Corporate Governance Guidelines
The following corporate governance guidelines of the Board of Directors of the Company, have been approved by the Board of Directors and provide the framework for the corporate governance of the Company.
Role of the Board of Directors
The Company’s business is managed under the direction of the Board of Directors. The Board delegates to the Chief Executive Officer, and through that individual to other senior management, the authority and responsibility for managing the Company’s business. The Board’s role is to oversee the management and governance of the Company and to monitor senior management’s performance.
Among the Board’s core responsibilities are to:
- Select individuals for Board membership and evaluate the performance of the Board, Board committees and individual directors.
- Select, monitor, evaluate and compensate senior management.
- Assure that management succession planning is adequate.
- Review and approve significant corporate actions.
- Review and monitor implementation of management’s strategic plans.
- Review and approve the Company’s annual operating plans and budgets.
- Monitor corporate performance and evaluate results compared to the strategic plans and other long-range goals.
- Review the Company’s financial controls and reporting systems.
- Review and approve the Company’s financial statements and financial reporting.
- Review the Company’s ethical standards and legal compliance programs and procedures.
- Oversee the Company’s management of enterprise risk.
- Monitor relations with shareholders, employees, and the communities in which the Company operates.
Board Size and Composition
The Board of Directors is comprised of such number of directors as the Board deems appropriate to function efficiently as a body, subject to the Company’s Articles of Association. The Sustainability, Corporate Governance and Nominating Committee reviews the composition of the full Board to identify the qualifications and areas of expertise needed to further enhance the composition of the Board, makes recommendations to the Board concerning the appropriate size and needs of the Board and, on its own or with the assistance of management or others, identifies candidates with those qualifications.
The Board is made up of a substantial majority of independent, non-employee directors and the Board considers this to be the appropriate structure. The Board establishes principles and procedures to determine whether or not any particular director is independent in accordance with applicable regulations and the requirements of the New York Stock Exchange. The standards currently in effect for determining the independence of individual directors are attached as Exhibit I to these Corporate Governance Guidelines.
Selection of Directors
Under the Articles of Association, the Board of Directors has authority to fill vacancies in the Board and appoint additional directors (in each case subject to their re-election at the next annual general meeting) and to nominate candidates for election by the shareholders. The screening process is done by the Sustainability, Corporate Governance and Nominating Committee with direct input from the Chair and CEO and from the other directors and from time to time with the assistance of director search firms. In considering candidates for director, the Sustainability, Corporate Governance and Nominating Committee will take into account all factors it considers appropriate, including, among other things, breadth of experience, understanding of business and financial issues, ability to exercise sound judgment, diversity, leadership, and achievements and experience in matters affecting business and industry. The Sustainability, Corporate Governance and Nominating Committee considers the entirety of each candidate’s credentials and believes that at a minimum each nominee should satisfy the following criteria: highest character and integrity, experience and understanding of strategy and policy-setting, sufficient time to devote to Board matters, and no conflict of interest that would interfere with performance as a director. Shareholders may recommend candidates for Board membership for consideration by the Sustainability, Corporate Governance and Nominating Committee. Such recommendations should be sent to the Committee, care of the Secretary of the Company. Candidates recommended by shareholders are evaluated in the same manner as director candidates identified by any other means.
Chair of the Board and CEO
The positions of Chair of the Board and CEO are held by the same person, except in unusual circumstances, such as during a CEO transition. This policy has worked well for the Company. It is the Board’s view that the Company’s corporate governance principles, the quality, stature and substantive business knowledge of the members of the Board of Directors, as well as the Board’s culture of open communication with the CEO and senior management are conducive to Board effectiveness with a combined Chair of the Board and CEO position.
Lead Independent Director
It is the policy of the Board that a Lead Independent Director be appointed for a three-year minimum term from among the Company’s independent directors. The Lead Independent Director shall have the roles and responsibilities set forth in Exhibit II to these Corporate Governance Guidelines.
