Customer Events & Executive Expenses

  • In May, 2015, Reuters published a story written to sensationalize and personalize matters Dow identified, resolved and publically disclosed long ago.
  • In 2011, Dow disclosed an expense matter that was discovered during a routine internal audit that was part of the Company’s standard process, leading to a full internal and external investigation.
  • The audit of the Events Department found shortcomings in record-keeping and processing, as well as a failure of current policies and procedures to provide sufficient guidance to avoid confusion and/or misapplication of those policies and procedures.
  • In connection with those findings, it was determined that certain expenditures incurred on behalf of Mr. Andrew Liveris during the period 2007-2010 were not primarily business-related or should have been processed by the Events Department as personal expenses and were not billed to Mr. Liveris by the Events Department when incurred. 
  • The Corporate Auditing Department presented the results of the audit to Mr. Liveris who reimbursed the Company for its expenditures in the amount of $719,923.
  • The Corporate Auditing Department also reviewed, and the Company approved revised and enhanced policies and procedures for the Events Department designed to address the issues identified in the audit including the failure of the Events Department to process and request reimbursement for applicable expenditures in a timely manner.
  • This was thoroughly and publicly disclosed in Dow’s 2011 proxy filing.
  • Dow has a rigorous review process in place centered on internal investigations that ensure that credible allegations are thoroughly investigated and this process involves independent oversight.
  • Procedures and policies around expenses, including those of the executive leadership team, are consistently reviewed by the Audit Committee of the Board of Directors to ensure they are in full compliance with all regulatory requirements.
  • The bottom line is that this situation is about compliance processes that worked well with the involvement of independent oversight.
  • The Audit Committee of the Board of Directors is responsible for overseeing Dow’s internal audit function and exercised its oversight role in a diligent and responsible manner – including retaining external legal and accounting advisors to provide a complete review of the determinations of the Company’s internal auditing department with respect to how the review was conducted and the amount of reimbursement determined.
  • As a result of these activities, improvements to Dow’s internal process were implemented and institutionalized.
  • Since 2011, Dow’s Audit Committee has overseen an annual review of the Events Department processes with each audit determining that the Events Department is in compliance with no issues identified.
  • In summary, the matters reported by Reuters are not new. The news agency has recycled old issues that the Company made public long ago and addressed through independent review, enhanced audits, and improved controls. These matters were disclosed in 2011 by the filing of a publicly available proxy statement with the SEC.
  • Information about Dow’s corporate governance and Board of Directors can be found in the Company’s 2015 Proxy and www.DowGovernance.com.