Corporate Governance, Reputation and Politics in Oil and Gas

This report delves into the political and ethical landscape of the oil and gas industry, focusing on Cabot Oil and Gas Company. It provides a comprehensive analysis of corporate governance, including the structure of the company's board, its committees, and its adherence to regulations. The report explores reputation management strategies, such as blogging, social media presence, and public relations, and contrasts Cabot's approach with that of Chesapeake Energy. It further examines corporate social responsibility initiatives and ethical considerations, including behavioral challenges and mitigation methods. The report highlights the importance of transparency, sustainability, and proactive measures to ensure ethical conduct and a positive brand image within the industry. It also discusses the similarities and differences between corporate governance, reputation management, and corporate social responsibility.

Report Politics in the Oil and
Gas Industry

Table of Contents
INTRODUCTION...........................................................................................................................1
Corporate governance......................................................................................................................1
Governance structure of the company....................................................................................2
Reputation management...................................................................................................................3
Exemplar proactive and reactive measures used by the companies.......................................5
Corporate Social Responsibility......................................................................................................6
Boardroom organization and management......................................................................................7
Boardroom politics.................................................................................................................8
Similarities and difference between corporate governance, reputation management and
corporate social responsibility................................................................................................8
Ethical matters........................................................................................................................9
Behavioural challenges and potential methods to mitigate them...........................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
There is an importance to promote transparency and sustainability in the functioning of a
company. Cabot oil and gas company which is engaged in development, exploitation and
exploration of oil and gas from united States. The report makes a comprehensive discussion on
corporate governance activities conducted ensuring ethical behaviour in the organization.
Further, the report focuses on reputation management so that the brand image of the enterprise
can be enhanced in order to promote sales. In the end, the report ponders on corporate social
responsibility activities conducted by Cabot for sustainable development.
Corporate governance
Corporate governance is the set of rules, regulation and practices of the entity through
which it can be controlled or directed. It helps in balancing the interests of varied stakeholders,
customers, management, suppliers, government, financiers and the community. It helps in
providing framework so that the objectives of the entity can be attained. It takes care of internal
control for performance management in the work premises. The set of rules, regulations, policies
and control involved in putting an appropriate kind of efforts in the organization helps in
achieving the organizational goals (Tricker and Tricker, 2015). Every company ave their own set
of rules with respect to fulfilment of stakeholders interest. It has a significant impact on the
valuation of equity holders as well. It is important for the companies to involve in monitoring
activities so that members can get involved in better decision making policies. The members
attempt to align the objectives of the company to that of the stakeholders goals. Some of the
common principles of corporate governance board includes the following:
 Right and equitable treatment to the shareholders. The entity must have utmost respect
towards its shareholders and extend help to exercise the rights being owned by them
(Erkens, Hung and Matos, 2012).
 There is an obligation towards not only the shareholders but also towards the non
shareholders, who are stakeholders. These type of stakeholders includes, investors,
creditors, employees, customers, policy makers, suppliers, etc.
 The committee formed for the company in order to conduct corporate governance must
have adequate skills to and understanding to review and challenge the current
management performance. Appropriate level of independence and commitment is
extended by the committee to build some trust upon it.
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 A certain level of understanding with respect to code of conduct followed in the
organization which helps in promoting ethical decision making and responsible handling
the arising and prevailing issues in the organization (McCahery, Sautner and Starks,
2016).
 The roles and responsibilities of the board and the employees must be clear so that it can
be performed appropriately. To safeguard the adopted procedure, steps must be taken to
assess the integrity of financial reporting. It helps in better implementation of ethics in
the financial reporting aspects of the entity as well.
 The roles and responsibilities of the board must be defined clearly to the public as well so
that the stakeholders are accountable to the decision making process as well. Further,
implementation of the procedures in order to verify the integrity and safeguard the
integrity of the process of financial reporting. Further, all the material fact that can affect
the financial stability of the shareholder must be disclosed to them at appropriate point of
time.
The competitive company of Cabot oil is Chesapeake energy. The governance activities
adopted by this companies are as follows:
 Monitoring the activities of board of directors.
 Review the quarterly reports which helps in analysing the performance of the company
and ascertain the benefits attached to it.
 It also helps in assessing the performance of the company and effective decision making
of the board.
 Assessment of policies, rules and regulations and ensuring that all of them are adequately
followed
Governance structure of the company
Cabot oil and gas company have its own corporate governance committee. The board of
directors of Cabot employs three to four members to constitute the Corporate Governance and
Nominations Committee and one of the member is designated as its chairman. Further, each of
the member is the independent director. All the rules, regulations and statutes made by New
York Stock Exchange Listing standards (Hermalin and Weisbach, 2012). The members of the
committee are replaced by the board at every annual meetings. The basic responsibility of the
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committee is to take the business judgement and act in a manner that is the best in the interest of
the stakeholders. The performance of the company must be with all the honesty and integrity.
