 39 7 8 9 15

Total 100 24 20 25 31

* In this study, executives from the Private Equity, Institutional Investment, Public Accounting, and Banking fields are considered to come from the “Financial Industry”; CFO & CAO executives from Energy industry companies are considered to have an “Energy Industry” background.



Breaking down board members from the energy industry further, the ratio of executives from the same sector as the company they advise (i.e. executives with an Upstream background sitting on the board of an Upstream company) should be examined. There is a fairly even distribution among all MCV categories of the ratio of this board executive subset when compared to board members from the Energy industry.

Sector Insiders/Energy Industry Status All Boards > $15B $5B-$15B $2B-$5B $500M-$2B

Sector Insiders < 50% 32 9 4 6 13

Sector Insiders 50%-75% 36 7 10 10 9

Sector Insiders > 75% 32 8 6 9 9

Total 100 24 20 25 31

Though financial executives hold a quarter of all board seats throughout the Top 100 companies, the highest concentration sit on companies in the two smallest MCV categories. Private Equity and Institutional Investment Capital makes up a larger proportion of the total shareholder value in many of these companies which offers an explanation for this higher industrial background ratio.

Board Composition of Financial Sector Professionals Status All Boards > $15B $5B-$15B $2B-$5B $500M-$2B

Financial < 15% 36 10 10 5 11

Financial 15-25% 21 6 4 7 4

Financial > 25% 43 8 6 13 16

Total 100 24 20 25 31

It is important to have a number of board members with experience in the Energy sector and, due to the high amount of both shareholder value and capital expenditures, from the Financial sector; however, potential issues resulting from “group think” may arise when the large majority of board members come from only these two industries. Insights on how executives from similar MCV companies in other industries address common issues throughout the American marketplace (talent acquisition & retention, health care, changes in federal trade policy, and taxation to name a few) can help bring new insights that might not be considered by a narrowly-focused board. This added awareness can allow the board to help management teams anticipate and prepare for changes that might otherwise be overlooked during strategic planning sessions. Another area indicating a lack of diversity is the career functional silos of these board members. Of the 835 executives sitting on the Texas Top 100 board seats, less than 20 have a legal background; less than 10 have a marketing focus throughout the majority of their career; and only 6 come out of the human resources channel (and three of these executives are from executive search firms). Attracting more board members from these three disciplines can help address critical issues facing the energy industry:

Legal expertise to address both increased regulatory compliance and merger & acquisition activities

Marketing expertise to help address development of new customer/consumer channels

Human Resource expertise to develop strategies regarding the impending Great Crew Change and help maximize the contribution of human capital to the success of the organization



2) Education Background The Energy industry is a highly technical field throughout all of its sectors; the fact that many board members would have engineering or geology educational backgrounds should not be surprising. What is surprising is that there are over 100 more executives with a financial/business degree than with a technical background. Maybe this number shouldn’t be surprising given the high number of board members from the Financial industry, the large amount of capital involved in the Energy industry, and the relative lack of exposure from other industrial fields on the Top 100 boards.

Undergraduate Degree of Board Members Discipline* All Boards > $15B $5B-$15B $2B-$5B $500M-$2B

Engineering 218 60 54 36 68

Business 319 71 55 90 103

Other 308 106 70 59 73

Total 845 237 179 185 244

Additionally, a fair number board members have also earned a M.B.A. degree- future reports will also capture this information for analysis. *For this study, “Engineering” would be with anyone with a B.S. (or equivalent) degree in any of the engineering or geology majors. Any board member with a B.B.A. degree or B.A. in Accounting, Business, or Finance fall into the “Business” category. Board members with an education background outside of the “Engineering” and “Business” disciplines (such as chemistry, mathematics, or could not be determined from research) were placed in the “Other” group.



3) Age While the age of a Board Director at first glance might not indicate a measure of diversity, having a broad range of experience levels can offer differing perspectives that might impact the guidance given to their company’s management teams. There is value in the saying that “Old School is still the Best School” because of the mentoring capabilities that Baby Boomer board members can offer to younger management teams. At the same time, having board members in the same age cohort as the management teams they advise offers shared life experiences from the rising tide of Generation X/Y leaders in the industry. Currently over half of board members in the U.S. Fortune 1000 companies are over 65 years of age; nearly 2/3 of this group plan to step down from their roles within the next four years. Companies in the Texas Top 100 need to prepare for board turnover as well; boards that are skewed with too many members over age 70 risk having a rapid drain of experience on their boards due to retirements.

