Allstate's Governance Structure

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Governance
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We bring out the good by cultivating exceptional corporate governance through our long-standing commitment to exemplary integrity and transparency.

Corporate Governance Structure

Board composition, effectiveness, diversity and accountability remain top priorities for Allstate. Allstate’s three cornerstones of corporate governance—dialogue, transparency and responsiveness—drive Allstate’s success and inform the actions of our board of directors, who are ultimately responsible for Allstate’s activities both in the near- and long-term. This report is a manifestation of these values.

Board Composition

Our board selects nominees based on their diverse skills and experiences and believes each director should be well-versed in certain core competencies including strategic oversight, stockholder advocacy, corporate governance and leadership. This diversity of experience and expertise facilitates robust and thoughtful decision-making on Allstate’s board. The board screens all potential candidates for conflicts of interest, and all directors are independent, except the CEO. The board believes that a mix of long- and short-tenured directors ensures an appropriate balance of views and insights and allows the board as a whole to benefit from the historical and institutional knowledge that longer-tenured directors possess and the fresh perspectives contributed by newer directors. At year-end 2016, Allstate’s board comprised 11 members, 6 of whom joined the board in the past five years. Click here to see our current board of directors.

Thomas J. Wilson serves as both the company’s board chair and CEO. Mr. Wilson has served as chair of Allstate since May 2008, and as CEO since January 2007. Judith A. Sprieser has served as our independent lead director since 2015. Among many responsibilities, the independent lead director serves as liaison between the chair and the independent directors, chairs executive sessions of the independent directors, shapes agendas and information provided to the board and presides at all board meetings at which the chair is not present. See page 21 of Allstate’s 2017 Proxy Statement for a complete list of the lead director’s duties.

Board Effectiveness

The primary role and responsibility of the board is to oversee the affairs of the company for the benefit of the stockholders. As the highest authority within the company, the board is responsible for selecting executive leadership who manage and operate Allstate effectively and responsibly. The board provides counsel and direction to executive leadership  and monitors their performance. The board’s responsibilities include, but are not limited to, oversight of the company’s strategy, business performance, compensation programs and shareholder advocacy. The board also regularly reviews the company’s significant risk exposures and how those exposures are managed. The board houses five sub-committees: audit, compensation and succession, nominating and governance, risk and return, and executive. For a more detailed description of the duties and responsibilities of each individual committee, please see pages 28-29 of Allstate’s 2017 Proxy Statement.

Diversity

The board believes that directors should act on behalf of all stockholders, should not represent the interests of particular constituents and should reflect a diversity of background, expertise and perspective arising from gender, age, experience, ethnicity, skill sets and viewpoints. As of year-end 2016, Allstate had five directors who brought gender or ethnic diversity to the board.

Accountability

With input from the lead director, the nominating and governance committee annually reviews, and recommends for approval by the board, the criteria and processes to be used to evaluate the performance of the board as a whole, and each sub-committee. The contributions and performance of each individual director are evaluated annually by the lead director, the chair and the chair of the nominating and governance committee. We utilize an ongoing board and committee self-evaluation process, including at the end of each regularly scheduled in-person meeting. Please see page 18 of the 2017 Proxy Statement for more information.

Executive Compensation

Executive compensation programs are designed with assistance from an independent consultant to be aligned with our strategy, key performance metrics and total shareholder returns. The executive compensation programs deliver pay in accordance with corporate, business unit and individual performance. A large percentage of total target compensation is at risk through long-term equity awards and annual cash incentive awards. These awards are linked to performance measures that correlate with long-term stockholder value creation. These programs have been consistently receiving high stockholder support, as reflected by the stockholder advisory vote with 95 percent support for each of the last three years.

Shareholder Engagement

Allstate has a proactive practice of discussing corporate governance issues with significant stockholders throughout the year. Such discussions are held before the annual meeting, during stockholder voting and after the annual meeting and include our lead director, chair of nominating and governance committee, chair of the board and other committee chairs or directors as necessary. Each board committee reviews relevant feedback and determines if additional discussion or actions are necessary by the respective committee or full board. During 2016, Allstate reached out to stockholders representing approximately 40 percent of outstanding shares.

Succession Planning

In 2016, Allstate expanded our management succession planning discussions to four times a year. The processes are designed to ensure sufficient in-house talent is available for all senior management positions by incorporating individual reviews, scenario planning, specific development plans and one-on-one meetings with more than 20 senior leaders and Board members.

Long-Term Strategy

Since the pace of economic change continues to accelerate, a diligent board must simultaneously focus on current performance and long-term strategy. As part of strategic planning, the board reviews Allstate’s relative competitive positioning and alternatives to maximize profitable growth. In 2016, the board focused on overseeing management’s operating performance, execution of the customer segmented go-to-market strategy and investment activities. The board also spent considerable time discussing the strategic options for taking advantage of a changing personal transportation system, and a new entity, Arity LLC, was launched to fully leverage and expand automotive telematics offerings. The board also approved the acquisition of SquareTrade, a protection plan provider for mobile devices, laptops, tablets, and other consumer electronics and appliances from malfunctions, accidental damage and life’s request mishaps.

For more information on Allstate’s corporate governance, visit our Investor Relations site.

Governance of Sustainability

Our commitment to transparency gives Allstate the opportunity to demonstrate our governance and management of the topics our internal and external stakeholders deem most material. Click here to learn more about our 2015 sustainability materiality assessment. Because of the assessment, Allstate is focused on four topics significant to both Allstate and our stakeholders—Community, Workforce & Diversity (Human Capital), Risk & Climate and Privacy & Information Security. In response, our report now focuses on these four topics with detailed information designed to answer the questions of all interested stakeholder groups.

While the board of directors is responsible for the oversight of the overall performance of Allstate, the following three bodies of leadership directly guide Allstate’s corporate responsibility and sustainability efforts:

Our CEO and Select Executive Leaders.
These individuals provide counsel, strategic oversight and direction to the groups below.
The Corporate Responsibility and Sustainability Team.
Residing in Allstate’s Corporate Relations department, the corporate responsibility and sustainability team—in partnership with The Allstate Foundation and corporate citizenship team—manages sustainability, environmental reporting, strategic philanthropy, corporate sponsorships and grants, employee engagement and company-wide volunteer service. They regularly report to our senior executives regarding sustainability trends and initiatives. In addition, the corporate responsibility and sustainability team briefs the board of directors on the status of Allstate’s corporate responsibility efforts.
The Allstate Sustainability Council.
Many topics that fall under corporate responsibility do not fall solely within the domain of the corporate responsibility and sustainability team. To this end, Allstate has maintained a sustainability council since 2007. Our corporate responsibility officer and other senior leaders meet up to three times a year to perform a comprehensive review of our corporate responsibility performance. This includes developing strategies for creating greater impact and identifying risks and opportunities related to environmental topics, such as climate change. The council, which meets quarterly, represents each of the following departments within Allstate:

  • Allstate Brand Operations
  • Accounting Services
  • Administration and Real Estate
  • Agency Operations
  • Allstate Technology and Strategic Ventures
  • Claims
  • Corporate Relations
  • Enterprise Risk and Return Management
  • Human Resources
  • Investments
  • Marketing
  • Product
  • Sourcing and Procurement

This cross-functional council reviews opportunities regarding operational efficiency, climate change and enterprise sustainability initiatives. Allstate’s senior vice president of corporate responsibility leads the council and updates senior executives on its activity annually.