FTI TechnipFMC Limited

TechnipFMC Proxy Statement 2022

TechnipFMC Proxy Statement 2022

Target compensation reflects the average of fiscal 2019, 2020, and 2021 base salary rate, target bonus, and target value of long-term incentives granted.

Realizable compensation reflects the average of fiscal 2010, 2020, and 2021 base salary rate, actual bonus, in the-money value of stock options based on the Company’s December 31, 2021 closing stock price of $5.92, value of restricted stock units based on the Company’s December 31, 2021 closing price, and value of performance share units based on the Company’s December 31, 2021 stock price and assuming target performance.

Shareholders have provided support for say-on-pay

We received more than 84% of shareholder support for our say-on-pay proposal at our 2021 Annual General Meeting of shareholders and have averaged more than 78% shareholder support over the past four years. The Compensation and Talent Committee strongly values the opinions of our shareholders as expressed in the say-on-pay vote and believes that the support received in 2021 and over the past five years demonstrates a strong alignment of our compensation program with our shareholders’ interests.

TechnipFMC Proxy Statement 2022

Environmental, Social, and Governance

Our actions and goals in Environmental, Social, and Governance (“ESG”) derive from our foundational beliefs, with a close tie to Sustainability: We act responsibly, always considering our impact on the planet, people, and communities in which we operate.

Our decisions regarding corporate responsibility, governance, and sustainability are founded on the principles that guide our Company. Our core values provide the framework for all of our decision making and are based on our Foundational Beliefs. Each of the three pillars of ESG – Environmental, Social, and Governance – support us in being responsible corporate citizens and drive our ambitions to be more sustainable. In 2020, we formalized our ESG ambitions in our 2021-2023 ESG scorecard (“the scorecard”), with clear metrics designed to drive performance and accountability. As such, we have renamed the Corporate Responsibility and Sustainability section of the Report to Environmental, Social, and Governance.

While the scorecard measures specific achievements in ESG, our activities are not limited to those that are measured on our scorecard, or to actions and monitoring required by law. Our achievements in ESG, including achievements under each pillar of the ESG scorecard, and activities are presented over the following pages, including activities which are not reflected in the scorecard.

To better reflect our focus on corporate responsibility and sustainability at the Board level, the ESG Committee’s charter includes oversight of the Company’s policies, programs, and strategies related to environmental stewardship, responsible investment, corporate citizenship, human rights, and ESG risk management. This committee also reviews and monitors the development and implementation of ESG targets, standards, metrics, or methodologies, and reviews the Company’s public disclosures with respect to ESG matters.

Through ESG, we will promote a sustainable future for our Company in which TechnipFMC remains an inclusive and diverse workplace where our people are respected, valued, and inspired.

TechnipFMC follows the Ten Principles of the United Nations (“UN”) Global Compact in the areas of Human Rights, Labor, Environment, and Anti-Corruption. The UN Global Compact is also a call for action to achieve its 17 Sustainable Development Goals (“SDGs”). These societal goals are at the heart of the UN’s 2030 Agenda for Sustainable Development and are aimed at ending poverty, protecting the planet, and ensuring that all people enjoy peace and prosperity by 2030.

After evaluation, we have aligned our targets with the UN SDGs for which we believe we can achieve the greatest positive impact, given their relevance to our business and sustainability strategy. The application of these SDGs throughout this section are identified by the SDG icon labels.

TechnipFMC Proxy Statement 2022

A snapshot of our 2021 progress towards our ESG goals in our 2021-2023 scorecard is set out below. Based upon our overall performance we believe we achieved 120% of our requirements for this year’s ESG targets and initiatives. Detailed explanation of our progress is set out in the respective Environmental, Social, and Governance sections below. 

Board Oversight of Environmental, Social, and Governance topics

Our Environmental, Social, and Governance Committee (the “ESG Committee”) reviews and monitors the development and implementation of ESG targets, standards, metrics, or methodologies, and reviews the Company’s public disclosures with respect to ESG matters. Our Board of Directors receives regular updates and recommendations from our ESG Committee.

Areas of oversight include:

TechnipFMC Proxy Statement 2022

Core Values and Foundational Beliefs

Our core values are the drivers that guide how we act in a distinctly TechnipFMC way so we can deliver on our purpose and achieve our vision. We bring our values to life through our behaviors – specific, observable, and measurable actions.

Our core values

Our Foundational Beliefs are the cornerstone of our values that describe how we fundamentally do business and what we never compromise on, no matter the circumstances.

TechnipFMC Proxy Statement 2022

Environmental

Each of the three pillars of our ESG strategy is rooted in Sustainability, one of our Foundational Beliefs, which simply states: We act responsibly, always considering our impact on the planet, people, and communities in which we operate.

It is our policy that we will not compromise on safety, health, security, or the environment to achieve our financial, project, service, and manufacturing objectives. Through this, we are committing our resources and expertise to continually assess and mitigate potential pollution related to environmental impacts from our activities, through better design, process improvement, and efficient technologies. We operate our business in a manner that minimizes the impact of our operations on the environment and develops sustainable solutions to reduce carbon emissions and our overall environmental footprint.

Our environmental program at TechnipFMC is directed to protecting the environment where we operate, identifying and evaluating environmental risks to mitigate and prevent pollution by implementing controls, including identification of and compliance with applicable environmental regulations, and by using natural resources efficiently.

We measure our success and promote the continued improvement of our environmental management system through the reduction of environmental incidents and our environmental footprint through clear and meaningful key performance indicators to enhance our environmental performance.

This Environmental section details our efforts to mitigate the impact we have on our planet. The scorecard contains metrics related to our environmental performance, and demonstrates how we are taking greater responsibility in playing our part in the journey to a net zero-carbon society.

The scorecard, which is published annually and tied to bonus schemes throughout the Company to encourage positive behaviors, covers three distinct areas of our environmental efforts: Scope 1 and Scope 2 Greenhouse Gases (“GHG”) emissions, waste, and water management.

Our environmental actions and commitments are not limited to those covered by the scorecard. We have set other indicators that measure our environmental footprint and potential risks.

Our scorecard Commitments

Our carbon footprint: Scope 1, Scope 2, and Scope 3 emissions

Our 50 by 30 target – to reduce our Scope 1 and Scope 2 GHG emissions by 50% by 2030 – was announced in November 2020 and has been adopted into our ESG scorecard. It covers CO2 equivalent (“CO2e”) emissions from fuel combustion as well as emissions from the purchase of electricity, heat, cooling, and steam by the Company for its own use. The Spin-off of Technip Energies had a significant impact on the size and nature of our operations. To promote fair and relevant reporting, a recalculation of the 2017 base year was required to deduct Technip Energies’ emissions. Following our GHG Management Methodology, and in alignment with the GHG Protocol Corporate Accounting and Reporting Standard, TechnipFMC has completed this recalculation and the scorecard and 50 by 30 targets now reflect this adjusted base value and the company we are today. We are constantly striving to achieve these targets, taking into account the evolving market, and the availability of renewable energy sources which play an important role in meeting the new targets.

TechnipFMC Proxy Statement 2022

To meet our target, we are currently working on several initiatives. Our vessel management team, OneFleet, has conducted an evaluation on the efforts needed to reduce Scope 1 emissions from fuel consumption and identified initiatives such as the upgrade of vessels and use of alternative fuel, in alignment with commercial and regulatory factors. Under Scope 2, some workplaces are evaluating the installation of solar panels to provide energy to the facility as well as evaluating the availability of renewable sources in the current energy source.

In 2021, we implemented a Scope 3 GHG Management standard that defines the methodology to account for the GHG emissions from our value chain. We also conducted a review of Scope 3 and agreed on the categories on which the Company will report in 2022. Scope 3 covers CO₂e emissions from purchased goods and services, business travel, treatment of waste generated at our workplaces, transportation and distribution, and leased assets when these are not considered within Scope 1 and Scope 2. These emissions will be reported in the Corporate HSE reporting system. The Company has selected 2019 as its base year for Scope 3 because it is the year that best represents our value chain relationship before the challenges posed by COVID-19. TechnipFMC estimated Scope 3 GHG emissions from some of the categories for 2019 (e.g., business travel, purchased goods) within the boundaries established.