Age of Directors Status All Boards > $15B $5B-$15B $2B-$5B $500M-$2B

< 60 Years 339 77 62 90 110

60-70 Years 399 126 96 75 102

> 70 Years 107 34 21 20 32

Total 845 237 179 185 244

One advantage of having a plurality of directors in the 60-70 age cohort is that many are either no longer holding an executive role, working a reduced schedule, or are using board service as a their late-stage career track. Just over 35% of all board members fall into this “inactive work status category”. There are advantages to having a certain number of board participants from this work status group: these members are able to devote more than the average 250 hours/year that quality board service requires and can offer near-full time attention during a company crisis or other special situations.

Working Status of Directors*

All Boards > $15B $5B-$15B $2B-$5B $500M-$2B

# Active 535 135 115 119 166

# Inactive 310 102 64 66 78

Total 845 237 179 185 244

% Active 63.3% 57.0% 64.2% 64.3% 68.0%

* Designating working status relies (somewhat) on a subjective analysis; the data in this chart should be regarded as a general rather than an absolute view. For this reason, director working status is not included in the six diversity criteria listed on the detailed company breakouts found at the end of this report.



4) Length of Board Service

Diversity of Board tenure is an area of increasing scrutiny as it showcases the turnover (or lack thereof) among the corporate governance team. According to a study published by the Harvard Business Review in April 2014, U.S. corporate boards that replaced on average 1 director per year yielded higher share returns than those with higher or lower turnover rates. Boards with heavy turnover and low years of cumulative service may have difficulty in developing continuity with the advice they offer a management team. Conversely, boards with no turnover may become “too close” to their management teams and lose objective oversight. Currently 142 of the 845 Texas Top 100 board members (16.8%) have service tenure over 13 years; this ratio is fairly consistent across all MCV groups. 397 board members (47.0%) have less than 6 years tenure with their boards- a number slightly skewed since 10 companies on this list only became public during the last six years.

Length of Service Tenure All Boards > $15B $5B-$15B $2B-$5B $500M-$2B

< 6 Years 397 108 75 102 112

6 - 13 Years 306 79 73 65 89

> 13 Years 142 50 31 18 43

Total 845 237 179 185 244

A concern with long-tenured board members is that they may tend to view themselves as part of management and not as an advocate for the shareholders. ISS (a leading consultancy on proxy and corporate governance issues) is considering labeling board members with tenures over 13-15 years as an “affiliated outside director” which would lower proxy support recommendation scores. A board with one or two long-tenured board members can offer an historical perspective that might benefit the organization; a higher number might lead to complacency among the board and reduce the confidence shareholders place in both the board and the company’s management team.

Board Composition of Long-tenured (over 13 years) Directors


# Long-tenured > 2 22 8 6 2 6

# Long-tenured = 2 22 6 3 5 8

# Long-tenured < 2 56 10 11 18 17

Total 100 24 20 25 31

As the Top 100 Energy companies look to add seats to their boards and long-tenured directors retire from their positions, the number of short-tenured directors will continue to increase in the next few years. A key metric to view through the remainder of the decade is the turnover rate of these short-tenured directors: a low turnover rate would indicate the boards are selecting the proper nominees as part of the Great Crew Change.



5) Outside Public Board Activity There is an old Corporate Governance saying that rings true with the Texas Top 100: the best way to get on a Corporate Board is to serve on a Corporate Board. Currently 482 out of 845 board seats (57.0%) are held by a person who sits on another public board, with 307 of these 482 (63.7%) sitting on the board of another energy industry company. The trend for multiple board service is highest among members of the largest MCV companies- but note that a majority of these directors sit on boards outside the energy industry.