Committees of the Board
The Board of Directors has the following committees: Audit, Human Resources and Compensation, Sustainability, Corporate Governance and Nominating, Finance, Technology and Innovation and Executive. All committees have written, Board-approved charters detailing their responsibilities and the extent to which they have been delegated powers of the Board of Directors. Only non-employee directors serve on the Audit, Human Resources and Compensation, Sustainability, Corporate Governance and Nominating, Finance and Technology and Innovation Committees. Chairpersons and members of these five committees are rotated periodically, as appropriate. The Executive Chair serves on the Company’s Executive Committee and is Chairperson of such Committee. The CEO also serves on the Company’s Executive Committee. The remainder of the Executive Committee is comprised of the non-employee director Chairpersons of the Audit, Human Resources and Compensation, Sustainability, Corporate Governance and Nominating and Finance Committees. At each meeting of the Audit Committee, committee members meet privately with representatives of the Company’s independent auditors, and with the Company vice president responsible for the internal audit function. At least once a year, the Audit Committee meets privately with the Company’s chief compliance officer.
The Audit Committee meets at least five times each year, the Human Resources and Compensation, Sustainability, Corporate Governance and Nominating and Finance Committees each meet at least four times each year, and the Technology and Innovation Committee meets at least once a year. The Executive Committee meets on an as needed basis when directed by the Chair and CEO or Lead Independent Director. Additional committee meetings are called as required.
Board Agenda and Meetings
The Chair establishes the agendas for the Board meetings in conjunction with the Lead Independent Director. Each director is free to suggest items for inclusion in the agenda, and each director is free to raise at any Board meeting subjects that are not on the agenda for that meeting. Board materials relating to agenda items are provided to Board members in advance of meetings to allow the directors to prepare for discussion of matters at the meeting. The Board reviews and approves the Company’s yearly operating plan and specific financial goals at the start of each year, and the Board monitors performance throughout the year. At an expanded Board meeting once a year, the Board reviews in depth the Company’s long-range strategic plan. At the expanded meeting, it also reviews senior management development and succession planning.
Management presentations are made to the Board and its committees regularly on various aspects of the Company’s operations. The directors have unrestricted access to management and corporate staff.
Executive Sessions of Non-employee Directors
The non-employee directors meet privately in executive sessions to review the performance of the CEO and to review recommendations of the Human Resources and Compensation Committee concerning compensation for the employee directors. The non-employee directors also meet as necessary, but at least twice a year, in executive session to consider such matters as they deem appropriate without management being present.
Director Orientation and Continuing Education
In order to become familiar with the Company, as well as the functioning of the Board of Directors, newly-appointed directors receive a variety of materials, including a Directors’ Handbook, which provide an overview of the Company, its operations and organization. They are also provided with access to key management personnel to provide additional information, including significant issues currently facing the Company. Management will also maintain a program to keep directors up to date on legal, regulatory and other matters relevant to their positions as directors of a large publicly-held corporation.
Director Compensation and Stock Ownership
The Sustainability, Corporate Governance and Nominating Committee periodically reviews the Board of Directors’ compensation and benefits and compares them with director compensation and benefits at peer companies. It is the Board of Directors’ policy that directors be required to acquire shares of Company stock worth five times the annual cash retainer. A director cannot sell any shares of Company stock until he or she attains such level of ownership and any sale thereafter cannot reduce the total number of holdings below the required share ownership level. Directors are required to retain this minimum level of Company stock ownership until their resignation or retirement from the Board. It is also the policy of the Board that directors’ fees be the sole compensation received from the Company by any non-employee director.
CEO Performance Evaluation
At the beginning of each year, the CEO presents his or her performance objectives for the upcoming year to the non-employee directors for their approval. At the end of the year, the non-employee directors then meet privately to discuss the CEO’s performance for the current year against his or her performance objectives. The non-employee directors use this performance evaluation in the course of their deliberations when considering the compensation of the CEO. The non-employee directors and the CEO then meet to review the CEO’s performance evaluation and compensation.
