1.1 Selection of Board Members. Each year at the Company’s annual meeting, the Board recommends a slate of Directors for election by shareholders. The Board’s recommendations are based on its determination (using advice and information supplied by the Nominating and Governance Committee) as to the suitability of each individual, and the slate as a whole, to serve as Directors of the Company, taking into account the membership criteria discussed below.
Shareholders may recommend Director nominees for consideration by the Nominating and Governance Committee by writing to the Company’s Secretary specifying the nominee’s name and the qualifications for Board membership. Following verification of the shareholder status of the person submitting the recommendation, all properly submitted recommendations are brought to the attention of the Nominating and Governance Committee. Shareholders may also nominate Directors for election at the Company’s annual meeting of shareholders by following the provisions described in the Company’s proxy statement.
1.2 Board Membership Criteria. The Nominating and Governance Committee works with the Board on an annual basis to determine the appropriate characteristics, skills, and experience for the Board as a whole and its individual members. In evaluating the suitability of individual Board members, the Board takes into account many factors, including relevant experience, intelligence, compatibility, reputation for integrity, professional background, understanding of the Company’s business, and any other factors deemed relevant. The Board evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of the business and represent shareholder interests through the exercise of sound judgment, using its diversity of experience. In determining whether to recommend a Director for re-election, the Nominating and Governance Committee also considers the Director’s past attendance at meetings and participation in and contributions to the activities of the Board.
1.3 Independence. The Board believes that a substantial majority of our Directors should be “independent,” not only as that term may be defined by the New York Stock Exchange, but also without the appearance of any conflict in serving as a Director. To be considered independent under these Guidelines, the Board must determine that a Director does not have any direct or indirect material relationship with the Company (other than in his or her capacity as a Director). We have established standards to assist in determining whether a Director has a direct or indirect material relationship. These independence standards are attached to these Guidelines.
1.4 Term Limits. The Board does not believe it should limit the number of terms for which an individual may serve as a Director. The Board believes that Directors who have served on the Board for an extended period of time are able to provide valuable insight into the operations and future of the Company based on their experience with and understanding of the Company’s history, policies, and objectives. The Board believes that, as an alternative to term limits, it can ensure that the Board continues to evolve and adopt new viewpoints through the evaluation and nomination process described in these guidelines.
1.5 Age Policy. It is the policy of the Board that no Director shall stand for election after the age of 75. A Director elected to the Board at or before the age of 75 may continue to serve until the expiration of the term during which he or she turns 76.
1.6 Directors with Significant Job Changes. When a Director’s principal occupation or business association changes substantially during his or her tenure as a Director, that Director should offer to tender his or her resignation for consideration by the Nominating and Governance Committee (and, if requested by the Nominating and Governance Committee, tender his or her resignation). The Nominating and Governance Committee will recommend to the Board the action, if any, to be taken with respect to the offer or the resignation.
1.7 Limitation on Other Board Service. Directors are expected to advise the Chairman of the Board and the Chairman of the Nominating and Governance Committee before accepting any other public company directorship or any assignment to the audit committee or compensation committee of the board of directors of any public company of which such Director is a member. Directors may not serve on more than four boards of public companies, including the Company’s Board.
1.8 Conflicts of Interest. All Directors must comply with the applicable provisions of the Company’s Code of Ethical Business Conduct. If a Director has a personal interest in any matter that is being considered by the Board for approval, that Director must disclose the interest to the Board, excuse himself or herself from participation in the discussion (as directed by the Board), and not vote on the matter.
1.9 Chairman of the Board. The independent Directors shall annually designate a Chairman of the Board from among the independent Directors of the Board. Although designated annually, the Chairman of the Board is generally expected to serve for more than one year.
The Chairman of the Board’s key role is to work with the Chief Executive Officer to ensure that the Board (i) discharges its responsibilities, (ii) has structures and procedures in place to enable it to function independently of management, and (iii) clearly understands the respective roles and responsibilities of the Board and Management. The Chairman of the Board will perform the following duties:
- Convene and chair all meetings of the shareholders and the Board of Directors.
- Convene and chair regular executive session meetings of the non-management Directors and, as appropriate, provide prompt feedback to the Chief Executive Officer.
- Coordinate and develop the agenda for executive sessions of the independent Directors.
- Convene meetings of the independent Directors if necessary.
- Coordinate feedback to the Chief Executive Officer on behalf of independent Directors regarding business issues and management.
- Coordinate appropriate charters, tasks and responsibilities of the Board’s committees with the chairs of those committees, and ensure delegated committee functions are carried out and reported to the Board.
- Work with the Chairman of the Nominating and Governance Committee with respect to the recruitment, selection and orientation of new Board members, the evaluation of the Board and committee composition.
- Oversee the Compensation and Management Development Committee’s development of appropriate performance and professional development objectives for the CEO, monitor and provide ongoing feedback to the CEO regarding performance against those objectives, coordinate and chair the annual Board performance review of the CEO and communicate results of that performance review to the CEO.
- Lead the Board’s review of the succession plan for the CEO and other key senior executives.
- Perform such other duties as may be necessary for the Board to fulfill its responsibilities or as may be requested by the Board as a whole or by the non- management Directors.
- Be the designated spokesperson for the Board when it is appropriate for the Board to comment publicly on any matter.
- Be available for consultation and direct communication if requested by the Company’s major shareholders.
The Board recognizes that no single leadership model is right for all companies at all times, and as appropriate, the Board will continue to review its leadership model to determine the correct leadership structure for the Company.