Corporate Governance

Strong corporate governance is a critical component to our success in driving sustained value. That’s why we’re working hard to ensure executive and Board-level transparency and accountability.

Corporate governance structure

The Allstate Board of Directors has ultimate responsibility for the conduct of the company. In 2013, our Board was composed of 12 members, including Thomas J. Wilson, who serves as Chairman of the Board, President and Chief Executive Officer of Allstate. Mr. Wilson has served as Chairman of Allstate since May 2008 and as President and Chief Executive Officer since January 2007.

The Board is responsible for selecting the Chairman of the Board and the Chief Executive Officer (CEO). Allstate’s Corporate Governance Guidelines allow the Board to apportion the responsibilities of these positions in any way that it considers to be in Allstate’s best interest. The Board believes such flexibility helps it adapt the leadership function to changing circumstances.

A lead independent director presides at all Board meetings, where the Chairman is not present, and at all executive sessions; serves as a liaison between the Chairman and the independent directors, when necessary, to provide a supplemental channel of communication; and works with the Chairman to provide the Board with meeting agendas, schedules and other relevant information. In conjunction with the chair of the Nominating and Governance Committee, he facilitates and communicates the Board’s performance evaluation of the CEO; facilitates the evaluation of the Board and director performance; and communicates with significant stockholders on matters involving broad corporate policies and practices.

The CEO meets at least annually with the Compensation and Succession Committee and the Nominating and Governance Committee to discuss succession planning and management development for senior executives. The senior leadership team is selected by the CEO and is responsible for the day-to-day management of the business. The Board acts as advisor to senior leadership and oversees its performance.

Allstate’s Board of Directors has adopted Director Independence Standards to ensure each director, with the exception of Mr. Wilson, is independent in accordance with Allstate’s Corporate Governance Guidelines. These Guidelines also include criteria used in selecting nominees for election to the Board. These criteria are periodically reviewed to ensure that they appropriately reflect the issues considered in evaluating director candidates. The Nominating and Governance Committee recommends criteria for assessment of the performance of the Board of Directors.

Each year, management reports to the Nominating and Governance Committee the Corporation’s Board compensation in relation to peer companies. No specific element of the Board’s compensation is directly based on the Corporation’s sustainability performance. To link compensation with corporate performance, a meaningful portion of each director’s compensation is provided in the form of restricted stock units, which currently provide for delivery of the underlying shares of Allstate common stock upon the earlier of the date of the director’s death or disability, or the date the director leaves the Board. Allstate maintains stock ownership guidelines for our non-employee directors. Within five years of joining the Board, each director is expected to accumulate an ownership position in Allstate securities equal to five times the value of the annual cash retainer paid for Board service.

A full description of the Corporation’s director compensation is provided in the Corporation’s annual proxy statement available on the Investor Relations page within the About Allstate section of our website.

Governance of sustainability

Allstate’s Office of Corporate Responsibility, which resides in the company’s Corporate Relations department, is responsible for managing sustainability, corporate responsibility and environmental reporting; strategic philanthropy; and companywide volunteer service. It reports regularly to our senior leadership team to keep them apprised of sustainability issues and initiatives.

In addition to the Corporate Responsibility team, our Sustainability Leadership Team, which is composed of officers and senior staff from all areas of the company, meets quarterly to review environmental efforts from an enterprise-wide perspective, build alignment, create momentum for Allstate’s heightened sustainability efforts and identify new opportunities associated with environmental responsibility and climate change.

Allstate’s Sustainability Leadership Team completes an annual review of the company’s operations, stakeholder expectations and competitive actions to identify internal opportunities related to climate change. The Team considers potential opportunities related to employee engagement, current and future sustainability-related regulation, improved operational efficiencies and customer and consumer expectations. Allstate’s Senior Vice President of Corporate Responsibility, who leads the Team, reports to senior leadership on the Team’s efforts and assessments. These results are then reported to the Board, when necessary.

More details regarding oversight can be found on the Risk Management page of this report.

ECC Monitor: OK