Chief Executive Officer Succession
The Board of Directors views CEO selection as one of its most important responsibilities. To assist the Board in succession planning, the CEO reports at least annually to the Board providing an assessment of senior managers and their potential to succeed the CEO, either in the event of a sudden emergency or in anticipation of the CEO’s future retirement.
Each non-employee director must retire at the annual general meeting immediately following his or her 75th birthday, unless the policy is waived by the Board. Directors who change the occupation they held when initially elected must offer to resign from the Board. At that time, the Sustainability, Corporate Governance and Nominating Committee reviews the continued appropriateness of Board membership under the new circumstances and makes a recommendation to the Board. Employee directors, including the CEO, must retire from the Board at the time of a change in their status as an officer of the Company, unless the policy is waived by the Board.
Board and Board Committee Performance Evaluation
With the goal of increasing the effectiveness of the Board of Directors and its relationship to management, the Sustainability, Corporate Governance and Nominating Committee assists the Board in evaluating its performance as a whole and the performance of its committees. Each Board committee is also responsible for conducting an annual evaluation of its performance. The effectiveness and contributions of individual directors are considered each year when the directors stand for renomination.
The CEO and other members of senior management must seek the approval of the Board (or the Board committee to which this responsibility has been delegated), before accepting outside board memberships with for-profit entities.
Non-employee directors must advise the Chair and the Chair of the Sustainability, Corporate Governance and Nominating Committee if they are being considered for election or appointment to a board of directors of another publicly-held company. The Sustainability, Corporate Governance and Nominating Committee will determine whether the new board membership is compatible with continued service on the Company’s Board. It is the policy of the Board that non-executive directors may not serve on the board of more than four other publicly held companies without the prior approval of the Board of Directors, except that any new board members shall be given a reasonable transition period to come into compliance with the policy.
The Board or a committee of the Board may seek legal or other expert advice from a source independent of management. Generally, this would be with the knowledge of the CEO.
Code of Conduct
The Company will maintain a code of business conduct and ethics which will articulate for employees, shareholders, customers and suppliers the standards of conduct, including conflicts of interest matters, to which the Company expects to adhere. Directors will also be required to abide by the code of conduct. Any waivers of the conflict of interest requirements of such code in favor of a director or executive officer will be subject to approval by the Board. In the case of the consideration of such a waiver in favor of a director, such director shall not participate in the deliberation or vote relating to such waiver.
Internal Audit Function
The Company will maintain an internal audit function whose head will report directly to the Audit Committee. The internal audit function is responsible for bringing a systematic, disciplined approach to evaluate the effectiveness of risk management, control and governance processes. Its duties include monitoring the compliance by Company operations with the Company’s internal controls and identifying any deficiencies in the design or operation of such internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data.
EXHIBIT I - Guidelines for Determining Independence of Directors
(A) A director will not be deemed “independent” if: (i) the director is affirmatively determined by the board of directors of the Company to have a material relationship to the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company); (ii) the director is or was within the last three years employed by the Company or any of its subsidiaries; (iii) an immediate family member of the director is or was within the last three years employed by the Company or any of its subsidiaries as an executive officer; (iv) the director or an immediate family member of the director has received during any twelve-month period within the last three years more than $120,000 in direct compensation (other than director and Board committee fees and pension or other forms of deferred compensation not contingent on continued service as a director from the Company and its subsidiaries), provided, however that for purposes of this subparagraph (iv), compensation received by an immediate family member for service as an employee of the Company (other than an executive officer) shall not be included in determining a director’s independence; (v) the director, or an immediate family member of the director, is a current partner of a firm that is the Company’s internal or external auditor; (vi) the director is a current employee of such audit firm; (vii) an immediate family member of the director is a current employee of such audit firm and personally works on the Company’s audit; (viii) the director or an immediate family member of the director was within the last three years (but is no longer) a partner or employee of such audit firm and personally worked on the Company’s audit within that time; (ix) an executive officer of the Company is or was within the last three years on the compensation committee of the board of directors of a company that employed the director, or an immediate family member of the director, as an executive officer at the same time; or (x) the director is a current employee, or has an immediate family member who is a current executive officer, of a company or tax exempt organization having any of the relationships with the Company described in paragraph (B) below.