Directors Sitting on Other Boards


# on Multiple Boards 482 146 109 105 122

# on Energy Sector Boards 307 70 77 75 85

All Board Members 845 237 179 185 244

% on Multiple Boards 57.0% 61.6% 60.9% 56.8% 50.0%

% on Energy Sector Boards 36.3% 29.5% 43.0% 40.5% 34.8%

Multiple board service can offer a director exposure with two (or more) dynamic teams and possibly increase the worth of the advice they offer a management team. On the other hand, many fledgling directors and director-level candidates hold a high executive position at their current employer and a corresponding high level of interaction with the board team to which they report. This preparatory board exposure can compensate for a lack in previous board experience when evaluating director candidates- a key consideration as the pool of experienced board talent diminishes while the demand increases in the future. There are potential negatives with “over boarded” directors (directors sitting on five or more publicly traded companies) including lack of focus, time available to devote to crisis situations, and potential conflicts of interest. Several of the “over boarded” directors identified in this report are active employees of private equity firms: the amount and quality of oversight they offer the management teams they advise might be compromised by the short term goals of their PE firm- goals which might be at odds with the long term goals of institutional and individual investors. “Over Boarding” might also be an issue with directors who sit on multiple non-profit organization boards. It is an honorable attribute to share executive leadership with community organizations- as long as this service does not compromise the necessary time commitment to their public board service. Non-profit board experience is a good training avenue for the executive looking for their first public governance role but, once seated on a public board, might need to balance their volunteer activities with their corporate obligations.



Board Diversity Data- Company Breakouts The following pages break down the Texas Top 100 Energy public companies by Market Cap Value into the four broad groups outlined throughout this report: MCV greater than $15 billion, $5 billion to $15 billion, $2 billion to $5 billion, and $500 million to $2 billion. The various charts show the total number of directors and the break-out by gender, industrial background (and a subset of boards members from the same energy sector), undergraduate education background, age, length of board service, and number of directors sitting on other company boards (with the number sitting on energy company boards as a subset). A few notes about the methodology used for this report:

Market Cap Values listed were of July 3, 2014. The values were obtained from OneSource Information Services which calculates MCV by multiplying the closing stock price on Friday (or the last trading session of the week) by the number of outstanding shares of common stock. This date was chosen due to its close proximity after the close of 2Q2014.

The directors serving on a company’s board were taken from the website of each listed company on July 1, 2014.

The demographic and other status criteria of the directors were gained through research including reviewing the company’s websites and most recent proxy statements, LexisNexis and search engine review of the directors, LinkedIn profile reviews, and personal contact.

Changes that may have occurred between the compilation of data and the publication date of this report are not reflected in either the commentary in the preceding pages or the following graph data.

Great effort has been made to verify the accuracy of the data in this report. Any errors or omissions are purely unintentional. Please contact the author of this report should any perceived discrepancies exist so the data can be amended for future reports.



Market Cap Value over $15 Billion

Gender

Industry Background

Education Age Service Length Outside Board Roles

Marke

t Cap

Valu

e

(millio

ns)

