Bosnia & Herzegovina
The Former Yugoslav Republic of Macedonia
Corporate Governance is how the management, shareholders and Board of Directors ensure all investors—both shareholders and creditors—are protected against managers acting solely in their best interest.
Our governance consists of laws, policies, procedures and practices that protect the well-being of P&G. The policies, procedures and practices in this section demonstrate how seriously we take corporate governance. Our management acts as long-term investors because they, like most P&G employees at all levels, are in fact long-term investors.
In 1887, before P&G was even a publicly traded company, William Cooper Procter introduced a profit-sharing program for employees. At the time, he said, “We should let the employees share in the firm’s earnings. That will give them an incentive to increase earnings.” He revised that program in 1903 to have the profit sharing be awarded in the form of actual P&G stock. He reasoned that as employees became stockholders, their economic interests and those of the Company would be bound more closely together.
That program still exists today, with a large part of each U.S. employee’s retirement consisting of P&G stock. Additionally, virtually all employees own P&G stock or stock rights via various investment programs. Because of this, employees’ economic interests are aligned with the Company.
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Our Executive Share Ownership Program requires senior executives to own shares of company stock and/or restricted stock units valued at eight times base salary for the CEO, and five times base salary for the other senior executives. Non-employee directors must own company stock and/or restricted stock units worth six times their annual cash retainer. These compensation programs help to ensure the alignment of the interests of our senior executives and directors with shareholders.
P&G has a strong history of operating with integrity throughout the company—at all levels, in all countries, both internally and externally. Our actions and the actions of all our employees are governed by our Purpose, Values and Principles. The basis for every decision we make at P&G can be found in our Purpose, Values and Principles—our PVPs. The clarity and constancy of the Company’s PVPs is the one factor above all others that has driven the Company’s growth over generations. Our commitment to operate responsibly is reflected in the steps we have in place to ensure rigorous financial discipline and Corporate Governance.
Our reputation is earned by our conduct. What we say, what we do, the products we make, the services we provide and the way we act define us as a company. As conscientious citizens and employees, we only want to do what’s right. As a global leader, this is the only way to do business.