(B) The following commercial or charitable relationships are considered to be material relationships that would impair a director’s independence: (i) if a director is a current employee, or an immediate family member of a director is a current executive officer, of another company that has made payments to, or receives payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of the other company’s consolidated gross revenues or (ii) if a director is a current employee, or an immediate family member of a director is a current executive officer, of a tax exempt organization, and the Company’s discretionary charitable contributions to the organization in the aggregate are greater than $1 million, or 2% of that organization’s consolidated gross revenues. (The amount of any “match” of charitable contributions under the Company’s matching gifts program will not be included in calculating the amount of the Company’s contributions for this purpose.) The Board will annually review all commercial and charitable relationships of directors.
(C) For relationships other than those of the types described in (A) and (B), the determination of whether the director has a material relationship with the Company, and therefore may not be independent, will be made in good faith by the directors who satisfy the guidelines set forth in such preceding paragraphs.
(D) For purposes of these guidelines the term “immediate family member” includes an individual’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law and anyone (other than domestic employees) who shares such individual’s house.
(E) For purposes of these guidelines the term “executive officer” shall have the same meaning as the term “officer” in Rule 16a-1(f) of the Securities Exchange Act of 1934.
EXHIBIT II - Role of Chair and Chief Executive Officer and Lead Independent Director
Chair and Chief Executive Officer
The Chair and Chief Executive Officer ("CEO") is responsible for the overall Board and director effectiveness and for the overall performance of the Company including strategy, operations, talent and organization as well as reputation of the Company with all stakeholders. The Chair and CEO is a director and an executive of the Company. Specific duties of the Chair include:
- Setting the agenda for Board meetings in collaboration with the Lead Independent Director.
- Chairing the Board meetings to set the tone and ensure open discussion, constructive debate, and decision-making.
- Ensuring the directors receive accurate, timely and clear information on the Company and performance to take sound decisions and provide advice to promote the Company’s success.
- Leading the process of identifying and coaching individual directors on development needs to ensure overall effectiveness of the Board.
- Leading the process to select Chairs of Board Committees, working with the Lead Independent Director, and seeking input from all directors.
- Building an effective and complementary Board and succession process for Board appointments, working with the Lead Independent Director and the Chair of the Sustainability, Corporate Governance and Nominating Committee Chair, subject to Board and shareholders’ approval.
- Ensuring that the effectiveness of the Board and Committees of the Board are evaluated at least once annually, working with the Lead Independent Director and the Chair of the Sustainability, Corporate Governance and Nominating Committee.
- Ensuring effective implementation of Board decisions.
- Regularly reviewing the operational performance and strategic plans of the Company.
- Representing the Company externally in industry groups, or with partners, investors, and potential alliances or business development targets.
- Ensuring there is appropriate delegation of authority from the Board to executive management.
- Helping set the tone and upholding the highest standards of ethics and integrity and encourage that throughout the Company.
- Creating a vision, strategy and long-term commitments for the Company to fulfill its purpose.
- Preparing annual operating plans, goals and objectives for the Company, including financial and non-financial targets, and presenting the plans for approval by the Board of Directors.
- Managing the Company’s operating performance and execution on an ongoing basis, across all facets of the company.
- Updating the Board of Directors on the performance of the Company on a regular basis, both at regularly scheduled Board meetings as well as between meetings and keeping them updated on key developments and news related to the Company and industry.
- Working with the Executive Leadership Team, developing and regularly updating the strategic plans of the Company including competitive positioning, market opportunities and threats, and reviewing these plans with the Board.