# Dire

ctors

Male

Female

Ene

rgy

Co

mp

any Secto

r

Finan

cial

Oth

er

Eng/G

eolo

gy

Bu

sine

ss

Oth

er

< 60

Ye

ars

60

- 70

Ye

ars

> 70

Ye

ars

< 6 Y

ears

6 - 1

3 Y

ears

> 13

Ye

ars

Oth

er B

oard

s

Ene

rgy Secto

r

Anadarko 54,334 9 8 1 4 4 1 4 1 2 6 5 4 0 6 2 1 8 5

Apache 38,582 10 8 2 5 5 4 1 0 3 7 5 2 3 5 0 5 4 3

Baker Hughes 30,004 11 9 2 6 2 2 3 2 0 9 2 4 5 3 6 2 8 4

Cheniere Energy 17,253 13 12 1 6 2 5 2 4 3 6 3 7 3 5 3 5 7 5

Concho Resources 16,041 9 9 0 5 3 3 1 3 6 0 5 4 0 3 6 0 4 2

ConocoPhillips 106,074 10 8 2 4 4 1 5 2 3 5 4 5 1 5 3 2 7 2

Energy Transfer 31,677 7 7 0 5 2 1 1 1 1 5 5 0 2 3 4 0 3 2

Enterprise Products 72,777 9 8 1 6 3 1 2 0 3 6 2 4 3 1 6 2 2 1

EOG Resources 63,805 8 7 1 6 6 1 1 3 3 2 1 4 3 2 4 2 5 4

Exxon Mobil 440,560 12 10 2 1 1 1 10 3 3 6 2 9 1 7 4 1 10 0

Halliburton 59,936 11 9 2 6 2 1 4 5 2 4 2 8 1 6 4 1 11 5

Kinder Morgan Inc 36,645 11 10 1 7 4 3 1 3 1 7 4 6 1 2 6 3 3 3

Marathon Oil 27,260 8 7 1 5 2 0 3 4 1 3 3 5 0 4 3 1 7 4

National-Oilwell Varco 35,620 9 8 1 4 1 2 3 2 5 2 5 4 0 2 4 3 6 2

Noble Energy 27,341 11 10 1 5 1 4 2 4 1 6 2 9 0 3 5 3 3 3

Phillips 66 46,116 8 6 2 2 2 2 4 2 1 5 3 5 0 8 0 0 7 2

Pioneer Nat Res 32,183 13 11 2 8 6 1 4 6 3 4 5 5 3 8 3 2 6 2

Plains All American 21,261 8 7 1 3 2 5 0 1 7 0 4 3 1 3 0 5 6 4

Schlumberger 153,008 11 9 2 2 1 2 7 3 2 6 4 6 1 6 5 0 7 1

Southwestern Energy 15,885 8 7 1 5 4 1 2 4 1 3 3 4 1 6 1 1 2 2

Spectra Energy 28,417 10 9 1 5 2 2 3 1 3 6 1 8 1 3 7 0 10 5

Transocean 16,059 11 10 1 5 1 4 2 4 4 3 4 7 0 8 1 2 7 4

Valero Energy 27,215 11 9 2 2 2 2 7 1 6 4 3 6 2 5 2 4 5 1

Weatherford 16,059 9 9 0 4 3 3 2 1 7 1 0 7 2 4 0 5 8 4

Total 1,414,107 237 207 30 111 65 52 74 60 71 106 77 126 34 108 79 50 146 70



Market Cap Value between $15 Billion and $5 Billion

Gender

Industry Background


Marke

t Cap

Valu

e

(millio

ns)