The main purpose of the team are discussed as under:
 To discuss the performance of the company the management plan and future prospects of
the business are discussed.
 Review, approve and monitor the involved financial plan, business strategies and major
corporate actions to be taken by the company.
 To assess the involvement of major risk that can be faced by the company in the forth
coming period that can affect the interest of stakeholders (Jo and Harjoto, 2012).
 Performing the assessment of the risk and ascertain the important steps that can help in its
mitigation.
 To oversee the compliance with respect to company's code of business conduct and the
statement of expected ethical conduct (Governance, 2017).
There are various committees that help the corporate governance committee so that the
responsibilities can be effectively discharged. There committees are, audit, compensation,
corporate governance, safety and environment affairs, regulations and New York Stock
Exchange Listing Standards etc (Tai and Chuang, 2014). The guidelines and objectives followed
by the company may not prove to be effective in the long run as any change in the economic,
social and political factor in the environment can lead to significant impact on the policies
framed by the company. Further, the major risk involved in the corporate structure of Cabot oil
and gas company is that the members of the committee keeps changing on annual basis and are
selected by the board. It shows that the policies that have been framed in the earlier year may not
be known to the new committee members. Certainly the research conducted by them may not be
similar to the one who is going to assess the problems in the forth coming years. Disclosure of
material facts to the shareholders helps in giving clarity regarding the factual information to them
so that they can withdraw their shares before time if they are not happy and satisfied with the
decision being made by the board of the enterprise.
Reputation management
Reputation management is the activity through which the decision makers can present the
company in a particular form, in front of the public by presenting adequate influencing
information to them. With the significant growth in the social media platform there is a rapid
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increase in the reputation activities of the entities as well. They opt for media visibility, press
release and sponsorship related tools in order to create good reputation of the company. Cabot oil
and gas company have different reputation management activities that are conducted by it. Some
of them are mentioned below:
 Blogging is one activity as it is trending and read by not only youngsters but also by the
investors and top business officials as well (Suliman, Al-Khatib and Thomas, 2016).
 Listing the website of the entity by optimizing appropriate keywords in the directory
listings.
 Hiring the writers that have adequate amount to information about the company and can
write appropriate kind of reviews about it.
 Publish online articles about the company with synchronized links on all the social media
platforms. Further, promoting it through links and banners in the city as well.
 Social networking websites such as, Facebook and space can also be used to post and
update the customers.
Every brand that exist in the market opt for adequate amount of promotion so that
appropriate bran image about the company can be built. It helps in providing adequate
information to the customers so that they can opt for the company while making their purchases.
According to a research, 85% of the people claim that they read the customer review about the
product before they opt for any new material or product. Cabot, being an oil and gas company
must have adequate review sessions from the clients so that it can help in further generating new
customers for the company. A sound marketing strategy may be applied by Cabot company.
However, there is a requirement to opt for some other measures of promoting as well. The trust
and reliability of the new clients can be gained if the company follow and consider all the ethics
in its operations. Further, public relation campaigns also plays significant role in spreading
positive and negative opinions regarding the products and services of the company. There must
be sufficient number of positive campaigning about the company in order to counter the negative
ones. The information shared with the customer must be based on their demand and as per the
requirement of the disclosure that is required to be made by the enterprise.
The information that is required to be disclosed to the public must be performed in true
and fair manner. False information can leave a negative impact on the minds of the customers.
Sharing information in the most comfortable manner helps in representing the company in the
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best possible way as it displays the positive image of the company. Cabot is an independent oil
and gas entity involved in development, exploitation and exploration activities. Hence, direct
interaction to the end consumer is difficult. Therefore, it can involve in business to business
activities. It becomes important for the company to get involved in delivering good image of the
enterprise so that good business relationships with the other company can be build. Hence, the
company need to opt for better policies in the organization so that right kind of reputation can be
built in the market.
However, in case of Chesapeake Energy Company, the reputation management activities
are quite different. It has been assessed that people have higher dependence on the customer
review section. Hence, the company have increased its existence on My Space, Facebook,
Twitter and other social media websites. It also ensures that appropriate keyword search option is
used so that people can find the website easily. It helps the company in managing reputation of
the company which further increases the profitability and presence as well.
Exemplar proactive and reactive measures used by the companies
Another important aspect of reputation management is to provide ideal working
environment to the employees so that effective and efficient working performance can be
promoted at the work place. Since, Cabot is involved in mining activities, it is important to opt
for adequate amount of safety measures for the workforce who are in direct contact to the
accidents. Hence, it is important to opt for proactive measures rather than opting for reactive
measures after the activity has already been taken place.
