Corporate Governance Guidelines
Corporate Governance Guidelines
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1. Selection of Board Members
A. Board Membership Criteria
The Nominating and Corporate Governance Committee (the "Corporate Governance Committee") is responsible for reviewing with the Board on an annual basis the appropriate skills and characteristics required of Board members in the context of the then-current composition of the Board. This assessment should include, in addition to qualities of intellect, integrity and judgment, issues of diversity, background, senior management experience and an understanding of some combination of marketing, finance, technology, international business matters, government regulation, public policy and the global capital and commodity markets—all in the context of an assessment of the perceived needs of the Board at that point in time.
B. Selection of Directors
The Board is responsible for selecting all members of the Board and for recommending such members for election by the shareholders. The Board delegates the screening process to the Corporate Governance Committee with direct input from the Chairman of the Board or, if the Chairman is not an independent Director, the Presiding Director.
In addition, the Corporate Governance Committee shall make recommendations to the Board concerning the nomination of incumbent Directors for re-election by the Corporation's shareholders for a new term.
C. Extending the Invitation to a Potential Director to Join the Board
Upon approval of a new Director by the Board, the invitation to join the Board shall be extended by the Chairman of the Board.
D. Orientation of New Directors and Continuing Education
The Board and the Corporation have an orientation process for all new Directors that includes providing relevant background material to all new Directors and background briefings by senior management of the Corporation. All Directors are encouraged to participate in continuing education programs to assist them in performing their duties as Directors.
2. Selection of the Chairman of the Board
Based upon such criteria as it deems appropriate, the Board shall designate one of its members to serve as Chairman of the Board. The Chairman of the Board shall serve for such term as the Board shall determine, and shall have such powers as are set forth in the Corporation's By-Laws and these Corporate Governance Guidelines, as such powers may be supplemented from time to time by the Board.
The Board has determined that the Chairman of the Board should be an independent Director. In the event that the Board concludes that the interests of the Corporation and its shareholders would be better served by combining the roles of Chairman and Chief Executive Officer, the Board, upon recommendation of the Corporate Governance Committee, shall designate an independent Director to serve as Presiding Director as set forth in Section 3(H) of these Corporate Governance Guidelines.
The general duty of the Chairman of the Board is to provide leadership on the Board. The specific responsibilities of the Chairman of the Board include, among others: (i) approving agendas for Board meetings; (ii) serving as a liaison and facilitating dialogue between non-executive Directors and the Chief Executive Officer; (iii) keeping non-executive Directors informed between Board meetings; (iv) with the Chair of the Compensation and Leadership Development Committee, leading annual evaluations of the Chief Executive Officer; (v) overseeing Board and Director evaluations; and (vi) presiding at Board meetings and executive sessions of the non-management Directors.
3. Board Composition and Performance
A. Size of the Board
The Board shall have twelve (12) members. It is the sense of the Board that this size is satisfactory. However, subject to the Corporation's Certificate of Incorporation and By-Laws, the Board may increase or decrease the number of Directors as deemed appropriate.
B. Director Responsibilities
The basic responsibility of the Directors is to exercise their reasonable business judgment on behalf of the Corporation. In discharging that obligation, Directors should be entitled to rely on the honesty and integrity of the Corporation's senior executives and its outside advisors and auditors. Directors are expected to attend Board meetings, meetings of the Committees on which they serve and the Corporation's Annual Meeting of Shareholders. If a Director is unable to attend any meeting, he or she should notify the Chairman of the Board.
C. Majority of Independent Directors
The Board will have a majority of Directors who meet the independence criteria established by the New York Stock Exchange. While the Board believes that members of management could also be Directors, membership should not be a prerequisite for executives to obtain any higher management position in the Corporation.
To be considered independent, a Director must have no material relationship (other than as a Director) with the Corporation, or any of its subsidiaries, either directly or as a partner, shareholder or officer of an organization that has a material relationship with the Corporation or any of its subsidiaries. In making independence determinations, the Board shall broadly consider all relevant facts and circumstances. Compliance with the Corporation's definition of independence is reviewed regularly by the Corporate Governance Committee.
A Director is not an independent Director of the Corporation if:
(i) such Director is, or has been within the last three years, an employee of the Corporation, or any of its subsidiaries, or has an immediate family member who is, or has been within the last three years, an executive officer of the Corporation, or any of its subsidiaries;
(ii) such Director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the Corporation, or any of its subsidiaries, other than Director and Committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service);
(iii) (A) such Director is a current partner or employee of a firm that is the Corporation's, or any of its subsidiaries', internal or external auditor; (B) such Director has an immediate family member who is a current partner of such a firm; (C) such Director has an immediate family member who is a current employee of such a firm and personally works on the Corporation's, or any of its subsidiaries', audit; or (D) such Director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the Corporation's, or any of its subsidiaries', audit within that time;
(iv) such Director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any present executive officer of the Corporation, or any of its subsidiaries, at the same time serves or served on the compensation committee of such other company; or
(v) such Director is a current employee, or an immediate family member is a current executive officer, of another company that has made payments to, or received payments (exclusive of contributions to tax exempt organizations) from, the Corporation, or any of its subsidiaries, 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 consolidated gross revenues of such other company.
