An overview of Board Director composition for the Top 100 (by Market Cap Value) Texas-based publicly traded Energy companies. Six criteria are used to understand the true diversity of a board. The 100 companies are reviewed as a group and by Market Cap Value subgroups. This presentation shows the highlights taken from a more detailed text companion piece with the same title (also included on SlideShare).

1. Texas Energy Industry
Corporate Governance
Diversity Report 2014
Tom Furlong
Managing Director
Harvard Group International

2. Key Learnings
01
table of contents
Overview
02
Overall Board Demographics
03
Board Member Status Metrics
04
Methodology & Top 100 Texas
Energy Companies
05
About Harvard Group International
and the author
06

3. 3
conclusions from this study
Key Learnings
section 01
 Board Size for the Texas Top 100 (8.5 seats) is nearly a full seat less than peer
Market Cap Value (MCV) companies in other industrial sectors
 Female participation on Texas Top 100 boards is half the average of public
companies in the U.S.A. (8.3% vs 16.9% of all board members)
 Energy and Financial industry executives hold 80% of all board seats with these
companies, limiting exposure to best practices from other industries
 The Texas Top 100 boards can easily become more diverse by adding an
additional seat and attracting quality executives of both genders from outside the
Energy and Financial sectors

4. 4
what is diversity?
This report* is a diversity analysis of the
top 100 MCV (Market Cap Value) Texas-
based public Energy corporations.
Gender and Ethnicity are the most commonly
considered forms of diversity- but other factors
should be considered to determine the
“diversity” level of a corporate board.
Six Diversity Criteria were reviewed
for this report:
• Gender
• Industry Focus (from inside/outside
the Energy sector)
• Education Background
• Age
• Length of Board Service
• Other Public Board Activity
Overview
section 02
* A more detailed report, including individual company Board analysis, is available by contacting the author

5. 5
why is diversity important?
For high MCV companies, having a board that
reflects the breadth of American industry will
offer additional insights into a company’s
strategic direction and focus. The result:
improved advice and guidance for the
executive team.
Diversity of experience is important in helping
to prevent “group think” among the board. This
risk is most glaring when the directors are all
from the same industry or other similar
backgrounds and experiences.
Corporate Governance diversity can also
impact the investment community. Investment
funds might look for boards that reflect the
make-up of successful boards from other
industries; investors might choose to target
companies whose board shows a breadth of
experience; and having a high level of
diversity demonstrates the board’s
commitment to look at a larger pool of talent
for their members- and would look at a larger
pool of talent when making key executive
hiring decisions.
Overview
section 02

6. 6
overall board size
There are 845 total seats
among the 100 boards.
Board sizes range from 4 to
13 across all MCV groups.
Average board size is just
below 8.5 directors:
• 25 boards > 9 members
• 43 boards = 8 or 9
members
• 32 boards < 8 members
Overall Board demographics
section 03
Board Size for Company
Size 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

7. 7
energy industry sector breakout
There are seven different
sectors within the Texas
Energy industry.
Nearly 90% of the companies
are based in either the
Houston or Dallas/ Fort Worth
markets; the rest are
scattered between Midland,
Austin/San Antonio, and
El Paso.
Overall Board demographics
section 03
Sector All > $15B $5B-$15B $2B-$5B $500M-$2B
Downstream 6 3 2 1 0
Integrated 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

8. 8
female representation
Women hold 8.3% of the
Texas Top 100 board seats.
• 16 companies have two
women on their boards
• 38 companies have one
female director
• 46 companies have no
women executives on
their boards
Overall Board demographics
section 03
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 Members 8.3% 12.7% 9.5% 5.9% 4.9%

9. 9
industry background (1)
Boards with too many (or
too few) Energy industry
insiders can become blind
to outside influences.
Over 1/2 (457 out of 845) of
board members come from the
energy industry- with 266 from
the same sector as the
company that they offer
governance and guidance.
Board Member Status Metrics
section 04
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

10. 10
industry background (2)
Financial industry directors
form the largest group of
industry outsiders.
Over 1/4 (216 out of 845) of
board members come from
Private Equity, Accounting,
Investment, and Banking firms-
reflecting the high levels of
Investment and Capital
Expenditures in the industry.
Board Member Status Metrics
section 04
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

11. 11
education background
Board Member Status Metrics
section 04
A strong mix of educational
backgrounds on a board
balances the technical and
capitalization needs of
Energy companies.
Currently 537 board members
(63%) have undergraduate
degrees in either:
• Business/Accounting
• Engineering/Geology
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

12. 12
age
Board Member Status Metrics
section 04
A broad age range on a Board
can offer differing perspectives
of guidance and operation for
their management team.
Boards have to prepare for the
Great Crew Change: those skewed
with too many members over 70 risk
a rapid drain of experience 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

