Social Responsibility
Governance

At Tesoro, we are committed to integrity, ethical behavior and transparency and adhere to the highest ethical standards and corporate governance practices to safeguard the company and its stakeholders.

Tesoro has a long history of developing and maintaining proactive, voluntary programs to help ensure and promote ethical and responsible business practices within our company. Years before the implementation of the corporate governance requirements of the Sarbanes-Oxley Act of 2002, Tesoro had already implemented several corporate governance guidelines and practices to ensure accountability.

Specifically, Tesoro established Audit, Compensation and Governance Committees consisting entirely of independent directors. A majority of the members of Tesoro’s Board of Directors are independent. In 2002 we established the Finance Committee and in 2004, we established the Environment, Health and Safety Committee. We also established a Lead Director to preside over meetings of the independent directors, and have implemented a single class of directors elected annually. In April, 2004, Tesoro increased the size of the board from six to seven members. We believe this addition will further strengthen our board and its corporate governance.

Consistent with its responsibilities as a corporate citizen, Tesoro has taken steps to meet or exceed all applicable rules and regulations of the New York Stock Exchange and the Securities and Exchange Commission.

Top Corporate Governance Quotient

In addition, Tesoro is honored to have been recognized for its high standards and corporate governance practices by the Institutional Shareholder Services, Inc. This independent research firm announced in 2004 that Tesoro ranked first in the Corporate Governance Quotient among all Russell 3,000 Index companies and companies in the energy group.

The quotient is a rating system to help institutional investors evaluate the quality of a board of directors and the impact governance practices have on a company’s performance. A company’s ratings are calculated based on its board of directors, audit, charter and bylaw provisions, anti-takeover provisions, executive and director compensation, progressive practices, ownership and director education.