# Dire

ctors

Male

Female

Ene

rgy

Co

mp

any Secto

r

Finan

cial

Oth

er

Eng/G

eolo

gy

Bu

sine

ss

Oth

er

< 60

Ye

ars

60

- 70

Ye

ars

> 70

Ye

ars

< 6 Y

ears

6 - 1

3 Y

ears

> 13

Ye

ars

Oth

er B

oard

s

Ene

rgy Secto

r

Atmos Energy 5,067 11 10 1 3 2 4 4 1 1 9 2 8 1 3 5 3 3 2

Buckeye Partners 9,472 9 8 1 6 3 2 1 0 5 4 5 3 1 4 5 0 4 2

Cabot Oil & Gas 14,576 7 7 0 5 3 0 2 1 1 5 1 4 2 3 3 1 6 5

Calpine 9,700 9 8 1 4 4 2 3 3 4 2 6 3 0 4 5 0 6 2

Cameron 14,026 11 10 1 8 5 0 3 3 4 4 3 6 2 4 4 3 8 6

CenterPoint Energy 10,645 9 7 2 4 1 4 1 0 4 5 4 5 0 4 4 1 6 2

COBALT 7,499 9 8 1 6 3 2 1 5 2 2 4 5 0 6 3 0 6 5

Denbury Resources 6,418 10 9 1 5 5 4 1 3 2 5 2 8 0 4 4 2 7 7

FMC Technologies 14,309 12 10 2 9 2 1 2 6 3 3 2 8 2 5 7 0 11 7

HollyFrontier 8,782 9 9 0 5 1 2 2 2 4 3 3 6 0 5 2 2 6 5

Linn Energy LLC 10,704 6 6 0 5 5 0 1 3 2 1 4 2 0 3 3 0 4 4

Nabors 8,935 8 8 0 4 3 1 3 1 1 6 3 3 2 7 0 1 4 4

Newfield Exploration 5,943 11 9 2 6 6 3 2 6 3 2 3 7 1 4 4 3 5 4

Oasis Petroleum 5,660 7 7 0 6 5 1 0 5 2 0 4 2 1 4 3 0 4 4

Oceaneering Int'l 8,355 7 7 0 4 3 1 2 3 2 2 1 4 2 2 2 3 4 2

Patterson-UTI 5,199 7 7 0 4 3 2 1 2 3 2 2 4 1 1 2 4 2 2

Quanta Services 7,696 10 9 1 4 2 1 5 3 4 3 5 3 2 2 6 2 7 4

Range Resources 14,469 9 8 1 5 4 3 1 5 0 4 1 7 1 2 2 5 3 3

Targa Resources 5,997 8 7 1 7 3 1 0 1 4 3 4 3 1 3 5 0 3 3

Tesoro 7,836 10 8 2 6 3 1 3 1 4 5 3 5 2 5 4 1 10 4

Total 181,287 179 162 17 106 66 35 38 54 55 70 62 96 21 75 73 31 109 77



Market Cap Value between $5 Billion and $2 Billion

Gender

Industry Background


Marke

t Cap

Valu

e

(millio

ns)