TechnipFMC calculates Scope 1 and 2 GHG emissions in alignment with the GHG Protocol Corporate Accounting and Reporting Standard. The inventory includes GHG emissions from the workplaces where TechnipFMC has operational control. Activity data from fuel purchased and energy consumption is collected and reported on a periodic basis and published emission factors are used to calculate the Scope 1 and 2 GHG emissions. Scope 2 emissions are calculated following the location-based method. After evaluating the data available and assessing the appropriate level of detail to influence Scope 3 GHG emissions in the supply chain, it was decided that TechnipFMC will gather direct consumption data from its largest suppliers, who represent approximately 85% of TechnipFMC’s weight of goods procured (about 10% of suppliers by count). Scope 3 GHG emissions for the remainder of the supply chain will be estimated based on the country of supply and goods procured. Scope 3 GHG emissions associated with the transportation of goods will be calculated based on weight, distance, and mode of transportation in most instances when dedicated transportation is hired by TechnipFMC, in which case emissions will be calculated based on fuel consumption. Our Global Travel team worked with our main vendors to obtain data for 2019 to calculate Scope 3 GHG emission for business-related travel, based on employee population distributions correlated to travel volumes and spend. Data from 2019 provides a more accurate reflection of business travel than data from 2020, which was affected by the COVID-19 pandemic. Scope 3 GHG emissions from business travel from 2019 through 2021 will be calculated based on Spend Method and use Distance Method thereafter. Per the boundaries set for business travel, the mode of transport included in the baseline calculations and targets are air, rail, and use of rental cars for business purposes. Air travel data will be received by our global, primary Travel Management Company and will consider origin and destination only. Car mileage will be received by our two primary global suppliers, capturing more than 80% of known volume.

As described above, our 50 by 30 target has been adjusted to the 2017 baseline which changed from 677 Ktonnes CO₂e to 312 Ktonnes CO₂e. Our performance is now assessed against a lower recalculated target of 156 Ktonnes CO₂e. Our commitment remains unchanged in reducing 50% of our Scope 1 and 2 GHG emissions by 2030. As of the end of 2021, the total Scope 1 and Scope 2 GHG emissions were 279 Ktonnes of CO₂e versus 338 Ktonnes of CO₂e reported in 2020.

TechnipFMC Proxy Statement 2022

* Results reflect adjusted 2017 baseline. 

The reduction in GHG emissions is mainly linked to operational initiatives. Our OneFleet team has implemented measures to increase energy efficiencies in our vessels, and one of the vessels underwent an upgrade by installing a hybrid battery system in 2021. This system reduces the number of engines running in operational mode, reducing fuel consumption and, thus, the Scope 1 GHG Emissions. It also brings savings on maintenance, cost of third party service and spare parts.

We continue engaging with our business units, functions and workplaces to identify opportunities to reduce our consumption of fuel and energy and increase our efficiency, and identify key workplaces with higher GHG emissions to focus on reduction opportunities.

The table below describes the annual quantity of Scope 1 and 2 GHG emissions resulting from activities the Company is responsible for and has operational control over, reported in tonnes of CO₂e, reflecting the adjusted 2017 baseline. The Scope 2 GHG emissions are calculated following the location based method, which reflects the average emissions intensity of the grids that supply the energy to our workplaces.

TechnipFMC Proxy Statement 2022

* Results reflect adjusted 2017 baseline. 

Our fleet management team is implementing a plan to reduce its GHG emissions by 50% by 2030 taking into consideration energy efficiencies, vessels upgrade, and renewable fuels, as they become available in appropriate markets.

Scope 1 and 2 GHG emissions from workplaces of the Company in the United Kingdom represent 3% from the Scope 1 and 2 GHG emissions for the total Company.

GHG Emissions Intensity

Our 50 by 30 target is based on an absolute value of Scope 1 and 2 GHG emissions. Due to the nature of our business, it is also important to assess our emissions based on our activity to understand our emissions when project activity increases. Currently, the GHG emissions intensity factor is calculated by dividing the total Scope 1 and Scope 2 GHG emissions by the hours worked. Hours worked has been acknowledged as being most representative of the Company’s overall activity and is frequently used in HSE standards in the industry.

Energy Consumption

The aggregate of (i) the annual energy consumed from activities for which the Company is responsible including the combustion of fuel and the operation of any facility) and (ii) the annual quantity of energy consumed resulting from the purchase of electricity, heat, steam, or cooling by the Company for its own use for the year ended December 31, 2021 was 1,063,845 MWh. 7% of this energy consumed came from renewable sources. Our workplaces are working to increase this percentage. There is a reduction of 17% of the energy consumed in 2021, in comparison from the energy consumed in 2020.

Energy consumed by the Company in the United Kingdom represents 4% of the total energy consumed by the Company.

The energy consumed by workplaces of the Company in the United Kingdom is 4% of the total energy consumed by the Company worldwide.

Our clients’ carbon footprint

We aim to help reduce our clients’ carbon footprint. In the scorecard, we target 33% of our orders to be linked to lower carbon intensity offerings. We will also establish carbon reduction targets for our clients, baselined to 2020. In 2021, we exceeded our expectations by reducing our client’s carbon footprint by 22% against our 2023 target of 33%.

We have lower-carbon solutions for the energy industry. In Subsea, our Subsea 2.0™ products and all-electric offering result in lower carbon footprints. In Surface, iProduction™, E-Mission™, electrification, and methane guiding principles have helped to reduce emissions. As of the end of 2021, lower-carbon solutions such as these made up 20% of our order book.

Water and waste management

We are working towards meeting the 2023 targets of a 10% reduction in water consumption and a 10% increase in the amount of waste generated at our workplaces that goes for recycling or re-use.

At TechnipFMC, we prioritize water conservation and circular water management. We have internal requirements for wastewater management and we promote wastewater treatment and water reuse in our workplaces.

For 2021, the first year of the scorecard, we exceeded our expectations on water consumption by reducing consumption by 9% against a three-year 10% target.

* Results reflect adjusted 2017 baseline.

TechnipFMC Proxy Statement 2022

Reducing material waste and promoting recycling is a key part of our environmental management system and operating strategy. We strive for circularity in our business and operations by reducing material use at source, minimizing waste generation, and increasing waste recycling and reuse. Workplaces worked diligently to look at areas of opportunities to implement initiatives to reduce waste generation and increase waste recycling and material reuse.

The Company has targets to increase the recycling and reuse rate at our workplaces as part of our ESG scorecard. In this area, the first course of action is to reduce waste generation. As of the end of 2021, waste generation was reduced by 22% in comparison with 2020. The recycling rate slightly reduced to 46% in 2021.

* Results reflect adjusted 2017 baseline.

The Company is creating a Global Water Management program and a Global Waste Management program to continue enhancing performance in these areas by implementing an assessment at each workplace and a hierarchy of decision making for water consumption and reuse as well as waste minimization, which will include the identification of recycling and reuse opportunities.

Beyond the scorecard

Our efforts under the Environment pillar go beyond those detailed in the scorecard, as we demonstrate in the following pages.

Climate Change

We created TechnipFMC with the vision to drive real change in the energy industry. Our corporate strategy has always been focused on the successful delivery of this vision, while our Foundational Beliefs represent our fundamental view that how we do business is as important as why we do business. Together, our strategy and our beliefs drive our ESG practices to reshape the industry for a sustainable future.

TechnipFMC Proxy Statement 2022

Our Environmental focus is built upon reducing the carbon footprint of both TechnipFMC and our clients, as well as a focus on waste management. In our business activities and projects, we give priority to renewable energies and sustainable materials and we promote water reuse and encourage recycling.

Renewable Resources

We are already using certain renewable resources for our own energy consumption. Since 2011, we have generated electricity using a wind turbine to power our manufacturing operations in Dunfermline, Scotland. Our facilities in Brazil began with changing to lower energy light bulbs and currently seven of TechnipFMC’s eight operating facilities in Brazil operate with electricity that is 100% from the country’s vast hydro-based resources and other renewable sources.

During 2021, solar panels have been installed in a number of our workplaces and our facility in Singapore installed more than 6,000 solar cells that generates more than 2,945,000 kWh of electricity each year which represents 30% of the electrical power used at the site and reduce CO₂e emissions by 1,260 tons each year. In addition, 80% of the shop floor lighting has been replaced with lower energy LED bulbs, reducing electricity consumption by 62%. Our facility in Hyderabad, India, installed solar panels generating up to 10,000 KWh of solar energy per month and providing up to 15% of the electrical power for the plant.

