Politics in Oil and Gas: Analysis of Conoco Philips' Strategic Approach

This report analyzes Conoco Philips' strategic approach by emphasizing on different identified themes such as reputation management, corporate governance, corporate social responsibility and ethics, and boardroom organization. It also discusses similarities and differences between the identified themes and those expected in other industries, examples of proactive and reactive measures used by the company, and potential ways of mitigating behavioral challenges.

Running head: POLITICS IN OIL AND GAS
Politics in oil and gas
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction:...............................................................................................................................2
Discussion:.................................................................................................................................2
Governance structure of organisation:.......................................................................................2
Similarities and differences between the identified themes and those expected in other
industries:...................................................................................................................................5
Examples of proactive and reactive measures used by company:.............................................8
Boardroom politics:....................................................................................................................9
Ethical matters:.........................................................................................................................10
Behavioral challenges and potential ways of mitigating them:...............................................11
Conclusion:..............................................................................................................................13
References list:.........................................................................................................................13

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Introduction:
The report is prepared for critically analyzing the strategic approach of company by
emphasizing on different identified themes. These themes include reputation management,
corporate governance, corporate social responsibility and ethics and boardroom organization.
The selected organization for the purpose of analysis is Conoco Philips which is the largest
independent multinational energy corporation based on proved and production reserves. It
carries out operations in seventeen countries while being committed to effective and efficient
production and exploration of oil and natural gas. The organisation has long history of proud
and long history of producing and finding oil and gas (conocophillips.com 2018). Report is
prepared for demonstrating the similarities and differences between several themes and
illustrations of proactive and reactive measures taken by company. In addition to this,
governance structure of company and potential ways of mitigating the behavioral challenges
has been explained.
Discussion:
Governance structure of organisation:
Conoco Philips has effective and clear governance structure concerning sustainable
development which extends from executive leadership and board of directors to the field of
operations. The structure of corporate governance is supported by approach of management
system with standards, policies and practices for assessment of social and environmental
risks. The corporate governance structure of Conoco Philips comprised of four board
committees, board of directors and team of executive leadership. For addressing the key
sustainability issues such as stakeholder engagement, overall implementation, climatic
change, human rights, water and bio diversity, organization has champion of executive

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leadership team (conocophillips.com 2018). The safety, health and environment leadership
team and sustainable development leadership team reviews the goal setting, strategic
planning, implementation performance and reporting. Leaders of stakeholder engagement
comprise of operational leader and senior functional team across the business. Conoco Philips
has a sustainable and environmental development steering committee of internal experts by
advising on key sustainability issues (Dinkpa 2016).
Organisational structure
(Source: conocophillips.com 2018)
The positions on issues of public policy such as climatic change and matters
impacting the reputation of company as responsible corporate citizen including reporting and

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sustainable development performance is overseen by the public policy committee of board of
directors. Compliance with the practices and programs of company along with safety, health
and protection of environment including water, climatic change and bio diversity
management is monitored by committee along with making recommendations to the board
(Bonica 2016).
The committee comprise of independent directors that is comprehensively updated on
annual basis that is updated on performance of sustainable development and convenes at least
quarterly. Regarding to the key aspects to the sustainability approach, there is a four
executive leadership team members that advices, provides direction and leadership to the
progress (Stewart and James 2017).
Sustainable development leadership team comprise of functional leaders and top
global business that provide approval and consultation for the areas of sustainable
development, priorities, action plan, goals and results. The vice president of global health,
safety and environment sits on Sustainable development leadership team.
The team of health, safety and environment comprise of functional and business
managers across the company. For sharing earnings and reviewing performance, a standing
monthly meeting is held by the team and the team is responsible for implementing
companywide initiatives. Health, safety and environment leadership team is advised by
sustainable and environment development steering committee on matters such as technology
and key environmental issues.
Sustainable development team- A framework is provided by the sustainable
development group of company for sustainability implementation, regular engagement with
executive and business leadership and reporting in sustainable development. Such framework
provides long range of strategy and corporate planning. The group is also responsible for