# Dire

ctors

Male

Female

Ene

rgy

Co

mp

any Secto

r

Finan

cial

Oth

er

Eng/G

eolo

gy

Bu

sine

ss

Oth

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< 60

Ye

ars

60

- 70

Ye

ars

> 70

Ye

ars

< 6 Y

ears

6 - 1

3 Y

ears

> 13

Ye

ars

Oth

er B

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s

Ene

rgy Secto

r

Athlon Energy 4,665 6 6 0 2 2 4 0 0 5 1 6 0 0 6 0 0 4 4

Atwood Oceanics 3,077 8 7 1 5 4 2 1 2 1 5 3 4 1 4 2 2 4 4

Boardwalk Pipeline 4,449 7 7 0 3 3 4 0 0 2 5 1 5 1 2 5 0 5 2

Bristow Group 2,855 10 9 1 5 3 3 2 2 5 3 3 7 0 5 5 0 5 2

CARBO Ceramics 3,461 8 8 0 5 1 3 0 2 2 4 3 2 3 2 4 2 6 5

Carrizo 3,152 7 7 0 4 3 2 1 1 5 1 2 3 2 1 2 4 5 5

Crestwood Midstream 4,121 8 8 0 5 1 3 0 1 4 3 5 3 0 4 2 2 7 7

Diamondback Energy 4,511 5 5 0 2 2 1 2 1 4 0 3 2 0 5 0 0 4 2

Dril-Quip 4,434 5 5 0 3 2 2 0 4 1 0 3 1 1 2 3 0 1 1

Dynegy 3,354 7 6 1 4 3 3 0 1 3 3 6 0 1 7 0 0 4 3

Exterran Partners 3,013 9 9 0 4 2 4 1 1 6 2 4 5 0 6 3 0 6 3

Genesis Energy 4,885 8 7 1 3 3 4 1 0 5 3 4 3 1 5 3 0 5 1

Halcon Resources 3,095 12 12 0 3 2 8 1 2 7 3 5 6 1 12 0 0 6 4

Helix Energy Solutions 2,766 7 6 1 4 1 2 1 1 3 3 5 1 1 2 3 2 4 4

Hi-Crush Partners 2,093 10 10 0 6 3 3 1 3 4 3 5 5 0 10 0 0 4 3

KBR, Inc. 3,475 8 7 1 5 4 0 3 5 3 0 2 5 1 3 5 0 6 5

Matador Resources 2,086 8 7 1 4 2 1 3 2 4 2 2 6 0 4 4 0 3 2

NuStar Energy 4,985 6 6 0 3 1 1 2 0 3 3 1 3 2 2 3 1 1 1

Oil States International 3,415 8 7 1 6 2 1 1 1 6 1 2 5 1 1 4 3 6 6

Rosetta Resources 3,331 7 5 2 6 2 1 0 3 3 1 6 1 0 4 3 0 3 2

RSP Permian 2,195 8 8 0 6 6 2 0 3 3 2 7 0 1 8 0 0 3 3

Sanchez Energy 2,100 5 5 0 2 2 1 2 0 4 1 3 1 1 5 0 0 2 1

Ultra Petroleum 4,499 5 5 0 4 3 1 0 1 3 1 1 3 1 1 2 2 3 2

Vanguard Natural Resources 2,529 4 4 0 4 3 0 0 0 0 4 1 3 0 0 4 0 1 1

Western Refining 4,082 9 8 1 5 4 2 2 0 4 5 7 1 1 1 8 0 7 2

Total 86,624 185 174 11 103 64 58 24 36 90 59 90 75 20 102 65 18 105 75



Market Cap Value between $2 Billion and $500 Million (page 1)

Gender

Industry Background


Marke

t Cap

Valu

e

(millio

ns)

# Dire

ctors

Male

Female

Ene

rgy

Co

mp

any Secto

r

Finan

cial

Oth

er

Eng/G

eolo

gy

Bu

sine

ss

Oth

er

< 60

Ye

ars

60

- 70

Ye

ars

> 70

Ye

ars

< 6 Y

ears

6 - 1

3 Y

ears

> 13

Ye

ars

Oth

er B

oard

s

Ene

rgy Secto

r

Basic Energy Services 1,277 9 9 0 5 4 3 1 2 6 1 4 4 1 2 5 2 6 4

C&J Energy Services 1,789 7 6 1 4 3 3 0 1 2 4 6 1 0 5 1 1 3 1

Clayton Williams Energy 1,665 6 6 0 5 3 1 0 2 1 3 1 1 4 0 3 3 2 2

Comstock Resources 1,372 9 7 2 4 0 0 5 1 6 2 5 2 2 3 2 4 3 1

Contango Oil & Gas 825 7 7 0 5 4 1 1 2 3 2 2 5 0 1 6 0 2 2

El Paso Electric 1,571 12 10 2 1 1 7 4 0 3 9 4 8 0 4 1 7 6 0

EXCO Resources 1,544 7 7 0 2 1 5 0 1 4 2 3 1 3 2 3 2 6 4

Flotek Industries 1,719 7 6 1 5 2 1 1 2 3 2 3 2 2 6 0 1 4 3

Goodrich Petroleum 1,121 9 9 0 2 2 6 1 1 3 5 5 2 2 2 5 2 3 0

GulfMark Offshore 1,203 8 8 0 4 1 4 0 1 3 4 1 4 3 4 3 1 4 3

Hercules Offshore 668 9 8 1 6 2 3 0 3 5 1 1 7 1 0 9 0 7 7

Ion Geophysical 704 8 8 0 7 1 0 1 5 2 1 3 4 1 4 2 2 5 5

Jones Energy Inc 904 6 6 0 3 2 3 0 3 2 1 5 1 0 6 0 0 4 4

Key Energy Services 1,410 10 9 1 3 1 5 2 0 3 7 6 3 1 1 6 3 7 4

Legacy Reserves LP 1,782 7 7 0 7 6 0 0 4 3 0 3 2 2 0 7 0 3 3

Magnum Hunter 1,619 7 7 0 4 3 2 1 2 4 1 3 4 0 5 2 0 4 3



Market Cap Value between $2 Billion and $500 Million (page 2)

Gender

Industry Background


Marke

t Cap

Valu

e

(millio

ns)