Proposed contributions or pledges of contributions to tax exempt organizations, by the Corporation within any such organization's given fiscal year that exceeds the greater of $1 million, or 2% of the consolidated gross revenues of such organization, to an entity for which a Director or an immediate family member serves as a director, officer, or member of such entity's fund-raising organization or committee, shall be subject to prior review and approval by the Corporate Governance Committee.
For purposes of this Section C, an "immediate family member" includes a person'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 person's home. Individuals who are no longer immediate family members as a result of legal separation or divorce, or those who have died or become incapacitated are not taken into consideration with respect to the determination of a Director's independence.
For purposes of sub-paragraphs (i), (iv) and (v) above, and Section 3(I) below, an "executive officer" has the same meaning specified for the term "officer" in Rule 16a-1(f) under the Securities Exchange Act of 1934.
D. Stock Ownership
The Board is committed to ensuring that all Directors have an ownership stake in the Corporation. All non-management Directors are subject to a requirement to own or acquire shares under the Corporation's Non-Employee Director Stock Ownership Guidelines. The Board believes that the ownership of a substantial amount of stock in the Corporation is not a basis for disqualifying a Director as being independent. In order to create a direct linkage with corporate performance, the Board believes that a significant portion of a Director's total compensation should be provided in the form of common stock of the Corporation.
E. Directors Who Retire or Change Their Current Job Responsibility
It is the policy of the Board that individual Directors who retire or change the position they held when they were initially elected to the Board will volunteer to resign from the Board as of the date of such retirement or change in position.
It is not the sense of the Board that the Directors who retire or change the position they held when they were initially elected to the Board should necessarily be required to leave the Board. There should, however, be an opportunity for the Corporate Governance Committee on behalf of the Board to review such circumstances and make recommendations to the Board regarding the continued appropriateness of Board membership under such changed circumstances.
F. Retirement Age
Non-management Directors of the Board shall not stand for reelection after reaching age seventy-two (72). In special circumstances, the Board may waive such mandatory retirement age with respect to a Director, subject to review and evaluation on an annual basis, if it deems such waiver to be in the best interests of the Corporation and its shareholders. Officers of the Corporation who are members of the Board shall not stand for reelection following their retirement from the Corporation or upon their leaving the active employment of the Corporation for any reason, except that the Chief Executive Officer or former Chief Executive Officer may be subject to the Board retirement policies applicable to non-management Directors.
G. Board Compensation Review
It is appropriate for the management of the Corporation to report once a year to the Corporate Governance Committee concerning the status of Board compensation in relation to other comparable United States corporations. Compensation levels are reviewed by the Corporate Governance Committee by reference to third-party consultant surveys of corporations including the Corporation's peer group.
Changes in Board compensation, if any, will be made by the full Board based upon a formal recommendation of the Corporate Governance Committee.
H. Presiding Director
In the event that the Chairman of the Board is not an independent Director, the Board shall designate an independent Director to serve as Presiding Director. The selection of the Presiding Director shall be made at a meeting (or portion thereof) at which only independent Directors are present. The Corporate Governance Committee will be responsible for making a recommendation to the independent Directors when the Presiding Director is up for appointment. The Presiding Director shall serve for such term as the independent Directors shall determine. The term of the Presiding Director will automatically expire upon the appointment by the Board of a Chairman who is an independent Director.
Each Director is encouraged to engage in direct communication with the Presiding Director, the Chairman of the Board, the Chief Executive Officer, and the other Directors.
I. Executive Sessions of Directors
The non-management Directors of the Board will meet at regularly scheduled executive sessions without management present. Non-management Directors are all those who are not executive officers of the Corporation or any of its subsidiaries. If the non-management Directors include Directors who are not independent, an executive session including only independent non-management Directors will be scheduled at least once each year. The Chairman or, if the Chairman is not an independent Director, the Presiding Director will preside over each executive session of the non-management Directors.
The independent non-management Directors of the Board will meet in executive session at least once each year without management present in order to review the performance and compensation of the Chief Executive Officer.
J. Director Access to Independent Advisors
The Board and each Committee of the Board shall have the power to hire independent legal, financial or other advisors as they may deem necessary, without consulting or obtaining the approval of any officer of the Corporation in advance.
K. Assessing the Board's and Individual Director's Performance
The Corporate Governance Committee is responsible to report annually to the Board concerning an assessment of the Board's performance and the performance of each of the Committees of the Board. The Corporate Governance Committee's performance evaluation of the Board should assess the Board's contribution as a whole and should specifically review areas in which the Board and/or management believes a better contribution could be made.
The Corporate Governance Committee will also evaluate annually the performance of individual incumbent Directors to be recommended for re-election by the Corporation's shareholders for a new term.
