Corporate Governance & Business Ethics

Corporate Governance

We maintain strong governance practices that support our strategic direction, inclusive and diverse workplace and strong ethical reputation. For us, effective corporate governance means:

  • Having a high quality, diverse Board of Directors who reflect our customers;
  • Implementing policies and procedures that promote governance quality, operating in stakeholders’ best interest and engaging stakeholders;
  • Promoting the integrity of governing bodies, such as independence of the Board Chair;
  • Helping ensure clear lines of accountability for material environmental and social topics, including Board engagement on sustainability topics; and
  • Demonstrating transparency and accountability to stakeholders though public disclosures.


Governance Structure


Our corporate governance structure helps provide accountability and integrity across the organization. Our Board of Directors has the following standing committees:

  • Audit, Finance and Risk
  • Executive Development and Compensation
  • Nominating/Corporate Governance
  • Safety, Environmental, Technology & Operations1

Each standing committee operates under a written charter, reviewed annually and approved by the Board of Directors. They are available in the Downloads section.

1Includes cybersecurity governance


Board Diversity

405-1, EEI 7.2, EEI 7.2.1, EEI 7.2.2

The diversity of our Board of Directors reflects our belief that our directors should bring a variety of experience, knowledge, abilities and backgrounds to our company. Having this variety at the highest levels of our organization helps our company better align our long-term strategy with the needs of the diverse communities we serve. We have a longstanding commitment to gender diversity and equality at both the Board level and throughout our company. Our continued inclusion on the Bloomberg Gender-Equality Index and commitment to Paradigm for Parity demonstrates this commitment in action. Our Board of Directors represents gender, racial and experiential diversity. As of March 2021, five of 11 directors (45.5%) voluntarily self-identify as female; two of 11 directors (18.2%) voluntarily self-identify as racially diverse; and two (18.2%) are military veterans. Additionally, as of March 2021, American Water’s Board is 54.5% racially and gender diverse, and with the inclusion of military veteran status, the Board’s overall diversity is 72.7%.

Women comprise 54.5% of American Water’s Board of Directors.


ESG Governance


We regularly discuss American Water’s ESG strategy and performance with our Board. Our Nominating/Corporate Governance Committee takes a leadership role in shaping our corporate governance, while our Safety, Environmental, Technology and Operations Committee oversees and reviews our operations across a number of areas including employee and public safety, environmental policies and practices, technology policy, strategy and governance and operational performance and risks. The Safety, Environmental, Technology and Operations Committee assists the Board in the oversight and review of:

  • Employee and public safety;
  • Environmental policies and practices, including without limitation, water quality and emerging contaminants;
  • Technology policy, strategy, and governance, including physical and cybersecurity matters related to the company’s operations; and
  • Certain operational performance and risk matters. 

In addition to the Safety, Environmental, Technology and Operations Committee, the Executive Development and Compensation Committee of the Board oversees social matters including inclusion and diversity, including topics such as pay equity.

To demonstrate our commitment to ESG governance and transparency, we report through the GRI, SASB and EEI frameworks. In addition, we reference the TCFD recommendations, providing information and data related to our approach to managing climate risk across the enterprise. We also take into consideration the UNSDGs, and we submit responses to the S&P Global Corporate Sustainability Assessment (CSA) and CDP Climate Change annually. To better understand and communicate our climate related risks and opportunities to stakeholders, we respond to the CDP Climate Change questionnaire annually. Additionally, we have voluntarily aligned with National Institute of Standards and Technology (NIST) standards since 2014, demonstrating our commitment to protecting critical infrastructure. 

Business Ethics

102-16, 102-17, 403-7

At American Water, the way we execute our strategies is just as important as achieving our goals. Our Code of Ethics, most recently updated in 2020, forms the basis of American Water’s culture of integrity. All employees are responsible for knowing and complying with the policies, practices and laws that apply to the work they do and the decisions they make. Our Code of Ethics also serves as a guide to ethical decision-making at American Water, and it addresses the following areas: 

  • Avoiding conflicts of interest; 
  • Anti-trust and fair competition;
  • Anti-corruption and anti-bribery;
  • Handling sensitive information and intellectual property;
  • Use of company assets;
  • Maintaining accurate financial and business records;
  • Government relations;
  • Equal employment opportunity;
  • Respect and dignity in the workplace;
  • Preventing discrimination, harassment and bullying;
  • American Water’s policy against retaliation;
  • Health and safety; and
  • Environmental leadership.

Compliance with our Code of Ethics is a condition of employment at American Water. All employees, temporary employees and Board of Directors must read and understand our Code. Everyone is responsible for reporting actual or suspected violations of our Code, company policies or law.

To report potential violations, American Water has an independent, secure and confidential Ethics Helpline that is available to employees and external stakeholders, including suppliers and customers. The Ethics Helpline is available 24 hours a day, 7 days a week by phone or internet.

If employees have questions about whether behavior or a situation they face is consistent with our Code, they are encouraged to seek guidance or raise concerns by contacting:  

  • Their manager;
  • Skip level manager;
  • Local Human Resources (HR) Business Partner;
  • Compliance and Ethics Department;
  • Legal Department;
  • Security; and/or
  • The Ethics Helpline.