13. 13
length of board service
Board Member Status Metrics
section 04
Board tenure (and turnover) can
impact the quality of guidance
offered to management.
For this report, 142 of the 845 board
members (16.8%) are considered to
be “long-tenured”- having served on
their board for over 13 years. Boards
with more than 2 “long-tenured”
directors risk complacency and loss
of independent oversight.
Board Composition of Directors
All Boards > $15B $5B-$15B $2B-$5B $500M-$2B
# 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

14. 14
outside public board activity
Board Member Status Metrics
section 04
A majority (482 out of 845) of
Texas Top 100 directors sit on
other public company boards.
Multiple board service offers a
director exposure to an additional
dynamic team- and also the
potential for conflicts on the time
and effort required to effectively
serve their company and it’s
management team.
Multiple Board Directors
All
Boards > $15B $5B-$15B $2B-$5B $500M-$2B
# on Multiple Boards 482 146 109 105 122
# on Energy 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%

15. 15
Compiled data for this report
Market Cap Value (MCV) was utilized in
this report since a company’s Board
focus is to look out for the investment
interest of the shareholders.
This report looks at the Top 100 companies
both as a whole and by MCV size groupings:
 MCV greater then $15 billion
 MCV between $5 billion and $15 billion
 MCV between $2 billion and $5 billion
 MCV between $500 million and $1 billion
A few other points about this data:
• MCV were of July 3, 2014
• Directors were taken from each companies
website on July 1,2014
• Demographic and other status criteria
were gathered through exhaustive
research of multiple data sources
• Changes that may have occurred between
the compilation of data and the report’s
publication date are not reflected in the
commentary or chart data
Methodology
section 05

16. 16
who is on the the list?
The Texas Top 100 Energy companies
section 05
Anadarko Denbury Resources Key Energy Services Plains All American
Apache Diamondback Energy Kinder Morgan QR Energy
Athlon Energy Dril-Quip Legacy Reserves Quanta Services
Atmos Energy Dynegy Linn Energy Range Resources
Atwood Oceanics El Paso Electric Magnum Hunter Resources RigNet
Baker Hughes Energy Transfer Marathon Oil Rosetta Resources
Basic Energy Services Enterprise Products Martin Midstream RSP Permian
Boardwalk Pipeline EOG Resources Matador Resources Sanchez Energy
Bristow Group EXCO Resources McDermott Schlumberger
Buckeye Partners Exterran Partners Memorial Production Southwestern Energy
C&J Energy Services Exxon Mobil Midcoast Energy Spectra Energy
Cabot Oil & Gas Flotek Industries Nabors Summit Midstream
Calpine FMC Technologies National-Oilwell Varco Swift Energy
Cameron Genesis Energy Newfield Exploration Targa Resources
CARBO Ceramics Goodrich Petroleum Newpark Resources Tesco
Carrizo GulfMark Offshore Noble Energy Tesoro
CenterPoint Energy Halcon Resources NuStar Energy TETRA Technologies
Cheniere Energy Halliburton Oasis Petroleum Transocean
Clayton Williams Helix Energy Solutions Oceaneering International Ultra Petroleum
COBALT Hercules Offshore Oil States International Valero Energy
Comstock Resources Hi-Crush Partners Parker Drilling Vanguard Natural Resources
Concho Resources HollyFrontier Patterson-UTI W&T Offshore
ConocoPhillips Ion Geophysical Phillips 66 Weatherford
Contango Oil & Gas Jones Energy Pioneer Energy Services Western Refining
Crestwood Midstream KBR Pioneer Natural Resources Willbros Group

17. 17
who are we?
Harvard Group International (HGI) is an
Atlanta-based executive search firm that has
been helping clients throughout North America
build their future since 1996. HGI exceeds
performance metrics of the multi-office and
multi-national retained search firms in rate of
success (99%+), speed of service, and client
satisfaction metrics. The HGI team, with over
350 years of search industry experience,
attracts best-in-class talent for board roles, C-
Suite, senior/junior executive positions, and
key individual contributor roles.
Tom Furlong is the Managing Director of the
HGI’s Energy practice and also works on the
firm’s Corporate Governance team. He has
successfully helped clients and candidates
build their future for over 15 years by leading
executive search projects throughout North
America and Asia. Tom also draws upon his
13 years of experience at Novartis to
understand the inner workings of individual
teams that give strength to enterprises of all
sizes and scopes.
About Harvard Group International and the author
section 06

18. Harvard Group International
1640 Powers Ferry Road #25
Marietta, Georgia 30067-1444
p) +1 404.459.9045
w) www.harvardsearch.com
t) @harvardsearch
Tom Furlong
p) +1 678.214.6065
e) tfurlong@harvardsearch.com
t) @TerrellMillTom
contact
information