As more resources become available, we will look to utilize hybrid battery and biofuel solutions as transportation fuel, with the potential for significant conversion of our offshore fleet.

Air Emissions

As part of our environmental management approach, in addition to GHG, we monitor other air emissions on a monthly basis, including:

We monitor air emissions from our workplaces in line with our commitment to manage and minimize the impact of our operations on local air quality.

Governance

In addition to our ESG Committee, TechnipFMC has a non-Board level structure in place to oversee the governance of our ESG strategy. The structure consists of an ESG Steering Committee, an Environmental Operating Committee, and an Environmental Working Group (“EWG”).

The ESG Steering Committee is composed of members from our Executive Leadership Team, which reports to our Board of Directors, as well as from operational and functional management. The main responsibility of this committee is to provide focus on corporate responsibility and sustainability, direction and long-term strategy toward our plans of reduction of GHG emissions, to ensure we have proper policies, programs, and strategies related to environmental stewardship, responsible investment, corporate citizenship, human rights, and ESG risk management. This committee also reviews and monitors the development and implementation of ESG targets, standards, metrics, or methodologies, and drafts the Company’s external communications with respect to ESG matters.

TechnipFMC Proxy Statement 2022

The Environmental Operating Committee is composed of members from our business units and functions that meet to clarify workstream objectives, determine goals, KPIs and milestones; decide on organization and processes related to the environment as part of our ESG strategy; define mitigations and elevate risks and concerns as well as opportunities to the ESG Steering Committee; review and agree on standards, scopes, and products; align their functions in the strategy; and facilitate the implementation of plans to achieve goals and enable targets to be met.

The final part of the structure is the EWG. The EWG reports to the Health, Safety, Environment, and Security (“HSES”) team at corporate level and coordinates a network of HSES specialists from all regions and business units. EWG responsibilities include the setting of environmental programs, supporting the enhancement of environmental performance, and developing global environmental initiatives involving all our regions and projects to reduce our environmental footprint. From the EWG, several working groups are formed to deal with specific topics, such as one created to review the GHG training materials, and one formed to review the tool used to calculate GHG emissions for projects and products.

As part of the environmental governance framework, environmental data is collected on a monthly basis through our Quality, Health, Safety, Environment, and Security (“QHSES”) reporting system from each workplace where TechnipFMC has operational control for both, whether owned or leased workplaces. This data reflects the environmental performance of entities involved (e.g., offices, manufacturing, yards and spoolbases, and fleet operations). A monthly report is distributed to our business units and functions leadership to inform on current conditions and identify opportunities for improvement in managing our environmental footprint in the areas of GHG emissions, energy consumption, waste generation, water consumption, and environmental incidents. These monthly reports are discussed in the EWG meetings to improve reporting metrics, identify opportunities for improvement, and promote data quality and completeness.

Management Systems and Standards

All workplaces and projects within the Company are managed by dedicated QHSES managers and directors, with a team of QHSES professionals responsible for the application of the environmental rules in their respective areas to enable our environmental requirements to be well implemented. Our Code of Business Conduct requires managers to inform employees, contractors, and suppliers of applicable environmental rules, procedures, and expected behaviors, and that people reporting to them receive the required environmental training. Our Code of Conduct is discussed further in the section entitled “Our Compliance Program.”

A key element of the Company’s environmental program is our Global Environmental Management Standard, applicable to all our workplaces. The standard details the minimum requirements for identifying any potential environmental risk of our activities, products, and services, and opportunities to manage the related impacts by identifying and implementing appropriate controls, improving as a consequence our environmental performance. This process allows us to identify, monitor, and mitigate environmental risks at every business level. The standard is fully in line with the ISO 14001 requirements and in compliance with all applicable environmental regulations.

In 2018, TechnipFMC adopted a Global Greenhouse Gas Management standard to promote a responsible and consistent approach to GHG management across the Company and enhance the capabilities in GHG reduction in our business. During 2021, the standard was revised to update and clarify the boundaries of GHG accountability reporting; specify sources of the GHG emissions and provide resources for data collection; and specify responsibilities, among other criteria. The standard sets the methodology to calculate Scope 1 and 2 GHG emissions from fuel and electricity consumption. The revised standard also added the reporting requirement on refrigerants within Scope 1. It further specifies the source for the use of emission factors to align with industry databases appropriate for the activity being reported. Emission factors used are from databases such as the Department for Environment, Food, & Rural Affairs, the Environmental Protection Agency, and the IPCC Guidelines for National Greenhouse Gas Inventories.

The Company established the Scope 3 GHG Management standard in 2021 to promote completeness and consistency in the accounting for and reporting on Scope 3 GHG emissions from the Company’s value chain. It describes the

TechnipFMC Proxy Statement 2022

methodology that is followed to select the categories the Company considers in the Scope 3 GHG emissions inventory, their reporting boundaries, and how these emissions are calculated and reported.

In addition to reducing emissions in our business through our product offering, we have also implemented standards for our workplace to manage and reduce our environmental and carbon footprint. Our GHG Mitigation Hierarchy of Control was established in 2021 to provide the Company with the process to determine the best actions to reduce GHG emissions at our workplaces. It describes the carbon management hierarchy to avoid, reduce, replace or, as a final option, offset, the Company’s carbon emissions. Our Green Office program was revised during 2021. This program guides offices across the organizations to identify and implement initiatives to manage their environmental footprint including lowering GHG emissions, reducing water consumption and waste generation, and increasing waste recycling and material reuse. It is the objective of this program that offices continuously assess and improve their environmental footprint.

We continue to commit resources and expertise to eliminate hazards, reduce risks, and prevent injury, ill health, and environmental pollution related to our activities through design, process improvement, and technologies. As such, 37 entities had an active ISO 14001 certification during 2021. The management system used to certify these entities is the same used across the organization. As with the environmental performance data, data on ISO certified workplaces is shown after the Spin-off from Technip Energies.

Environmental Events

We have a consistent procedure for recording, reporting, and investigating environmental incidents, using our QHSES incident management and analysis tool. In case of an unexpected environmental event, containment and mitigation measures are immediately initiated. Incidents are immediately recorded and assigned an “actual” and “potential” impact rating. We formally investigate any potential or actual event then implement corrective actions to prevent reoccurrence. Events deemed as having high-level consequences are notified to the management team through a “first alert” process and all high-potential consequence incidents are subject to in-depth investigation.

In order to manage our environmental incidents effectively, we also monitor our total environmental incident rate (“TEIR”) (by reference to 200,000 worked hours) and our total relevant incidents rate (“REIR”) (by reference to 200,000 worked hours). The total REIR captures all significant environmental incidents within our responsibility. This indicator enables us to understand the effectiveness of our incident management system. The REIR also assists us in monitoring our actual risk in terms of environmental incident management. It covers all incidents of a certain environmental impact, triggering management attention, including incidents which:

The REIR for 2021 is 0.01 versus 0.09 in 2020. The Company did not have any significant incidents with an adverse impact on the environment in 2021.

TechnipFMC Proxy Statement 2022 

Social

The second pillar of our ESG strategy is Social. Its roots are also in Sustainability, one of our Foundational Beliefs, with particular reference to our impact on people and the communities where we operate. Our Social actions are also closely linked to two of our other Foundational Beliefs, Integrity and Respect. Our actions seek to empower our people to be the difference, while helping TechnipFMC exhibit the power of inclusion by exercising the value of diversity.

There are three Social commitments on our ESG scorecard which drive intentional actions in support of our inclusion and diversity journey – Awareness & Culture, Fair Representation, and Community.

Our Social actions and commitments are not limited to those covered by the scorecard. The scorecard goals and our ongoing progress are detailed below.

Our Scorecard Commitments

Fair Representation

TechnipFMC is committed to improving the recruitment of female graduates and the proportion of underrepresented populations in senior management. As at the end of 2021, our global graduate program consisted of 47% female participants – exceeding our scorecard target of 45% by the end of 2023.

Under our 2021-2023 scorecard, we also aim to increase underrepresented populations in senior management: our target is to increase the percentage of females in senior management to 26% by the end of 2023. As at the end of 2021, we exceeded our targets, with female representation in senior management standing at 21%. We further aim to increase the percentage of underrepresented nationalities (nationalities outside North American and European countries) and U.S. minorities in senior management to 20%, and as at 2021 we have already met our target, with 20%. The protection of personal information varies widely from country to country thereby making it difficult to track certain characteristics. Instead, we link to nationality and U.S. minorities, encouraging the development of local talent around the globe. Given the evolving nature of this population, we will continue to keep leadership succession high on the agenda to maintain or further improve fair representation.