Cabot ha a certain set of rules and regulations that has to be taken care of every employee
who has to perform that hazardous activities (Cheng, Ioannou and Serafeim, 2014). Further,
proper training and development is provided to the employee so that they are effective enough to
perform that function without any misshapen. The company has a special team who is involved
in measuring the performance of the employees with the help of critical control. In that case, all
the safety measures are taken and cross checked every time when the activity is going to take
place. Further, estimation of probabilistic events for the effectiveness of the events is taken into
consideration. It helps in determining the safety systems effectively and taking corrective actions
as and when required. A minimal loss in the prevention measure can lead the company into loss
of lives further affecting the reputation of the enterprise as well.
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However, critically analysing the fact, there are certain tactics based on which it can
improve its proactive and reactive functions. Certain key performance indicators are as follows:
 Conducting four safety meetings in the organization and adopt feedbacks being delivered
by safety team of Cabot.
 Site visit of the quality check team so that it can be ensured that right tools are used in the
process further avoidance of the accidents as well.
 Reporting of any suspicious activity that take place at the site so that adequate measures
can be taken by the senior team.
 Proper training and development provided to the workers can reduce the incidence of
hazards. Hence, employees must be allowed to the site if they are equipped with proper
training sessions and are ready to take the practical exposure. It helps in reducing the
exposure to hazards and individual loss.
Hence, it can be concluded that, Cabot oil and gas company have to make adequate
inclusion of proper proactive activities so that the requirement of reactive activities can be
reduced.
Corporate Social Responsibility
Corporate social responsibility is the initiative taken by the companies in order to combat
with the effect has been created by the company's activities on environment and social well
being. The activities performed by the companies as corporate social responsibilities help in the
sustenance of the business for longer period of time. The activity implies short term cost on the
business and do not give any immediate return to the company. However, it helps in brining
financial stability to the company by living upto the trust of the customers. Therefore, it has
indirect positive impact on the operations of the enterprise. Some of the activities adopted by
Cabot includes the following:
 Adoption of health and safety program has been actively performed by the company so
that hazards can be mitigated and risk involved in it can be reduced to the core.
 Strong value is shared with the stakeholders so that operational success of the
organization can be increased (Harris and Faith, 2012).
 It prevents pollution, reduces the output of waste and emission further minimizing the
risk involved in the environment as well which are associated to the operations.
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 The entity ensures that each employee involved in the operations is accountable and
responsible to the health, safety, security and performance of the environment so that risk
can be minimized.
 Promoting open communication in the organization so that frequent dialogue can be
promoted in the organization. The feedbacks received from the employees can be further
used to easing and improving the activities involved in the company.
When the company is involved in such hazardous activities such as oil and gas
exploration, it becomes important to opt for corporate social responsibilities activities in the
organization. Cabot tries to use all the technological upgraded instruments so that people
involved in the process can be kept at safest place. However, there are certain issues in the
process being followed by the company. While conducting oil exploration activity, it becomes
necessary to take care of the environment as well due to increased remittance of fumes that can
affect the health of people who are residing near to that area where the mining sites are situated.
In that case, company must have appropriate measure's son that the remittance of the smoke can
be reduced to the minimum. Reduction in the output of the waste that can pollute soil and water
of the nearby region by installing recycling them or converting them on biodegradable waste can
help in reducing the issues further fulfilling the corporate social responsibility.
The corporate social responsibility measure adopted by Chesapeake Energy is that it has
joined hands with different non-profit organization so as to serve the purpose of the society. It
has also volunteered in education sector and invested in providing free education to the needy.
Common education programmes in which the company has invested includes science and
technology, engineering and mathematics (STEM). It has also joined hands with an organization
where they are restoring and protecting man made environment. Moreover, within the
organization, it tends to promotes, waste management, optimum utilization of resources,
reduction in the emission of harmful gases etc.
Boardroom organization and management
There are various people involved in taking appropriate decisions to the company. One of
the major role is played by shareholders of the company as the voting rights given to them makes
sure that they have adequate indulgence in the activities of decision making process. The
stakeholders of the enterprise are the one who may not right to involve in the decision making
process but have significant amount of effect based on the decisions made in the enterprise.
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Cabot oil and gas company also have shareholders and other stakeholders on whose decisions the
important factors of the business runs. Critically analysing the fact, they may hold right to vote
but are not considered as the ultimate decision makers of the entity (Chevallier, Molesworth and
Happe, 2012).
Boardroom politics
Further, the management of the company as well may run the business but do not have
any rights on the profits of the business other than salary. It shows that the decision must be
made by consulting to both management and shareholders of the enterprise so that it can reach to
effective conclusion. Board of directors helps in bridging the gaps between management and
shareholder so that there is adequate reduction in the disputes in the company.
