Board Oversight of ESG Matters

Our Board and each of its committees oversee matters related to Regions’ ESG practices, performance and disclosures. The Board and its standing committees receive regular updates on ESG progress, including stakeholder feedback, programmatic updates and ratings assessed by various ESG data providers. The Board, as overseers of risk and stewards of long-term enterprise value, play an important oversight role in assessing our environmental and social risk management practices and understanding the potential impact of ESG issues on the Company’s operations and business.

The Board and its committees also oversee the Company’s ongoing efforts to provide our stakeholders with comparable and decision-useful ESG and sustainability disclosures that align with our strategic focus on Continuous Improvement. For example, Regions was one of the first U.S. regional banks to release disclosure using the SASB standards. Regions’ disclosure incorporates elements of the SASB industry-specific standards for Commercial Banks, Consumer Finance and Mortgage Finance, each of which the Company has identified as being highly relevant to its operations and business. Our SASB disclosure, CDP Climate Change disclosure and Environmental Sustainability Policy Statement and Goals are published on our website at ir.regions.com/governance.

Although the Company has made considerable progress on its ESG disclosures over the last few years, we recognize that Regions benefits from continuously improving its ESG performance and reporting efforts. To that end, and acknowledging the societal need to confront climate change, plans are underway at Regions to complete a stand-alone, climate-related risk disclosure that is aligned with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) framework. The Board believes that responsible and responsive corporate governance practices enable companies to generate consistent, sustainable, long-term performance and that enhanced disclosures provide our shareholders with a more transparent look at the Company.

Regions Board of directors oversight of esg matters

Nominating and Corporate Governance COMMITTEE

The NCG Committee is responsible for overseeing the Company’s practices and reporting with respect to environmental topics, such as climate change, and corporate social responsibilities that are of significance to the Company and its stakeholders — our customers, shareholders, associates and communities. The NCG Committee also assists the Board in establishing and maintaining effective corporate governance policies and practices.

Compensation and Human Resources COMMITTEE

The CHR Committee oversees Regions’ strategies and policies regarding corporate culture and other HCM functions, including associate conduct, engagement and career progression; diversity and inclusion initiatives and results; talent acquisition, development and retention; performance management; and employment practices.

Risk COMMITTEE

The Risk Committee is responsible for the oversight of the Company’s risk management practices, including the review and approval of the Risk Management Framework, the Enterprise Risk Appetite Statement and significant risk management policies and limits that guide the prudent pursuit of risk and reward across the Company. This includes environmental and social risk management topics, such as climate change.

Audit COMMITTEE

The Audit Committee is responsible for ensuring that the Company’s policies, procedures and controls that protect our customers and associates are functioning at an optimal level. The Audit Committee also oversees the disclosures of matters significant to our Company, including ESG-related matters, through our financial statements and reports.

Our Board also receives educational presentations and information frequently. For example, to further broaden its own understanding of ESG topics, the Board participated in an educational seminar led by Ceres on the role of boards in overseeing ESG matters. Our Board and committees also regularly discuss ESG topics with our management and subject-matter experts. Examples of ESG topics discussed with and reported to the Board and its committees in 2019 include:

The development of Regions’ Human Rights Statement and Vendor Code of Conduct
The Environmental Sustainability Policy Statement and related environmental goals, as well as associated energy efficiency programs
Human capital management matters
Environmental and social risk management practices, including how environmental and social risks are managed in the Regions Risk Framework
Effectiveness of Regions’ Code of Conduct and related ethics programs
Information technology, cyber and information security, business resilience and privacy
Political contributions
Regions’ initial SASB disclosure, as well as ongoing monitoring of ESG reporting, scores and rankings

Beginning in 2018, the Board expanded the scope of our CHR Committee beyond its traditional role to include oversight of all HCM efforts within the Company. Since its charter’s expansion, the CHR Committee has strategically conducted reviews of talent management, succession planning, associate conduct, associate learning and development, diversity and inclusion and associate retention. Notably, in 2019, the CHR Committee further strengthened its oversight of associate-related areas through the implementation of an HCM Dashboard that it reviews periodically throughout the year. The HCM Dashboard includes a mixture of trending and point-in-time metrics designed to provide information and analysis including, but not limited to, the following:

Workforce composition (diversity and inclusion, etc.)
Workforce stability (retention, turnover, etc.)
Associate engagement
Learning and development
Compensation
Benefit and wellness program utilization

Through monitoring, subject-matter reviews, and discussions with management, the CHR Committee ensures that the effectiveness and continuous improvement of our HCM strategies and policies align with our corporate culture and long-term strategic priorities.

2019 Board and Committee ESG Presentations

Environmental (E)

Environmental Sustainability Policy Statement and related environmental goals
Energy efficiency programs
Environmental and social risk management practices
Regions’ first SASB disclosure
ESG reporting, scores and rankings

Social (S)

Regions’ Human Rights Statement
Regions’ Vendor Code of Conduct
Human capital management matters
Effectiveness of Regions’ Code of Conduct

Governance (G)

Regions’ Code of Conduct and related ethics programs
Information technology, information security, business resilience and privacy
Political contributions
ESG reporting

Director-Associate Engagement

The Board and management set a “tone at the top” that is characterized by, among other hallmarks, open and transparent communications across all levels of the Company. Throughout the year, Directors interact with associates in a variety of ways, and the Company regularly provides specific opportunities for Director-associate engagement. For example, associates will regularly attend and present at Board and committee meetings to provide subject-matter expertise and additional insights into items being discussed. In addition to the Board and committee meetings, small group meetings or one-on-ones are arranged with associates without executive management present to discuss topics of interest to Directors. Associates also regularly attend the Board dinners and breakfast breakout sessions that typically coincide with quarterly on-site Board and committee meetings.

Throughout their tenure, Directors also are encouraged to visit various Regions facilities, including the Regions Operations Center, and to meet with associates. This provides Directors the opportunity to observe the customer experience in action, as well as operational processes and, most importantly, to interact directly with our associates. Each October, the quarterly in-person Board and committee meetings are typically held in a different city throughout the Regions footprint, together with customer events. These off-site meetings and events provide the Directors with another opportunity to interact directly with associates, as well as customers within our footprint. In addition to these arranged interactions, all Board members have full and free access to contact and meet with any Regions associate.

Finally, the independent Chair of the Board sends an annual memo to the Executive Leadership Team reminding them that they may speak directly and confidentially to the Board regarding any substantial concerns that are irresolvable among management.

Regions hopes to continue this level of in-person contact throughout 2020, but, in light of the COVID-19 pandemic, we will continue to assess what is most protective of the health and safety of our Directors and associates.

ESG Data Governance

Regions recognizes that governing our ESG data collection and reporting processes so as to promote accuracy is critical to maintaining the trust between Regions and our shareholders and other stakeholders. Through accurate collection of year-over-year data, we are better able to track progress against both formal and informal goals and identify emerging trends.

To further enhance the quality and accuracy of our ESG disclosures, we follow rigorous internal control processes, and apply our “lines of defense” approach for our proxy statement and this report, the two documents that rely most on our ESG data. For more discussion on our “three lines of defense” approach, please see pages 35-36. This internal control process includes contributions and certifications provided by Regions’ internal subject-matter experts, who are the first line of defense; multiple rounds of drafting and revisions by individuals who form a second line of defense to better ensure clarity of disclosures; and additional reviews by our internal Disclosure Review Committee, which is tasked with reviewing certain of Regions’ regulatory and nonregulatory disclosures for accuracy and clarity. Members from our Internal Audit group, a third line of defense, also participate in certain portions of this process.