A goal to designate a minimum of one female to each Leadership Succession Plan and resulting efforts to identify internal talent early has translated into an increase in depth and representation of females and underrepresented nationalities and U.S. minorities. We have increased representation of females on our Executive Leadership Team by the promotion of our Executive Vice President People & Culture and Executive Vice President of New Energy Ventures to the team in 2021.

Awareness & Culture

In February 2021, our Inclusive Leadership Learning journey began for all managers. The launch of this curriculum

TechnipFMC Proxy Statement 2022

focused on the development of inclusive behaviors, the importance of allyship, and eliminating unconscious biases. This initiative was recognized by employees by winning the Company’s internal 2021 Driving Change Awards in the Employee Development and Engagement category.

As part of the scorecard, our goal is for 100% completion of this e-learning by managers by 2023. In 2021, we exceeded our expectations with 100% of senior managers and 54% of managers completing the e-learning, against our 2023 target of 100%.

Community

TechnipFMC is focused on making a long-term, positive impact in the communities where we live and work. We encourage our employees to actively engage in ‘giving back’ through active engagement in health, education, and local employment. Initiatives include our iVolunteer global volunteering program, which encourages employees to perform four hours of volunteering each year at the Company’s expense, and promoting science, technology, engineering and mathematics (“STEM”) careers.

We are working towards participating in 800 volunteering initiatives and 150 STEM initiatives by 2023. As at the end of 2021, we had achieved 136 volunteering and 68 STEM initiatives, being 17% and 45%, respectively, towards our 2023 ESG scorecard goal. These levels of participation occurred in an environment that remained largely impacted by COVID-19’s effects on in-person contact and events, which limited traditional volunteering opportunities and STEM events. However, our employees still responded with their typical dedication and generosity. In 2022, we will introduce a global solution that will provide endless opportunities and flexibility in engaging our employees and building our philanthropic story.

Beyond the Scorecard

There are many initiatives that we do not measure in the scorecard, such as our people’s charitable initiatives and activities, and more formal schemes such as career development. We explore some of those areas over the following pages.

Community Highlights

	COVID-19 Relief Support in India Employees in our Hyderabad, India, location donated 5,000 three layered reusable face masks and 1,500 face shields to Rachakonda Police Department.
	Ghana’s Pink Volunteers - Breast Cancer Walk and Run In October 2021 our Ghana employees volunteered and raised funds to promote Breast Cancer Awareness and alleviate the cost of treatment for cancer patients who cannot afford the cost of treatment.

TechnipFMC Proxy Statement 2022

 

	TechFest’s STEM Next TechnipFMC sponsored TechFest’s STEM Next essay competition in Scotland for students aged 16 to 18 which aims to explore the future of STEM research and encourage young people to enter into STEM careers.
	STEM Day goes BOLD-ly into the virtual world TechnipFMC’s BOLD employee resource group held its 4th Annual STEM Day and transformed the in-person event into a virtual experience for nearly 400 students across the Greater Houston area.
	DIY Face Shield Project TechnipFMC’s Asiaflex Products team in Malaysia made 1,500 face shields for front-line staff at a COVID-19 quarantine center.
	Making a difference together TechnipFMC’s Measurement Solutions document controllers collected garbage in the walking paths around various neighborhoods in Kongsberg.

TechnipFMC Proxy Statement 2022

STEM Lectures in Brazil TechnipFMC’s engineers volunteered with the Project Enterprising Trail and young apprentices in Brazil on STEM topics that focused on LEAN and women in STEM.

TechnipFMC Proxy Statement 2022

Governance

The third pillar of our ESG strategy is Governance, which is touched by all of our Foundational Beliefs: Safety, Quality, Sustainability, Integrity and Respect.

Each of the commitments covered in our ESG scorecard is tied closely to making a positive impact on our people and the communities where we operate – leadership in HSES, human rights due diligence, and ethics and compliance training – but also links to the aspirations of our other Foundational Beliefs, because how we do business is as important as why we do business.

Our Governance actions and commitments are not limited to those covered by the scorecard. Our progress towards our scorecard commitments are detailed below.

Our Scorecard Commitments

Leadership in HSE
At TechnipFMC, we are committed to upholding a strong safety culture by rolling out Serious Incidents and Fatalities Prevention (“SIFP”) programs. For 2021, the first year of the scorecard, we exceeded our expectations by 30%, with 244 SIF projects suggested out of a three-year target of 400.

Our SIFP program is a cornerstone of our prevention mindset. It is a proactive, high-impact risk prevention program which aims to shift the organization’s focus from reactive to proactive risk reduction. The objectives are to prevent serious injuries, to proactively reduce our overall risk profile by putting mitigation strategies in place, and to bring visibility to critical issues requiring the support of leadership.

Our further actions in HSE are discussed in greater detail in the Health, Safety, and Environment section of this report in the following pages.

Human rights due diligence
We are raising the bar on workers’ welfare through human rights audits in high-risk countries. Under our ESG objectives, we have undertaken a commitment to complete 100% of the human rights audits scheduled each year on our 100 most significant suppliers in countries where there are high risks of human rights abuses. In 2021, we laid the groundwork for all of the audits (developing questionnaires, selecting suppliers, creating an audit toolbox, etc.) and completed the first phase of the audits.

As at the end of 2021, we met our expectations for the first year of our scorecard by completing 33% of the audit of our most significant suppliers. The audit consists of three stages, of which we have completed the first: we issued our Self-Assessment Questionnaire (that was developed based on industry standard best practices) and received a 100% response rate from suppliers. Based on these questionnaire responses, and with the use of due diligence tools, we then completed a due diligence review of all 100 suppliers, and met our 2021 goal of completing the first round of desk audits for selected suppliers. Our goal is to complete the second and third stages of the audit during the years 2022-2023, comprising desk audits and on-site/virtual audits for the selected suppliers. In addition, an annual review will be conducted each year going forward to update the selected supplier list as needed.

Ethics and compliance
Our Code of Business Conduct helps us recognize and address the ethical dimensions of our everyday decisions. It provides practical guidance about what is expected of all of us. Board oversight of our ESG strategy and executive remuneration further ensures fairness. This commitment targets 100% completion of our Ethics and Compliance e-learning by all managers every year. We systematically roll out the program and are measuring completion rates of the courses.

For 2021, the first year of the scorecard, we met our expectations 100%, with all managers taking required ethics and integrity courses this year.

TechnipFMC Proxy Statement 2022

Beyond the Scorecard

Our efforts under the Governance pillar go beyond those detailed in the scorecard, as we demonstrate in the following pages.

Our Compliance Program

How TechnipFMC conducts its business across the world is as important as why TechnipFMC does business. We act in accordance with our core values and our Foundational Beliefs in all that we do. We aspire to develop business relationships with like-minded partners who are guided by a similar set of principles of business conduct. Integrity is one of the most critical cornerstones of the way we conduct business, and we hold ourselves to the highest integrity principles, which drive our compliance program.

Our Code of Business Conduct is built on our Foundational Beliefs of safety, integrity, quality, respect, and sustainability, and gives us a common language and playbook for decisions and actions that help us live our core values. Available in 13 languages, our Code of Business Conduct helps us recognize and address the ethical dimensions to our everyday decisions. In addition to our Code of Business Conduct, we maintain a world-class compliance program that is designed on a risk-based approach and focuses on the following priorities:

Our compliance program is supported by a global team of professionals embedded across our organization, who are responsible for the provision of advice, counsel and training, as well as auditing of our program and its controls. This is designed to mitigate and monitor compliance risk in support of our operations. Our program is led by a Chief Compliance Officer, who reports dually to our Executive Vice President and Chief Legal Officer, and to the Chair of the Board of Directors’ Environmental, Social, and Governance Committee. Our Chief Compliance Officer regularly reports compliance matters to management and formally reports to the Committee quarterly. These reports include continuous enhancements to our compliance program and allegations regarding potential non-compliance with our Code of Business Conduct.

We believe it is up to all of us to uphold the principles in our Code of Business Conduct. We encourage employees and others to raise questions and concerns to ensure that we are leading by example. Suspected breaches of our Code of Business Conduct can be reported through various means, including through an independent third party via the dedicated reporting helpline. TechnipFMC has a zero-tolerance policy on retaliation against employees for reporting suspected violations of our policies or Code of Business Conduct.