The board room structure of Cabot oil and gas company includes collective decision
making where all the important decisions are made by board and staff both. Further, critically
analysing the fact, in some cases, the management must opt of verdict by its own so that the
process of decision making can be fastened further considering the rights and interest of the
stakeholders (Ward and Raithby, 2013). It is important to gain understanding regarding the
matter for which decision is to made by any of the level of the board. Hence, the thinking must
be issue oriented and must gain the support of maximum number of people in the board.
Similarities and difference between corporate governance, reputation management and corporate
social responsibility
Some of the common similarities among the states themes, that is, corporate governance,
reputation management and corporate social responsibility, are:
Similarities:
 The corporate governance strategy adopted by Cabot oil and Chesapeake Energy
Company helps in ensuring appropriate establishment of rules, regulations and policies
at the workplace
 Digital media is adopted for reputation management by both the companies.
 The common goal of all the organization and every department functioning in it is to
achieve higher amount of profits in order to serve business objectives.
Differences
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 The main focus of corporate social responsibility is on sustainability of the resources
and the organization. However, corporate governance focus on achievement of
corporate and stakeholder’s goals.
 The main aim of reputation management is to enhance the brand image. However, CSR
focuses on optimum utilization of available resources so that no harm can be initiated
to the environment.
Ethical matters
It is important to take care of ethical issues while indulging indecision making process.
The interest of the stakeholders such as customers, employers, suppliers and shareholders must
not be hampered. Further, it is important to make adequate material disclosure to the
stakeholders so that they are aware of what is happening in the organization.
Behavioural challenges and potential methods to mitigate them
When any change is implemented in the organization it is important to convey it to the
stakeholders about the change. It helps in taking their point of view regarding the subject matter
as well. Board of directors plays an important role in this process as they are the leaders who
drives the company, they need to disclose it in appropriate manner so that all the mate rial facts
and information are disclosed (Tarrier and Johnson, 2015). Further, behavioural challenges for
Cabot is the safety of the employee who are involved in exploration activities. In order to
mitigate this risk, appropriate training and development can be provided to them so that the risk
can be minimized.
CONCLUSION
From the above report, it can be concluded that, Cabot is a oil and gas company involved
in exploration of oil and gas. There are various corporate government guidelines that are
followed by the employees as well as the top level management to promote ethical behaviour in
the enterprises. Further, reputation management is also important aspect to carry out goodwill of
the entity which can promote investment and high B2B sales as well. In the end, boardroom
organization management is discussed considering the decision making process that is directly
related to the saving the interest of the stakeholders.
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REFERENCES
Books and journals
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finance. Strategic Management Journal. 35(1). pp.1-23.
Chevallier, C., Molesworth, C. and Happe, F., 2012. Diminished social motivation negatively
impacts reputation management: autism spectrum disorders as a case in point. PloS
one. 7(1). p.e31107.
Erkens, D. H., Hung, M. and Matos, P., 2012. Corporate governance in the 2007–2008 financial
crisis: Evidence from financial institutions worldwide. Journal of Corporate
Finance.18(2). pp.389-411.
Harris, T. and Faith, P., 2012. Visa International Service Association,. Reputation management
in a transaction processing system. U.S. Patent Application 13/485,637.
Hermalin, B. E. and Weisbach, M. S., 2012. Information disclosure and corporate
governance. The Journal of Finance.67(1). pp.195-233.
Jo, H. and Harjoto, M. A., 2012. The causal effect of corporate governance on corporate social
responsibility. Journal of business ethics. 106(1). pp.53-72.
McCahery, J. A., Sautner, Z. and Starks, L. T., 2016. Behind the scenes: The corporate
governance preferences of institutional investors. The Journal of Finance. 71(6).
pp.2905-2932.
Suliman, A. M., Al-Khatib, H. T. and Thomas, S. E., 2016. Corporate Social
Responsibility. Corporate Social Performance: Reflecting on the Past and Investing in
the Future, p.15.
Tai, F. M. and Chuang, S. H., 2014. Corporate social responsibility.Ibusiness. 6(03). p.117.
Tarrier, N. and Johnson, J. eds., 2015. Case formulation in cognitive behaviour therapy: The
treatment of challenging and complex cases. Routledge.
Tricker, R. B. and Tricker, R. I., 2015. Corporate governance: Principles, policies, and
practices. Oxford University Press, USA.
Ward, M. D. and Raithby, P. R., 2013. Functional behaviour from controlled self-assembly:
challenges and prospects. Chemical Society Reviews, 42(4), pp.1619-1636.
Online
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