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CORPORATE GOVERNANCE
The Company has a long history of engaging
shareholders to gain an understanding about the issues
and concerns that are important to them. We believe
that open communications can have a positive influence
on our corporate governance practices such as the
Company's decision to become the first publicly traded
company in the United States to voluntarily allow
shareholders a say-on-pay. Additionally, as part of this
governance philosophy, we communicate with our
shareholders on a regular basis.
Director Independence
The Board of Directors annually assesses the
independence of each Director nominee. The Board
has determined that with respect to W. Paul Bowers,
Toshihiko Fukuzawa, Elizabeth J. Hudson, Douglas W.
Johnson, Robert B. Johnson, Charles B. Knapp, Joseph
L. Moskowitz, Barbara K. Rimer, DrPH, Melvin T. Stith,
and , (i) none of such individuals is precluded from
being an independent director under the New York
Stock Exchange (“NYSE”) listing standards and (ii)
none of such individuals has a material relationship with
the Company (either directly or as a partner,
shareholder, or officer of an organization that has a
relationship with the Company), and that accordingly,
each such individual is considered an “independent
director” for purposes of the NYSE listing standards.
The Board of Directors has also determined that Takuro
Yoshida, who is not standing for re-election at the
Annual Meeting, was an “independent director” for
purposes of the NYSE listing standards during the time
he was a director. The Board made its determination
based on information furnished by all Directors
regarding their relationships with the Company and
research conducted by management.
Board Leadership Structure
Daniel P. Amos has served as our Chairman of the
Board since 2001 and as our CEO since 1990. The
Board believes that the most effective Board leadership
structure for the Company at the present time is for the
CEO to continue to serve as Chairman of the Board in
conjunction with the appointment of a Lead Non-
Management Director as described below. This
structure has served the Company well for many years.
Combining the positions of Chairman and CEO
provides the Company with decisive and effective
leadership. The Board believes that Mr. Amos’ in-depth
long-term knowledge of the Company’s operations and
vision for its development make him the best qualified
person to serve as both Chairman and CEO. Because
the CEO is ultimately responsible for the day-to-day
operation of the Company and for executing the
Company’s strategy, and because the performance of
the Company is an integral part of Board deliberations,
the Board believes that Mr. Amos is the Director most
qualified to act as Chairman of the Board. However, the
Board retains the authority to modify this structure to
best advance the interests of all shareholders, if
circumstances warrant such a change.
The Board also believes that its existing corporate
governance practices achieve independent oversight
and management accountability. These governance
practices are reflected in the Company’s Guidelines on
Significant Corporate Governance Issues and the
Committee charters and include the following:
the substantial majority of the Board are
independent Directors;
the Audit and Risk, Compensation, and
Corporate Governance Committees all comprise
independent Directors;
the Company has a Lead Non-Management
Director with the responsibilities described
below; and
the Non-employee Directors meet at each
regularly scheduled Board meeting in executive
session without management present.
Lead Non-Management Director
The position of Lead Non-Management Director
currently rotates triennially among the Chairs of the
Audit and Risk, Compensation, and Corporate
Governance Committees. Douglas W. Johnson is
currently the Lead Non-Management Director. The
responsibilities of the Lead Non-Management Director
include the following:
consulting with the Chairman and Secretary in
establishing the agenda for each Board meeting;
setting the agenda for, and leading, all executive
sessions of the Non-employee Directors;
when appropriate, discussing with the Chairman
matters addressed at such executive sessions;
facilitating discussions, between Board meetings,
among the Non-employee Directors as appropriate;
serving as a liaison between the Non-employee
Directors and the Chairman of the Board;
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