TechnipFMC Proxy Statement 2022

Anti-Corruption and Anti-Bribery Compliance Controls

The Company is committed to conducting business across the world ethically, lawfully, and in accordance with our core values and our Foundational Beliefs. Therefore, all employees, as well as our business partners and supply chain, are expected to conduct their activities in an ethical and lawful manner on a day-to-day basis.

All acts of fraud and corruption (including bribes, kickbacks, and self-dealing) are strictly forbidden. We compete fairly on the strength of our technology, service, and execution excellence. We do not tolerate corruption in any form and do not make or accept improper payments to obtain or retain business with those in government or the private sector, or as a reward for awarding subcontractor or supplier contracts. We are committed to complying with all international and national legislation against illegal payments, including prohibitions on facilitation payments (to expedite routine and administrative government action) except in extraordinary circumstances where the safety or security of an employee is in immediate danger.

We conduct due diligence of potential business partners before entering into a relationship to better enable us to identify partners that share our commitment to ethical business practices and partners whose other relationships do not create the appearance of a potential conflict of interest. Our Code of Business Conduct highlights our commitment to integrity, and in conjunction with our standards and procedures, we have implemented a variety of anti-bribery and corruptionrelated operational standards that translate our general principles into concrete operating procedures.

We have also developed an Anti-Bribery and Corruption Standard, which applies to all our directors, officers, employees, and contracted personnel, aimed at providing a clear and comprehensive operational framework for the conduct of our business in all of the countries in which we operate. The Anti-Bribery and Corruption Standard sets out the Company’s principles for strict compliance with applicable anti-bribery and corruption laws.

The Company pays particular attention to indicators that could cast doubt on the honesty and integrity of third parties involved in our business. We have developed a Business Partner Standard, which applies to all our directors, officers, employees, and contracted personnel. It establishes the due diligence requirements and procedures for third-party government intermediaries and joint ventures/consortia partners, and enables us to assess and manage bribery and corruption risks while conducting business globally.

We have a Gifts, Hospitality, and Travel Standard, which applies to all our directors, officers, employees, and contracted personnel, setting forth our rules related to the receipt or provision of gifts, hospitality, or travel, and establishing procedures for the approval, reporting, and accounting of such. The Gifts, Hospitality, and Travel Standard serves to assist employees in ensuring that gifts and hospitality, whether given or received as part of a usual courtesy of business, are not and cannot be considered as bribes.

We also have a Social Donations, Sponsorships, and Charitable Contributions Standard, which applies to all our directors, officers, employees, and contracted personnel, setting forth our rules relating to making contributions to our communities. As a responsible corporate citizen, TechnipFMC believes in contributing to the communities where we conduct business around the world by supporting worthy causes, donations, and activities. Under appropriate circumstances, social donations, sponsorships, and charitable contributions provide an important way for TechnipFMC to play a constructive role in the societies and communities in which we live, work, and conduct business. This standard, which applies to all our directors, officers, employees, and contracted personnel, sets forth our rules associated with these activities so that our contributions are not misused for improper purposes, such as to disguise illegal payments to government officials.

Our Code of Business Conduct and its related standards are applicable to all directors, employees, business partners, and supply chain members, as well as all of our business transactions, and all of our majority-owned or controlled subsidiaries. We will also use our best efforts to induce our joint venture and consortium members to adopt the standards or agree to abide by an equivalent set of standards. In sum, our compliance program is designed to effectively mitigate and monitor risks relevant to our enterprise to enable us to preserve the interests of our stakeholders in accordance with our core values and Foundational Beliefs. 

TechnipFMC Proxy Statement 2022

Code of Business Conduct

Our Code of Business Conduct is built on our Foundational Beliefs and gives our directors, officers, and employees a common language and playbook for decisions and actions that help us live our core values. We are committed to establishing and maintaining an effective compliance program that is intended to increase the likelihood of preventing, detecting, and correcting violations of Company policy and the law. Moreover, we have a helpline in place for employees, officers, directors, and external parties to anonymously report violations of our Code of Business Conduct or complaints regarding accounting and auditing practices. Reports of possible violations of financial or accounting policies are reported to our Audit Committee.

We will disclose amendments to, or waivers of, our Code of Business Conduct that are required to be disclosed under the U.S. Securities and Exchange Commission (“SEC”) and NYSE rules or any other applicable laws, rules, and regulations. Any waiver of our Code of Business Conduct for our officers and directors must be approved by the Board or a relevant Board committee. We have not made any such waivers, and do not anticipate making any such waiver.

Human Rights

Respect is one of our Foundational Beliefs. It guides how we fundamentally do business and what we never compromise on, no matter the circumstances. We believe that everyone is entitled to honest, fair, and courteous treatment. We do not tolerate any form of modern slavery and we express a strong commitment for respecting human rights and are against the use of child, forced, indentured, or involuntary labor, regardless of where we conduct business.

Our Code of Business Conduct reflects our commitment to acting ethically and lawfully and recognizing human rights on a global basis. It is our policy that our Code of Business Conduct be shared and discussed with our clients, suppliers, and business partners to better explain our rules of conduct and reinforce our culture of accountability. We aim to develop business relationships with like-minded subcontractors, suppliers, and business partners who are guided by a similar set of principles of business conduct, and aspire to only do business with counterparties who respect human rights and uphold labor laws.

TechnipFMC has published its statement on slavery and human trafficking for the financial year ending December 31, 2020 in accordance with section 54 of the U.K. Modern Slavery Act 2015. This document is available on our website at www.technipfmc.com under the heading “About us > Ethics and Compliance > Slavery and Human Trafficking Statement.” Our statement addressing 2021 shall be published later this year on our website.

Our employees are encouraged and expected to report violations or suspected violations of our Code of Business Conduct. Various channels are available, including the option to report concerns to their managers, to anyone in the corporate compliance or legal department, the employee’s human resources representative, or an independent third party via a dedicated reporting helpline and website.

We treat all reports of suspected violations of our Code of Business Conduct confidentially and will share the information only with those who have the responsibility and authority to investigate and properly resolve the issue. In addition, we have a zero-tolerance policy on retaliation against employees for reporting suspected violations of our policies or Code of Business Conduct or for cooperating with an investigation. We encourage employees and others to raise questions and concerns to ensure that we are leading by example.

The Company endeavors to ensure compliance with human rights regulations and principles within the scope of our operations and in accordance with the following international human rights regulations and principles:

TechnipFMC Proxy Statement 2022

The Company also remains a member of the United Nations Global Compact.

The Company also adopted a Human Rights Standard setting forth recognized human rights principles so that our operations are executed in compliance with the same and so that everyone with whom we work is treated with respect and dignity. Our Standard codifies the Worker Welfare Principles developed by Building Responsibly. The Company remains a proud member of this group of leading engineering and construction companies that are working together to promote the rights and welfare of workers across the industry, representing more than 580,000 employees and operating in over 100 countries. We continue working on our human rights strategy to embed respect for human rights in our operations and business relationships and to promote the protection of human rights for our employees in the workplace and across our supply chain as a foundational business practice. We have created an internal Human Rights Working Group, bringing together our support functions and operations to foster and promote a better working environment for our employees and our suppliers. The group conducted an internal human rights risk assessment to assess our processes against international standards, Building Responsibly principles, and our clients’ human rights expectations. The assessment also looked at the standardization of our processes across the Company and at our human rights expectations towards our suppliers. For example, we have developed Suppliers and Subcontractors Integrity expectations including commitment to human rights principles and have started deploying these expectations with our partners, requiring adherence to the same in the execution of their operations. Also, we continue to assess how our company-wide due diligence processes and monitoring processes could be reinforced in this area.

TechnipFMC Proxy Statement 2022

Corporate Governance

The Board believes that the purpose of corporate governance is to facilitate effective oversight and management of the Company to maximize shareholder value in a manner consistent with our vision statement, purpose, core values, Foundational Beliefs, Code of Business Conduct, and all applicable legal requirements.

The Board provides accountability, objectivity, perspective, judgment, and, in some cases, specific industry or technical knowledge or experience. In carrying out its responsibilities to our shareholders, the fundamental role of the Board is to ensure continuity of leadership; the implementation, understanding, and pursuit of a sound strategy for the success of our Company; and the availability of financial and management resources and the implementation of control systems to carry out that strategy.