L. Communication with Directors
Shareholders, employees and others may communicate directly with one or more members of the Board by writing to the Corporate Secretary, c/o Office of the General Counsel, S&P Global Inc., 55 Water Street, New York, New York 10041-0003, or by sending an email to the Corporate Secretary at firstname.lastname@example.org.
M. Board's Interaction with the Press, Customers and other Constituencies of the Corporation
The Board believes that management generally speaks for the Corporation. Individual Board members may, from time to time at the request of the Chief Executive Officer or Chairman, meet or otherwise communicate with various constituencies that are involved with the Corporation. If comments from the Board are appropriate, they should, unless otherwise requested by the Chief Executive Officer or Chairman, come from the Chairman.
4. Board Meeting Procedures
A. Selection of Agenda Items for Board Meetings
The Chief Executive Officer will establish the agenda for each Board meeting and the agenda will be reviewed by, as applicable, the independent Chairman or the Presiding Director.
Each Board member can suggest the inclusion of additional item(s) on the agenda. Each Board member can raise at any regular Board meeting subjects for discussion that are not on the formal agenda for the meeting.
B. Board Materials Distributed in Advance
Information and data that is important to the Board's understanding of the various businesses of the Corporation shall be distributed to the Board prior to each Board meeting. Directors should review in advance any materials sent to them before the meeting.
5. Committee Matters
A. Number, Structure and Independence of Committees
The Board shall have the following Committees:
Only independent Directors shall serve on the Audit, Compensation and Leadership Development, and Nominating and Corporate Governance Committees. The Board has the flexibility to form a new Committee as deemed appropriate by the Board or, to the extent permitted by law, to disband a current Committee. The Chairman of each Committee shall report to the full Board, as appropriate, with respect to those matters considered and acted upon by each Committee. The charter of each Committee shall be reviewed by the Board on a regular basis.
B. Assignment and Rotation of Committee Members
The Corporate Governance Committee is responsible, after consultation with the Chairman of the Board or, if the Chairman is not an independent Director, the Presiding Director, and after giving due consideration to the desires of individual Board members, for the assignment of Board members to various Committees and for the selection of Committee Chairmen. The Board believes that Committee Chairmen should be rotated periodically at reasonable intervals at the recommendation of the Corporate Governance Committee.
C. Frequency and Length of Committee Meetings
Each Committee Chairman, in consultation with Committee members, will determine the frequency and length of the meetings of the Committee. Each Committee shall prepare minutes of meetings of the Committee.
Each Committee Chairman may invite management and staff, as appropriate, to attend sessions of Committee meetings.
D. Committee Agenda
The Chairman of each Committee, in consultation with Committee members and the appropriate members of management and staff, will develop the Committee's agenda.
6. Board Relationship to Senior Management
A. Regular Attendance of Non-Directors at Board Meetings
The Chief Executive Officer (after consultation with, as applicable, the independent Chairman or the Presiding Director) may invite senior officers of the Corporation to attend all the non-executive sessions of the Board meetings. The Chief Executive Officer (after consultation with, as applicable, the independent Chairman or the Presiding Director) may invite other executives of the Corporation to attend specific Board meetings.
B. Board Access to Senior Management
Board members shall have complete access to the Corporation's senior management. Such contact, if made in writing, should be copied by the Director to the Chief Executive Officer and, as applicable, to the independent Chairman of the Board or the Presiding Director.
The Board encourages senior management to, from time to time, bring executives to Board meetings who: (i) can provide additional insight into the items being discussed at the meeting because of personal involvement in these areas; and/or (ii) represent executives with future leadership potential that senior management of the Corporation believes should be given exposure to the Board.
7. Leadership Development
A. Formal Evaluation of the Chief Executive Officer
The independent Directors shall make an evaluation of the Chief Executive Officer annually. Such annual performance appraisals shall be communicated to the Chief Executive Officer by the Chairman of the Compensation and Leadership Development Committee and, as applicable, by the independent Chairman of the Board or the Presiding Director.
The annual evaluation of the Chief Executive Officer shall be based on objective criteria, including the performance of the Corporation's various businesses, the accomplishment of long-term strategic objectives and the development of the Corporation's management.
The annual performance evaluation of the Chief Executive Officer shall be used by the Compensation and Leadership Development Committee during the course of its annual deliberations in determining the compensation of the Chief Executive Officer.
B. Succession Planning
The Board shall have responsibility for succession planning involving the Chief Executive Officer and oversight for succession planning involving other senior level positions. As a matter of corporate policy, the Chief Executive Officer shall be required to retire as Chief Executive Officer at age 65.
There should be an annual discussion or report to the Board by the Chief Executive Officer with respect to succession planning concerning the Chief Executive Officer and other senior level positions.
There should also be available, on a continuing basis, the Chief Executive Officer's recommendation concerning an emergency succession plan in the event of the death or disability of the Chief Executive Officer. The Corporate Governance Committee shall review such emergency succession plan with the Chief Executive Officer. The Corporate Governance Committee shall review the emergency succession plan with the Board at least annually.
C. Management Development
There will be an annual discussion or report to the Board by the Chief Executive Officer concerning the Corporation's program for management development.
September 30, 2015