Letter from the Board of Directors
Dear Stakeholders:
The Board of Directors supports Synchrony management in accelerating growth and building a leading financial ecosystem that creates long-term value for shareholders — and all stakeholders. We do this by providing active oversight of the company’s strategic direction, business and management performance, and employee programs.
In 2022, Synchrony comprehensively delivered on its strategy. The company added, renewed or expanded more than 80 partner programs. Synchrony also launched and scaled key capabilities while continuing to execute its digital-first commitment by launching new consumer capabilities. The company also continued to invest in its people through compensation, benefits, wellness and other innovative programs. Synchrony also made important investments in diversity, equity and inclusion in how the company hires, trains and advances the careers of its employees, through our supplier process, and through investments in diverse companies as part of Synchrony Ventures.
The Oversight Process
As part of our annual strategic planning process, the Board conducted an intensive, multiday review of Synchrony’s short-, medium- and long-term strategic plans, considering economic, consumer, technology, healthcare, sustainability and other significant trends, as well as developments in the industry and regulatory initiatives.
The Board’s input was then incorporated into the strategic plan and approved. The output of these meetings provided the strategic context for the Board’s discussions at its meetings throughout the year, including regular updates and feedback on the company’s progress on the strategic plan. In addition, the Board regularly discussed and reviewed feedback on strategy from internal and external experts and advisors to ensure the strategy reflects the latest competitive landscape.
Strong risk management is at the core of our business strategy, so risk oversight is one of the Board’s highest priorities. The Board and the Risk Committee oversee the company’s enterprise-wide risk management program to ensure that all relevant risks, including credit risk, market risk, liquidity risk, operational risk (including cybersecurity and compliance), strategic risk and reputational risk are appropriately identified and controlled.
ESG: A Board-level Commitment
The Board also continued its oversight of human capital and other ESG priorities. Since Synchrony’s IPO in 2014, the company has believed that caring for the business, customers, partners, employees, communities and the environment creates sustainable, long-term shareholder value and reduces risk.
For this reason, all Board committees oversee matters that impact our ESG strategy and performance. ESG is a quarterly agenda item for the Nominating and Corporate Governance Committee (NCGC), including a joint meeting with the Management Development and Compensation Committee (MDCC), to focus on ESG; diversity, equity and inclusion (DEI); and community. The Audit and Risk Committees oversee compliance matters, and the Risk Committee oversees cybersecurity risks associated with information security and data privacy.
Culture Is Core to Business
Synchrony’s business performance, commitment to important social issues and identity as an enterprise derive from a single place: the company’s strong culture.
Differentiating Synchrony from other businesses, our culture enables the company to be flexible, agile and innovative. To exceed partner and customer expectations— while attracting and retaining the best employee talent. Synchrony’s employees are honest, passionate, caring, responsible, bold and driven — and we see them live those values every day in the business and human-capital decisions they make.
In 2022, the Board and management partnered to support culture with several initiatives, from ensuring pay equity and increasing diversity in our company to expanding financial education and investing in skills in the wider community. We also included culture, such as DEI goals, as a component in calculating the annual incentive plan offered to approximately 70% of salaried employees.
Our directors personally engaged with employees and external constituencies regarding our DEI strategic imperative throughout the year. For example, all directors are proud to have participated in various activities associated with the company’s annual Synchrony Diversity Experience, where employees engage in dynamic conversations on DEI issues and activities with Synchrony leadership, external speakers and colleagues from around the globe. We have also participated in multiple employee panel discussions throughout the year hosted by our Synchrony Diversity Networks.
In addition, we have represented Synchrony with a range of important external organizations, including OneTen, a coalition of leading companies that is committed to creating a more inclusive corporate America by hiring and promoting 1 million Black individuals into family-sustaining jobs over the next decade; the Latinx Executive Alliance, a coalition of business leaders dedicated to collectively helping Latinx employees advance in corporate America; the Synchrony Skills Academy, which hosts training programs in software engineering; the Black Corporate Directors Conference; and Women Corporate Directors events.
Managing Through a Successful Planned Transition
On April 1 of this year, the Board and its NCGC completed the successful transition of leadership from Margaret Keane, Executive Chair of the Board of Directors, to Jeffrey Naylor, who has served on Synchrony’s Board since 2014 and has been Synchrony’s Lead Independent Director since April 2021.
With this change, we return to having an independent director as the non-executive Chair of the Board, with a focus on the organization and effectiveness of the Board, while the CEO focuses on executing strategy and managing operations, performance and risks.
In addition, we managed the leadership transition of the NCGC from longtime Chair Olympia J. Snowe to new Chair Fernando Aguirre. Ms. Snowe retired from the Board in 2022.
A final note: During her career, Margaret Keane has embodied all the traits that make Synchrony a special company. The Board wishes her the best in her well-deserved retirement and thanks her for all she has done for Synchrony and its people, partners, shareholders and customers.
We are pleased with Synchrony’s strong financial performance in 2022 and the company’s approach to innovation and serving all stakeholders. We are confident in Synchrony’s long-term strategy and resilient, disciplined business model.
Jeffrey Naylor
Fernando Aguirre
Paget Alves
Kamila Chytil
Arthur Coiello Jr.
Brian Doubles
Roy Guthrie
Bill Parker
Laurel Richie
Ellen Zane