Governance Guidelines and Key Board Practices

Our Corporate Governance Guidelines (“Governance Guidelines”) contain general principles and practices regarding the function of the Board and its committees. The Governance Guidelines establish a framework to guide the Board in its oversight responsibilities in a manner that is independent of management and aligned with the interests of our shareholders. The Board reviews these governance practices, the laws of England and Wales under which we are incorporated, the regulations, directives, and decisions of the European Union, the rules and listing standards of the NYSE, and the regulations of the SEC, as well as best practices recognized by governance authorities, to benchmark the standards under which it operates.

Key Elements and Practices

TechnipFMC Proxy Statement 2022

Shareholder Engagement

The Company annually seeks feedback through engagement with shareholders, and we continued this practice in 2021. Our relationship and ongoing dialogue with our shareholders is an important part of our Board’s corporate governance commitment. For our 2021-2022 engagement, we contacted proxy advisory firms and our top shareholders representing approximately 46% of our Ordinary Shares outstanding. Management, and in some instances, our ESG Committee Chair, held meetings with proxy advisory firms and shareholders representing approximately 16% of our Ordinary Shares outstanding.

Through these engagements, the Company received feedback on our strategic and financial performance, executive compensation, Board composition, and governance topics, as well as important environmental and social issues. Some shareholders did not require a meeting as they either indicated their support for our ESG, compensation, and governance practices or did not have questions regarding our ESG, compensation, or governance practices.

Furthermore, in early 2022, we also engaged our shareholders in order to discuss more broadly our Board leadership structure and diversity, general Board practices, our executive compensation program, and our sustainability efforts. We welcomed our shareholders’ feedback and suggestions in maintaining the balance between strengthening the link between pay and performance, retaining and motivating our executives, and appropriately compensating our executives for outperformance, while increasing long-term shareholder value.

TechnipFMC Proxy Statement 2022

 

Board Alignment with Shareholder Feedback 

What We Heard	What We Did
Reinforce the link between incentive measures and business strategy and market conditions	►   The majority of our long-term equity plan for our executive officers continues to be performance-based, consisting of 70% Performance Share Unit awards (“PSUs”) and 30% Restricted Stock Unit awards (“RSUs”).
	►    We updated our Compensation Peer Group and Relative TSR Peer Group to reflect changes in our business environment.
	►    We introduced ESG Performance as a measure in our annual cash incentive plan, in order to drive accountability and strengthen the link between our compensation program and our ESG commitments and objectives. This measure will make up 25% of our annual cash incentive plan and will pay out based on the achievement of our ESG 2021-2023 scorecard objectives.
	►    We will continue to include Adjusted EBITDA as a Percentage of Revenue and Free Cash Flow from Operations as measures in the annual cash incentive plan, with an objective to increase our operating profitability, leverage cost efficiencies, maintain the financial health and liquidity of the Company, and drive shareholder value creation.
	►    In 2022, we will reintroduce Return On Invested Capital (“ROIC”) as a performance measure in addition to relative TSR in the annual long-term incentive award grant. We believe that ROIC, combined with relative TSR, strongly align with shareholder interests and are meaningful ways to drive long-term performance.
	►    We adjusted the 2022-2024 relative TSR payout scale to pay at target when achieving a 50th percentile position versus our TSR Peer Group. This change will more closely align payouts with equity returns experienced by shareholders.
Increased focus on sustainability and business impact of climate change	►    In 2021, we announced our 50 by 30 initiative which is our commitment to reduce emissions from our own operations, with a target of 50% reduction of CO2 equivalent emissions by 2030 (Scopes 1 and 2). Our Scope 3 target is currently being defined.
	►    We are transitioning our business toward the energy transition, evolving with our client-base, with the establishment of New Energy Ventures which will primarily focus on greenhouse gas removal, offshore floating renewables, and hydrogen.
Creation of Shareholder value	►    We completed the Spin-off of Technip Energies in 2021, occurring by way of a pro-rata dividend to the Company’s shareholders of 50.1% of Technip Energies shares. Each of the Company’s shareholders received one Technip Energies share for every five shares of the Company.
Effective Board size and importance of balanced Board leadership	►    Upon completion of the Spin-off, we reduced the size of our Board from 15 to 10 directors, which was further reduced to 9 at last year’s Annual Meeting. We continue to balance our Board leadership between our Executive Chair and Lead Independent Director.

 

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Leadership Structure of the Board

 

The Board believes that our shareholders are best served by a Board that has the flexibility to adjust our leadership structure to the evolving needs of the Company. In 2019, with the completion of the post-merger integration, the Board determined that combining the roles of Chair and CEO, paired with a strong Lead Independent Director, would be in the best interests of our shareholders. Pascal Colombani served as our Lead Independent Director until the closing of our Spin-off, at which time Claire S. Farley was appointed as the Board’s Lead Independent Director.

 

Each of the Chair’s and Lead Independent Director’s specific responsibilities are listed below:

 

Executive and Board Leadership

Douglas J. Pferdehirt Chair of the Board and CEO
	Key Responsibilities
	► All strategic and operational aspects of the Company
	► Serving as the principal external spokesperson for the Company with analysts, investors, media, and clients
	► Managing all executives of the Company
	► Leading the Board
	► High-level government and client engagement

 

Independent Leadership

Claire S. Farley Lead Independent Director
	Key Responsibilities
	► Approving Board meeting schedules and agendas
	► Presiding over all meetings of the Board at which the Chair and CEO is not present
	► Calling meetings of the Board, as necessary   ► Presiding over executive sessions of the independent directors
	► Acting as the liaison between the independent directors and the Chair and CEO   ► Monitoring and reporting to the Board any conflicts of interests of directors
	► Participating in the Company’s shareholder engagement program, when required

 

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Our Board believes that a combined Chair and CEO leads to a more decisive and effective leadership, both within and outside the Company. The CEO is the individual with primary responsibility for managing the Company’s day-to-day operations and is best positioned to chair regular Board meetings as the Board discusses key business and strategic issues for the benefit of the Company and its shareholders.

 

This leadership structure is balanced by the oversight of the remaining members of our Board, each of whom is an independent director, and ensures that the Board functions independently. Moreover, only independent directors serve on our Audit Committee, Compensation and Talent Committee, and ESG Committee. In addition, the Board nominated Ms. Farley to continue to serve as Lead Independent Director, who has the ability to call meetings of the Board and presides over executive sessions of the Board.

 

For transparency and alignment, our Compensation and Talent Committee consults all independent directors in setting our CEO’s compensation, but the authority to approve our CEO’s compensation remains with the fully independent Compensation and Talent Committee. In addition, our CEO’s annual performance objectives are reported and evaluated by both the Compensation and Talent Committee and the ESG Committee to ensure a comprehensive, inclusive, and diverse analysis and evaluation of our CEO’s annual performance.

 

Finally, the Board believes that the Company’s Governance Guidelines, and the quality, stature, and substantive business knowledge of the Board, as well as the Board’s culture of open communication and transparency with the CEO and senior management, are conducive to Board effectiveness with a combined Chair and CEO position.

 

As our Company evolves, the Board will regularly evaluate the Board leadership structure to ensure it continues to meet the needs of the Company, and to ensure that it provides strong, independent oversight for our shareholders. In particular, as part of this evaluation, the Board will consider the outcomes of the annual Board and committee selfevaluation process and feedback received from shareholders, in addition to other factors, including the current state of the Company’s strategy and operations, recent Company performance, market and industry factors, and peer company practices.

 

Board Composition and Criteria for Board Membership

Our Board seeks directors whose complementary and diverse knowledge, experience, and skills provide a broad range of perspectives and leadership expertise in areas critical to the Company. These include expertise in the energy and engineering industry, strategic planning and business development, business operations, sustainability and emerging technologies, finance and audit, corporate governance, and other areas important to the Company’s strategy and oversight. Our Board also assesses director age, tenure, and Board continuity and strives to achieve a balance between the perspectives of new directors and those of longer-serving directors with institutional insights.