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reporting in sustainable development, addressing the risk and opportunities of company,
performance, commitments and external management. Directors within the corporate teams
are responsible for dealing with key sustainability topics such as supply chain sustainability,
water, biodiversity, climatic change, modeling, risk management and life cycle analysis,
social responsibility and stakeholder engagement (Breul and Diez 2018). The success and
implementation of governance relies on active engagement by subject matters, practitioners
and leaders throughout the organization. Conoco engages with the structure of network
excellence, discussion forums and issue working groups and public policy issue working
groups for the purpose of capacity building and alignment. It is well understood by
organization that for many issues, the alignment between positions of public policy advocacy
and sustainable development positions is important. In order to ensure alignment between
these two elements, public policy and sustainability development leaders participate in cross
cutting issue working groups.
Similarities and differences between the identified themes and those expected in other
industries:
Corporate governance- The principles and practices of corporate governance deals
with the identification of responsibilities and distribution rights among several participants in
the corporation such as creditors, shareholder, regulators, auditors and board of directors. The
structure of corporate governance in an organization is established for providing a framework
that helps in ensuring accurate and timely disclosure of material matters enhancing
accountability to stakeholders and maintaining high standards of integrity business ethics.
Reputation management- Reputation management is about controlling and
influencing the reputation of group by taking appropriate steps for ensuring that the general
consensus aligns with the goals of organization. Reputation management in oil and gas

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industry has considerable impact on the future business relations and financial indicator of
company.
Corporate social responsibility and ethics- Corporate social responsibility refers to
the requirement of business to be a good corporate citizen by going beyond the laws in
contributing to social welfare and protecting the environment.
Boardroom organization- The dynamics of boardroom refers to interplay between three
aspects of governance that is culture, governance structure and behaviors. Culture of
governance deals with the power structure of boardroom. Structure of governance deals with
the context of power structure of boardroom. Governance behavior is the third governance
dynamics in the boardroom.
The integrity and reputation of Conoco Philips is dependent on each officer,
employee, director and all individual working on maintenance of personal responsibility for
personal business conduct. Reputation of Conoco as good corporate citizen is protected and
enhanced by making contribution at local levels to meet the unique needs of community.
Efforts of organization in fiscal year 2017 ranged from safeguarding flyways of threatened
crane species to building a community basketball along with supporting the efforts
concerning recovery after mudslides in Colombia. Furthermore, strategic community
investment is made by company that helps in measurably and meaningfully addresses the
vital issues at global and local level. Charitable investment strategy of organization is built
around three pillars of employee programs, signature programs and local contributions that
are informed by integrated planning.
The themes relating to strategic approach of industry other than oil and gas industry
might be related to factors that intends to improve the performance of organization apart from
being corporate socially responsible. In service industry, the strategic objectives of

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organization are to work in partnership with stakeholders and service users for planning,
indentifying, evaluating and delivering services. For future development and continuance of
sustainable services, organization takes strategic steps to secure funding. The food retail
business such as Tesco which is the champion of customer in terms of both value and brand
has a successful format balancing elements such as operating model, customer proposition
and real estate strategy.
Strategy and governance is implemented in retail organization helps in determining
the risk appetite of company. The risk is about the amount and type which an organization is
willing to undertake for meeting their strategic objectives. Strategy also deals with leveraging
existing relationship in terms of protecting information and exploring ways of adopting the
best practices together. Poor marketing is considered as the major cause of declining margin
and low growth in almost every industry such as airlines, telecommunication, finance and
consumer products (Di Giuli and Kostovetsk 2014).
Marketing activities of organizations operating in such industries tightly align their
corporate strategy with their marketing activities. According to standard metrics, marketing
activities of organization seems to be performing well such as boosting repeat share, making
repeat purchase, building market share. Marketing activities in such organizations exist far
from boardroom and executive suite. Managers are rarely held accountable for how the
marketing activities support corporate strategy and return on investment is generated or not.
Reputation management becomes more and more important in industry such as
aviation as it emphasize the need to strengthen the communication capabilities of industry.
One of the important aspects of reputation management is strengthening the communication
capabilities that would help in ensuring customer loyalty and brand recognition. Reputation
of all members of industry and imminent issues of the sector is managed by the enhanced

