When the pandemic hit at the end of the first quarter 2020, the Board and management took immediate action:
- Reviewed weekly comprehensive risk management dashboard on topics including employee safety, wellbeing and productivity; credit and operational metrics; technology and information systems; and financial performance.
- Engaged frequently with management, shifting to virtual meetings to perform key oversight functions and take action. For example:
- The Risk Committee monitored cybersecurity risks of remote work.
- The Management Development & Compensation Committee actively worked with an independent consultant to study the impact of the pandemic on executive incentives and compensation programs and worked to implement a fair and appropriate realignment.
- The Technology Committee partnered with management to ensure employees had the technology and tools needed to continue serving our partners and consumers while innovating in a work-from-home setting.
Looking to the future, the Board and management assessed strategic risks and opportunities to position Synchrony for success in the post-COVID-19 world. As part of this effort, we oversaw and supported management’s adoption of eight new strategic business priorities. This includes shifting resources to focus on accelerating digital capabilities in response to the pandemic, such as digital collections; or our efforts to enable consumers to apply for credit in store or pay merchants via contactless solutions, a trend we believe is not only important in a pandemic but will endure long after. The team also shifted resources to ramp up commercial strategies, pricing, deal pipeline reassessment and reprioritization of marketing and growth initiatives. Examples of success include new program launches with Venmo and Verizon, renewals with Sam’s Club and Mattress Firm, and our continued expansion in health systems through CareCredit partnerships with AdventHealth, Community Veterinary Partners, Cox Health, Cleveland Clinic, Kaiser Permanente, Lehigh Valley Health Network, St. Luke’s University Health Network and others.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
Woven throughout the business is a deep concern for environmental, social and governance matters. Notably, several of Synchrony’s initiatives explore how we work together—and come together—as a team.
- Brian Doubles led the 2020 strategic priority devoted to Diversity and Inclusion.
- We had regular updates from management on progress in the company’s D&I efforts, including new initiatives launched in 2020 such as Advancing Diverse Talent, which uses data analytics to identify opportunities as they relate to our workforce demographics, shaping our strategies around hiring, developing and advancing underrepresented talent.
- As part of the Board’s Management Development and Compensation Committee’s annual review of compensation practices, we reviewed our annual pay equity process that the company completes through a third party. We confirmed Synchrony’s continued approach to driving more equitable pay practices across gender and race, considering key factors such as job level, function, experience and historical performance.
- The Board was provided an overview of Synchrony’s annual talent review and succession planning process, including reviews of—and Board exposure to—a diverse slate of future leaders.
- The Board and management elevated attention to social injustice and racial equality:
- Fernando Aguirre led an all-employee event on the role diversity plays in business and the steps Synchrony is taking to ensure diverse talent is represented at all levels of the organization.
- Synchrony held an all-employee town hall with Paget Alves and Laurel Richie where employees had the opportunity to engage directly on diversity and inclusion in the workplace.
- Directors participated in our annual two-day Diversity Experience, attended by 2,500 employees virtually.
- Fernando Aguirre and Margaret Keane discussed board diversity at the Women Corporate Directors 2020 Americas Institute conference.
- Paget Alves and Margaret Keane co-authored an op-ed in Fortune about the need for companies to lead on diversity and inclusion matters during this time.
We are proud Synchrony was named one of the top 20 companies on the 2021 Forbes JUST 100, which showcases companies that are the nation’s top corporate citizens, including with respect to D&I. We are also proud our Board is a role model as one of the most diverse boards in the Fortune 200, with a woman as our Executive Chair.Our 12 members include four women, four minorities and one veteran.>
SUCCESSION PLANNING AND CHANGES IN BOARD STRUCTURE
CEO transition is one of the most important functions of any board of directors. In the period leading up to Synchrony’s CEO transition, the Board and its Nominating & Corporate Governance Committee thoroughly evaluated the company’s leadership structure, considering the perspectives of the independent directors and significant stockholders, and evaluating benchmarking and performance data.
The transition to Brian Doubles as President and CEO, Margaret Keane as Executive Chair, and Jeffrey Naylor as Lead Independent Director is the culmination of a strategic succession plan overseen by the Board. It reinforces the strength of the leadership bench Margaret has built and the strong governance we take so seriously.
We determined the roles of Chair and CEO would continue to be separate. This leadership structure is in the best interests of stockholders at this time because it allows the Chair to focus on the organization and effectiveness of the Board, while the CEO executes Synchrony’s strategy and manages its operations, performance and risk. Our former CEO, serving as Executive Chair, will provide unified leadership and continuity; and the lead independent director will hold management accountable for our continued success.
We thank and congratulate Rick Hartnack, who has reached our Director retirement age of 75. As our founding Chair of the Board of Directors in 2014, he has brought exceptional leadership and made so many contributions to our company.
We welcome Brian as President and CEO and member of the Board of Directors. We believe the timing for this transition is right and he will lead Synchrony to a bright future.
Finally, we are confident in Synchrony’s ability to help our partners grow and to serve our customers with excellence. Thank you for your continued support and trust.
WE THANK YOU FOR YOUR CONTINUED SUPPORT AND TRUST.
ARTHUR COVIELLO, JR.