 

Criteria for Board Membership in Governance Guidelines

Our Governance Guidelines state that candidates for our Board, in order to be nominated by our ESG Committee, must be qualified and eligible to serve under applicable law, our articles of association (“Articles”), and the NYSE rules, and should have:

 

	►	A high level of personal and professional integrity
	►	Strong ethics and values
	►	The ability to make mature business judgments

 

In addition, the Governance Guidelines provide that the ESG Committee may consider additional factors when determining whether a candidate is qualified to serve on our Board, including the candidate’s:

 

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	►	Experience in corporate management, as a board member of another publicly held company, and in finance and accounting and/or compensation practices
	►	Professional and academic experience relevant to our industry
	►	Leadership skills
	►	Cultural perspective and diversity of thought
	►	Ability to commit the time required for service on our Board

 

Board Composition, Refreshment, and Succession Planning

The ESG Committee regularly evaluates the composition of our Board and considers whether the Board has the right set of backgrounds, experience, skills, diversity, and qualifications to effectively oversee our Company’s strategy and our executives’ execution of that strategy. One of the key goals of our Board composition is to ensure we have the right skills and experience on our Board to execute our strategic goals successfully and efficiently. As such, the Board actively considers diversity of backgrounds, experience, skills, geography, and perspectives, including gender and cultural diversity, in the recruitment and nomination of directors. Our current directors possess a diversity of such skills, experience, and expertise that are relevant to our business, such as the following:

 

	►	Executive leadership
	►	Industry experience
	►	Corporate governance and legal
	►	Strategy and risk management
	►	Cultural and gender diversity
	►	Sustainability and emerging technologies
	►	Outside public company board service
	►	Finance and audit
	►	Acquisition, divestment, and investment portfolio management

 

From 2019 through 2021, our ESG Committee, with the assistance of Spencer Stuart, a nationally recognized director search firm, identified, screened, and assessed the capabilities of potential new director candidates. This resulted in the Company identifying and appointing new Board members in 2019, 2020, and 2021: Mr. Yearwood and Mses. Øvrum and Zurquiyah, respectively, as part of our ongoing Board refreshment focus.

 

In addition to evaluating directors’ skills and experience that tie directly to our business strategy, the ESG Committee also regularly considers any changes in the professional status, independence, outside commitments, and other public company directorships of our directors to assess the potential impact of these changes on the Board’s effectiveness.

 

As further described in our Governance Guidelines, a non-executive director whose birth date occurs prior to July 1 must retire at the annual general meeting of shareholders of the Company during the year of such director’s 72nd birthday, and a non-executive director whose birth date occurs on or after July 1 must retire at the annual general meeting of shareholders of the Company the year following such director’s 72nd birthday. Our Board may waive this policy on a case-by-case basis on the recommendation of the ESG Committee if it deems a waiver to be in the best interests of the Company and its shareholders.

 

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Board and Committee Evaluations

The Board believes that a rigorous evaluation process is an essential component of strong corporate governance practices. The ESG Committee reviews regularly the Board’s composition, including the key skills and experience represented on the Board, to ensure it meets the changing needs of the business, also taking into consideration the outcomes of the annual Board and committee self-evaluation process, feedback received from shareholders, and evolving market best practices with respect to governance.

 

The ESG Committee’s annual evaluation process to evaluate Board effectiveness includes a full Board evaluation and committee evaluations.

 

Process is Initiated	Evaluation Distributed	Analysis	Presentation of Results
The ESG Committee reviews and approves the process to evaluate the performance of the Board of Directors and its three committees.	Questionnaires are distributed through a third-party web-based platform. The process encourages candid responses from our directors and promotes productive discussions.   Questionnaires solicit feedback on issues, including:   ►    Board/Committee operations   ►    Succession planning   ►    Committee composition, processes, and effectiveness   ►    Board dynamics   ►    Director preparation, participation, and contribution   ►    Management preparation and communications	Completed questionnaires are analyzed and summarized by Company management and reported to the ESG Committee Chair.	The ESG Committee Chair reviews the results of the evaluations with the full Board and each committee to determine areas of opportunity.

 

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Board Commitments

In conjunction with our Board and committee evaluations, our ESG Committee is responsible for ensuring that our directors possess and demonstrate a willingness to devote the required time and attention to Board duties and to otherwise fulfill the responsibilities required of directors.

 

As noted above, a majority of our directors serve on no more than two other public company boards of directors. Our ESG Committee and our Board believe that each of our directors has demonstrated, and will continue to demonstrate, her or his expertise and ability to dedicate sufficient time to carry out Board duties effectively and diligently. Our directors’ outside board service or other commitments did not limit their ability to devote the required time and attention to their duties as directors of the Company as evidenced by the 100% attendance rate at our 2021 Board meetings for all our current directors.

 

In assessing our directors’ ability to devote the required time to his or her Board duties, the ESG Committee reviews the nature of the other companies on which they serve, including whether any board service is with a company that is either affiliated with their employer or affiliated with one of their other directorships. The Committee also discusses with each director the time commitments and expectations of his or her other board duties to ensure that he or she can continue to serve the Company and its shareholders effectively.

 

Mr. Carvalho Filho’s duties as a director of Companhia Brasileira de Distribuicão (Grupo Pão de Açúcar) (“GPA”) include serving on the board of a GPA affiliate, Cnova N.V. GPA has a 34% ownership interest in Cnova N.V. and three out of nine directors on Cnova N.V.’s board of directors are appointed by GPA. As such, Mr. Carvalho Filho’s role and time commitment at these two companies differs from serving on two traditional, unrelated publicly traded companies. Notably, Mr. Carvalho Filho has attended 100% of all Board meetings since the formation of TechnipFMC. His preparedness for meetings and active engagement with our Board and management continues to demonstrate his commitment to our Company and its shareholders.

 

Ms. Zurquiyah currently serves on the boards of directors of two other public companies: CGG S.A., for which she also serves as the chief executive officer, and Safran S.A. As a diverse director, Ms. Zurquiyah contributes her unique global background and leadership experience, oil and gas industry expertise, and experience in sustainability and technology, to our Company. Ms. Zurquiyah has demonstrated commitment to our Company and its shareholders since her election and has attended all Board and Committee meetings. In addition, in line with guidelines of certain institutional investors, Ms. Zurquiyah has informed the Company that she intends to resign from the board of directors of Safran S.A. before the end of 2022.

 

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Shareholder Recommendations for Future Candidates

Shareholders may submit recommendations for future candidates for election to the Board for consideration by the ESG Committee by writing to us at Hadrian House, Wincomblee Road, Newcastle upon Tyne, NE6 3PL, United Kingdom, Attention: Corporate Secretary. All recommendations from shareholders will be reviewed by the ESG Committee. The ESG Committee evaluates nominees recommended by shareholders in the same manner in which it evaluates other nominees. Please see “Criteria for Board Membership in Governance Guidelines” above.

 

Board Diversity

Our Board of Directors demonstrates a broad range of diversity, across gender and race or ethnicity, in addition to their diversity of skills and experiences. The following charts show the composition of our Board by gender and racial or ethnic diversity.

 

 

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Enterprise Risk Management

Executive management is responsible for the day-to-day management of the risks the Company faces, while our Board, as a whole and through its various committees, has responsibility for the oversight of risk management for the Company. The Company has an Enterprise Risk Management (“ERM”) process and framework to identify and evaluate varying levels of risk and their potential impact on the Company, as well as steps to further mitigate those risks. As part of the ERM framework, our senior management, led by our CEO, undertakes a process that identifies, categorizes, and analyzes the relative severity and likelihood of the various risks to which the Company is or may be subject. In addition, our Board and its committees receive periodic reports from senior management that identify and assess significant enterpriserelated risks and address mitigation strategies and plans implemented or proposed for each key risk.

 

In addition, while the Board has ultimate responsibility for overall risk management oversight, it has designated each of its three Board committees with oversight of certain risks within their own areas of responsibility, as indicated in the table below.

 

Audit	Compensation and Talent	ESG
► Legal and regulatory compliance related to financial statements and disclosures   ► Financial reporting and internal controls   ► Liquidity   ► Contract management   ► Cybersecurity   ► Other risks, such as taxes and foreign exchange   ► Insurance	► Legal and regulatory compliance related to compensation and benefits   ► Compensation policies and practices (including employee benefit plans and administration of equity plans)   ► Procedures for management succession   ► Diversity and inclusion	► Legal and regulatory compliance related to corporate governance   ►  Director succession   ►  Crisis management preparedness   ► Environmental, social, and governance

 

Health, Safety, and Environment (“HSE”) risks and mitigating actions are reported to the Board of Directors by our Chair and CEO for consideration and advice. HSE is one of the core risk areas for our Company and therefore the Board of Directors has determined that the responsibility for this area is shouldered by our Chair and CEO.