# Dire

ctors

Male

Female

Ene

rgy

Co

mp

any Secto

r

Finan

cial

Oth

er

Eng/G

eolo

gy

Bu

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ss

Oth

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< 60

Ye

ars

60

- 70

Ye

ars

> 70

Ye

ars

< 6 Y

ears

6 - 1

3 Y

ears

> 13

Ye

ars

Oth

er B

oard

s

Ene

rgy Secto

r

Martin Midstream 1,113 9 9 0 5 5 3 1 1 6 2 4 4 1 5 2 2 1 0

McDermott 1,896 8 7 1 6 1 2 0 3 2 3 4 4 0 6 2 0 6 5

Memorial Production 1,449 7 7 0 3 1 4 0 1 4 2 4 3 0 7 0 0 3 3

Midcoast Energy 1,005 8 8 0 7 2 0 1 4 0 4 4 4 0 8 0 0 5 5

Newpark Resources 1,056 7 7 0 5 4 0 2 4 1 2 2 4 1 2 5 0 4 3

Parker Drilling 844 9 9 0 6 2 3 0 1 6 2 4 3 2 3 4 2 4 4

Pioneer Energy Services 1,121 5 5 0 4 2 1 0 2 2 1 1 4 0 0 2 3 1 1

QR Energy 1,219 8 8 0 5 4 3 0 3 5 0 5 2 1 8 0 0 4 3

RigNet 993 9 9 0 2 2 3 4 2 5 2 8 1 0 8 1 0 4 1

Summit Midstream 1,884 9 8 1 4 1 3 2 0 7 2 7 2 0 9 0 0 3 2

Swift Energy 563 7 6 1 4 3 1 2 3 2 2 2 4 1 0 5 2 1 0

Tesco 821 8 8 0 5 1 1 2 3 4 1 3 4 1 3 3 2 6 4

TETRA Technologies 935 9 9 0 7 4 1 1 5 2 2 3 4 2 4 2 3 4 3

W&T Offshore 1,228 6 5 1 2 1 1 3 2 3 1 3 2 1 1 4 1 4 2

Willbros Group 630 7 7 0 5 2 1 1 4 1 2 1 6 0 3 4 0 3 3

Total 37,931 244 232 12 137 71 71 36 68 103 73 110 102 32 112 89 43 122 85



About Harvard Group International Harvard Group International (HGI) is an Atlanta-based executive search firm that has been helping clients build their future since 1996. The firm was founded with the premise of offering the highest standards of executive search while possessing the nimbleness of a specialized consultancy. HGI leads the industry with a retained search project completion rate of over 99% and exceptional speed of service: over 90% of all candidates placed are presented to the client within the first 30 business days of the search project. Client satisfaction remains high with previous clients accounting for over two-thirds of all search projects. Part of that satisfaction rests in exclusivity: HGI represents only 10% of the companies within an industrial sector, allowing for larger pools from which to attract talent and a strict “hands-off” policy for all divisions and business units of a client company. HGI repeatedly demonstrates its value as a partner, not just a vendor, to its numerous clients. HGI has successfully completed search projects in multiple industries throughout North America. The broad range of practice sectors served includes academia, aerospace, automotive, corporate governance, energy, engineering, financial services, food processing, information technology, life sciences, manufacturing, metallurgy and metal fabrication, non-profit, oil & gas, retail, and sports management. HGI directs its team of 40 search professionals (and over 350 years of search industry experience) to attract best-in-class talent for board director appointments, C-Suite, and senior/junior executive positions as well as key individual contributor roles. Clients of all sizes, from multinational conglomerates to start ups with fewer than 20 employees, have benefitted from the expertise provided by the Harvard Group International team.

About the Author Tom Furlong is the Managing Director of the firm’s Energy and Oil & Gas practice and also works on HGI’s Corporate Governance team. He has over 15 years of search industry experience and has successfully led executive search projects throughout North America and Asia. Tom brings a unique style of combining individual respect with expertise to his work, helping to differentiate both himself and Harvard Group International from other search professionals. He has shared his expertise through presentations to Energy industry and executive groups on a variety of leadership and career guidance topics. Tom also draws upon his corporate experience of working for 13 years with Novartis to understand the inner workings of both global operations and the individual teams that give strength to multi-national corporations.

Contact Information: Harvard Group International 1640 Powers Ferry Road Building 25 Marietta, Georgia 30067-1444 p: (404) 459-9045 w: www.harvardsearch.com t: @harvardsearch

Tom Furlong Managing Director p: (678) 214-6065 e: [email protected] t: @TerrellMillTom

http://www.harvardsearch.com/

mailto:[email protected]

texas energy industry corporate governance diversity report 2014

Business

board composition

level of board diversity

board of directors

person board

energy industry

traded energy sector

public board activitythe

traded companies