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communication. The corporate reputation of companies operating in telecommunication
industry helps in proving competitive edge for ensuring survival in highly competitive
environment and continued growth (Herremans and Nazari 2016). This comes with the
implication to the operators of telecommunications for increasing their customer base and
gaining customer interest towards organization.
Examples of proactive and reactive measures used by company:
Work at Conoco Philips is conducted in a safe and environmentally responsible
manner by preventing occurring of illness, occupational illness and all injuries. Performance
of human is a way how equipment, people, culture and work process interacts as a system.
Organization has specific focus on proactively reducing human error outcome by recognizing
the error likely situation, improving interaction between critical and individual system and
controls and application of tools to reduce the error likelihood. In addition to this, for
ensuring that safety defenses are in place, a proactive multi discipline approach is adopted for
working with key rail contractors who participate in kick off meeting (Geels 2014).
The areas of weak signals are identified with the help of data analytics that helps in
enhancing proactive approach rather than reactive approach to work planning. Some
cornerstones that are used by organization to become highly reliable are intentional focus on
mindful change, deliberate execution and maintaining chronic unease element. Conoco
Philips is considered as leakiest resulting from its emission and due to its large presence in
San Jaun basin. Such basin has the distinction of being the leakiest methane field in United
States. Most of the emission in basin is from venting of methane to the atmosphere during a
cleaning process known as liquid unloading. The reduced emission completion, plunger gifts,
low bleed controllers and other technologies would help in curbing of emission of methane.
However, there is no uniform adoption of these measures by company. It is reported that

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Conoco completed reduction of emission in only 29% of wells of natural gas of United States
(Mohamad et al. 2018). The low bleed devices of company are replaced by high bleed
pneumatic devices. Proactive steps have been taken by company over the last few years that
help in reduction of emission companywide. The programs of protecting the species deal with
proactively facilitating the farmers and rancher to stabilize selected species population (Hiatt
et al. 2015).
Organization is taking efforts to continue to execute proactive management of risk of
climatic change, opportunities and impacts. The incentive programs of company are aligned
with the long term strategy and long term interest of stockholders for ensuring that
appropriate metrics are in place. Emergency management capabilities of Conoco Philips
manages the event using a process of comprehensive management that helps in management
of proactive phase of consequence management along with making immediate reactive
responses of an oil spill. It also intends to manage subsequent recovery of operations through
the team of business continuity. Any loss to production opportunities is assessed by
organization and responding to all the challenges relating to oil spill events so that operations
are returned to normal production status and safely minimizing the impact on environment
(Harrigan 2017).
Corporate social responsibility:
The approach of Conoco Philips to sustainable development is driven by the
commitment to provide natural gas and oil for the growing demand of energy in the world.
Various projects of organization intends to minimize the risk of their operations and impact
on environment whilst providing benefit to communities.

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Corporate governance structure
(Source: conocophillips.com 2018)
Boardroom politics:
The roles and responsibilities of board of directors help in framing the codes of
corporate governance. Procedures and rules of decision making on corporate affairs is spelled
out by responsibilities and distribution of rights among various participants in the corporation
such as shareholders, managers, board and other stakeholders. Performance of employees
within organization and developing the means to achieve objectives is formed by the
framework that is inclusive of process culture and systems. The board in oil and gas

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companies is composed of team of top management and principals of firm. Sometimes, the
lines between role of each individual such as manager, leader and director are blurred
because of multiple roles which directors are required to play. One of the challenges is
blurring of lines between roles and interpersonal relationship complexities. It is required by
directors in the board to be acquainted with issue of politics. Occasional conflict is inevitable
when a group of people with strong opinions and strong personalities work together (Raufflet
et al. 2016). The preferred method of passing resolution at the boardroom is generally
consensus, in such scenario; the death sentence for achieving the goals of board can be
unchecked friction. However, any heated discussion and differences of opinion cannot be the
bad thing.
Ethical matters:
The conduct and code of ethics provides employees, suppliers and contractors with
clear direction about how to behave in accordance with standards and policies and acting
ethically. Conoco Philips is committed to values of people, safety, integrity, responsibility,
teamwork and innovation. Global ethics and compliance team of company is guided by Chief
compliance officer that helps in preventing potential liabilities and risk and ensuring
regulatory adherence. The team helps in setting the tone and expectations for creating an
ethical work environment. Employees and contractors are encouraged to seek guidance and
ask questions about ethical concerns so that they understand their responsibility to suspect
and report misconduct. For shareholders, employees and contractor, organization has various
confidential reporting mechanisms that help in creation of an environment for suspecting
violations without any fear. Adherence of organization with applicable laws helps in
prevention of criminal and civil liability, promotion of a positive corporate reputation and