 

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Committees of the Board of Directors

In 2020, to better reflect our focus on corporate responsibility and sustainability at the Board level, the originally named Nominating and Corporate Governance Committee’s charter was substantially expanded to include oversight of the Company’s policies, programs, and strategies related to environmental stewardship, responsible investment, corporate citizenship, human rights, and ESG risk management. The charter of this committee, now our ESG Committee, was amended to refine its focus on ESG matters, with responsibility for reviewing and monitoring the development and implementation of ESG targets, standards, metrics, or methodologies, and reviewing the Company’s public disclosures with respect to ESG matters.

 

This year, to enhance our commitment to our employees, we changed the name of our Compensation Committee to the Compensation and Talent Committee, and the Committee’s charter was expanded to include oversight of succession planning of executive officers and senior management, with an enhanced focus on training and development and diversity and inclusion across TechnipFMC.

 

We also amended the charter of our Audit Committee to include responsibility for reviewing the metrics of certain health, safety, and environmental matters. Oversight for health, safety, environmental, and security matters remains with the full Board.

 

Accordingly, our Board currently has an Audit Committee, a Compensation and Talent Committee, and an ESG Committee, each of which comprises a minimum of three directors selected by the Board upon recommendation of the ESG Committee. Each member of our Audit Committee, Compensation and Talent Committee, and ESG Committee, which includes all members of our Board other than our Chair and CEO, meets the independence standards as defined under the NYSE’s listing standards and SEC rules, as applicable. Additionally, each member of our Audit Committee qualifies as an “audit committee financial expert,” as defined by SEC rules. 

 

The Board receives regular updates from its committees on individual categories of risk, including strategy, financial/ operations, cybersecurity, people, technology, investment, legal/compliance, political/legislative/regulatory, and corporate responsibility and sustainability. Each of these committees operates pursuant to a written charter setting out the functions and responsibilities of the committee, which is reviewed annually, and may be viewed on our website at www.technipfmc.com under the heading “About us > ESG.”

 

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Audit Committee

2021 Meetings: 6
Current Members		Primary Responsibilities
Kay G. Priestly (Chair) Eleazar de Carvalho Filho Sophie Zurquiyah		►  Oversight of the financial management and control of the Company, as well as oversight of the Company’s independent registered public accounting firm
		►  Monitoring the Company’s financial reporting process
		►  Reviewing the Company’s consolidated financial statements and internal controls with management and the independent auditor
		►  Monitoring the Company’s compliance with its internal accounting and control policies, as well as legal and regulatory requirements to the extent such compliance relates to the consolidated financial statements and financial disclosures
		►  Selecting, subject to shareholder approval, the Company’s independent auditor, and reviewing the qualifications, independence, performance, and remuneration of such independent auditor
		►  Reviewing the effectiveness and performance of the Company’s internal audit function
		►  Considers risks relating to cybersecurity and receives regular reports on the Company’s cyber readiness, adversary assessment, risk profile status, and any countermeasures being undertaken or considered by the Company
		►  Reviewing the effectiveness of processes for reviewing and escalating financialrelated allegations reported through the Company’s allegation hotline
		►  Reviewing certain Company metrics on health, safety, and environmental matters

 

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Compensation and Talent Committee 

2021 Meetings: 5
Current Members		Primary Responsibilities
John O’Leary (Chair)1 Claire S. Farley John Yearwood		►  Reviewing, evaluating, and approving the agreements, plans, policies, and programs of the Company to compensate its independent directors, the Chair and CEO, and other officers
		►  Consistent with equity plans approved by the Company’s shareholders, reviewing, evaluating, and approving all equity awards by the Company to executive officers and approving the number of equity securities or equity derivatives that the CEO is authorized to allocate to all other employees at his discretion
		►  Reviewing the compensation disclosures in the Company’s U.K. annual report and proxy statement for the Company’s annual general meeting of shareholders
		►  Producing the Compensation and Talent Committee Report to be included in the Company’s proxy statement
		►  Reviewing, evaluating, and approving the directors’ remuneration policy and the directors’ remuneration report
		►  Reviewing and evaluating potential successors for executive officers and others in senior management
		►  Reviewing and evaluating global strategy on diversity and inclusion
		►  Otherwise discharging the Board’s responsibilities related to compensation of the Company’s executive officers and directors

 

(1)	Mr. O’Leary was appointed as Compensation and Talent Committee Chair effective May 20, 2021.

 

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ESG Committee

2021 Meetings: 4
Current Members		Primary Responsibilities
Peter Mellbye (Chair) Margareth Øvrum John Yearwood		►  Advising and making recommendations to the Board regarding corporate governance and ESG practices and initiatives and overseeing the Company’s progress in implementing its practices and programs
		►  Monitoring the development and implementation of the Company’s compliance program (including procedures for allegation reporting, investigation, and remediation) to ensure that the Company operates in compliance with the principles of ethical conduct and good governance
		►  Identifying individuals qualified to become Board members, consistent with the criteria approved by the Board, and recommending director nominees to the Board for election at the annual general meeting of shareholders or for appointment to fill vacancies on the Board
		►  Recommending directors to serve on each committee of the Board and recommending the Lead Independent Director
		►  Leading the Board in the annual performance evaluation of the Board and its committees

 

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Board Meetings and Attendance

Our Board met in person or by telephone conference six times in 2021.

 

 

* Post February 16, 2021.

 

From January 1, 2021, prior to the Spin-off on February 16, 2021, the Company held one Board meeting, which all directors attended except for Arnaud Caudoux, who excused himself. James Ringler attended all Board meetings in 2021 for which he was a director of the Company.

 

All remaining directors attended 100% of our Board meetings and 100% of their committee meetings in 2021.

 

We encourage our directors to attend the annual general meeting of shareholders. Due to the COVID-19 travel restrictions and precautions, none of our directors was able to attend our 2021 Annual Meeting.

 

Director Independence

 

Annual Review of Independence

The ESG Committee conducts an annual review of the independence of Board members and reports its findings to the full Board, which then makes a determination as to the independence of each director, as defined under the standards adopted by the NYSE. These standards specify certain relationships that are prohibited in order for a director to be deemed independent. In addition to these objective standards, our Board makes a subjective determination of independence by evaluating all relevant facts and circumstances. In particular, when assessing the materiality of a director’s relationship with the Company, the Board considers the issue not merely from the standpoint of the director, but also from the standpoint of persons or organizations with whom the director has an affiliation.

 

The Board has not adopted a policy that deems a director to be non-independent after a certain tenure on the Board as we believe our retirement policy and natural turnover will achieve the appropriate balance between long-term directors with deep institutional knowledge and new directors who bring fresh perspectives and diversity to our Board. Our Board reviews director tenure in connection with its director independence determinations. If all of our director nominees are elected at the Annual Meeting, the average tenure of our independent directors will be three years as the Board believes prior service on our legacy companies differed in breadth and scope from current service on our Board.

 

The Board’s independence determinations included a review of all 2021 commercial transactions, relationships, and arrangements between us and our subsidiaries, affiliates, and executive officers with entities associated with our directors or members of their immediate family. Such transactions, relationships, and arrangements are summarized below.

 

►	The Board considered that Mses. Farley, Øvrum, and Priestly, and Messrs. Mellbye, O’Leary, and, Yearwood, each served as directors or executive officers at companies that have had commercial business relationships with the Company in 2021, all of which were ordinary course commercial transactions.
►	Margareth Øvrum – Ms. Øvrum is a member of the Board of Directors of FMC Corporation, our former parent

 

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company. Our Company and FMC Corporation are parties to a separation and distribution agreement and a joint litigation defense agreement that relate to the separation of the companies’ businesses that occurred in 2001.

 

Independence Determination

In determining that none of the relationships noted above affected the independence of any of the interested directors, the ESG Committee considered the nature of the transactions, the dollar amounts involved, and the respective director’s role, if any, in the transaction.

 

Based on the report and recommendation of the ESG Committee, the Board has affirmatively determined that each of our non-executive directors is “independent” as defined under the NYSE listing standards. As such, following our Annual Meeting, eight of our nine directors will be non-executive, independent directors. In addition, the Board has affirmatively determined that all of the members of the Audit Committee and Compensation and Talent Committee satisfy the enhanced independence criteria required for such members under regulations adopted by the SEC and NYSE listing standards.