- Leading the Executive Leadership Team to ensure collaboration, effectiveness, and achievement of the Company’s operational and strategic goals.
- Selecting, developing, and retaining top executive talent who are highly effective, diverse, and capable to achieve the Company’s short-term and long-term plans; ensure deep succession plans are in place for leadership continuity across the Company.
- Monitoring and improving Company culture through surveys, other listening tools, training and communications on the Leadership Principles, behaviors, and expectations.
- Proactively identifying and managing enterprise risks and ensuring proper controls are in place to minimize and address key risk areas.
- Communicating regularly and compellingly to investors, shareholders and analysts about the Company’s strategies, performance, and future opportunities.
- Communicating regularly to all employees to provide information on Company purpose, commitments, performance, priorities, and strategies to inspire, engage and uplift people.
- Managing an ongoing pipeline of prospects for inorganic growth through mergers, acquisitions, joint ventures, and alliances and effectively executing on growth opportunities.
- Ensuring investments in innovation and technologies to continue to have competitive advantage, organic growth, and advance the Company strategy.
- Determining effective and balanced capital allocation plans working with the Board.
- Helping set the tone and upholding the highest ethics, integrity and code of conduct while effectively managing all compliance and ethics matters in the Company.
- Ensuring the achievement of the Company’s 2030 Sustainability/ESG Commitments by monitoring, measuring. and improving the relevant processes, learning and achievements.
Lead Independent Director
The Lead Independent Director’s role is to coordinate the activities of the Board’s independent directors working with the Chair and CEO. The Lead Independent Director is not an executive of the Company and therefore independent of management. In addition to the duties of all directors as set forth in the Company’s Governance Guidelines, the duties of the Lead Independent Director specifically include:
- Chair meetings of the independent directors.
- Ensure full participation and engagement of all Board members in deliberations.
- Lead the Board in all deliberations involving the CEO’s employment, including hiring, contract negotiations, performance evaluations and separation.
- Engage and counsel the Chair and CEO on issues of interests/concerns of the independent directors including majority and minority viewpoints and encourage all directors to engage the Chair and CEO with their interest and concerns.
- Work with the Chair and CEO to develop an appropriate schedule of Board meetings and approve such schedule, to ensure that directors have sufficient time for discussion of all agenda items, while not interfering with the flow of Company operations.
- Setting the agendas for Board meetings in collaboration with the Chair and CEO.
- Plan the agendas and chair executive sessions of the Board’s independent directors.
- Act as the primary liaison between the directors and the Chair and CEO.
- Provide advice and counsel to the Chair and CEO.
- Keep abreast of key Company activities and advise the Chair and CEO as to the quality, quantity, and timeliness of the flow of information from management that is necessary for the directors to effectively and responsibly perform their duties; although Company management is responsible for the preparation of materials for the Board, the Lead Independent Director will approve information provided to the Board and may specifically request the inclusion of certain material.
- Engage consultants who report directly to the Board and assist in recommending consultants that work directly for Board Committees.
- Working in conjunction with the Sustainability, Corporate Governance and Nominating Committee in compliance with Committee processes, interview director candidates and make recommendations to the Board.
- Provide oversight and act as a liaison between management and the Board with respect to succession of the CEO and lead the Board in an annual review of Board and CEO succession plans.
- Assist the Board and Company officers in assuring compliance with and implementation of the Company’s Governance Guidelines.
- Work in conjunction with the Sustainability, Corporate Governance and Nominating Committee to identify for appointment the members of the various Board Committees, as well as selection of the Committee chairs.
- Be available for consultation and communication with major shareholders coordinating with the Chair and CEO.
- Helping set the tone and upholding the highest standards of ethics and integrity and encourage that throughout the Company.
The Lead Independent Director will be available to serve a three-year term and with a resolution of the Board this term may be extended.
Adopted by Board – February 2, 2022