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ethical working environment (Ni and Van Wart 2015). In order to maintain highest standard
of operational excellence, suppliers are required to remain fully aligned with values.
The code of business ethics gives an explanation of standard along with maintaining
legal and ethical responsibilities. Such code forms the foundation of ethics programs and
compliance along with providing concrete guidance to different stakeholders with which
organization engages. It also intends to provide concrete guidance for expected behaviors by
covering several topics such as antitrust, business ethics, political involvement and
entertainment. Conoco Philips seeks gaining competitive advantage through superior
performance and never through illegal and unethical business practices. Product quality in
ethical context requires manufacturing and designing to meet the obligations of customers.
Potential conflicts within organization is resolved by taking every efforts in association with
situation of ethical codes that include the parties who have acted in good faith and such codes
are disclosed to management promptly.
Behavioral challenges and potential ways of mitigating them:
Human factors are one important area for development in accident prevention
strategy. It is about interaction of individual with equipment, facilities and management
systems. Behavior at work is influenced by such interaction which affects all the part of
business. The level of safety behavior is considered as critical factor for organizations
operating in oil and gas industry is influenced by commitment of management to safety
(Wesley and MacCallum 2014).
Involvement of safety representatives is recommended for reducing the disparity
between the perceptions of workforce and management by way of assessment and gathering
opinions of employees. Any form of practices of corruption by oil and gas companies would
have huge damaging impact leading to overall reduction in rate of economic growth and

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prospects of investment. It is likely that there would be hypocrisy between the reality of
corrupt practices and ethical disconnect between behaviors of internal norms. Moreover, the
technological changes in the oil and gas industry impacts the way in which information is
communicated because the operations of petroleum industry is considerably affected. Some
research paper has studies the information seeking behavior and information needs in context
of safety, health and responses to emergency. It is recommended that there should be
adequate sensitization on part of workers relating to information significance in enhancing
their productivity (Harrigan 2017). Trust can be rebuilt in oil and gas industry through a
combination of measures and actions such as:
 Holding each other in organization to accept responsibility and maintaining consistent
standard for industry performance at large with the hope that individual employees
will be taking efforts to avoid the incident themselves.
 It is further recommended that there should be adequate provisions of safety and
health information by management of oil and gas companies so that workers operate
safely. There should be implementation of safety control structure by enforcing
behavioral safety constraints. Different roles should be played by each component of
structure as it would be entrusted with different responsibilities for ensuring physical
process safe behavior (Al Hashmi 2017).
 In order to have an understanding of individual behavior of employees requires
management to influence the environment in which behavior occurs along with the
pressure.
 Measures should be taken by organization for development of industry wide standard
for environmental performance with reporting that are transparent. There should be
mutual management of risks by holding each other accountable (Harrigan 2017).

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Conclusion:
The report is prepared for evaluating different themes on matters of corporate
governance in context of Conoco Philips. It has been ascertained that there are fewer
differences relating reputation management, corporate social responsibility and corporate
governance between oil and gas industry and organizations operating in other industries such
as retail, telecommunication and airline. However, the main focus of corporate governance in
relation to oil and gas industry is about environmental concerns and how the operations
impact the local community and people at global level. In order to address the environmental
challenges, Conoco Philips has taken several proactive and reactive measures that make
organization a good corporate citizen being a socially responsible. Nevertheless, there are
some behavioral challenges faced by company which should be addressed by making
appropriate recommendations.

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