Corporate Governance
Compliance with Nasdaq Independence Standards for Non-Controlled Companies
Nasdaq, on which the Companys common stock is listed, established exemptions from its governance requirements for controlled companies, defined as
companies in which a single person, entity, or group holds more than 50% of the voting power for the election of its directors. The Company is a controlled company by virtue of the fact that Trust K, discussed below, has the power to
vote approximately 93.5% of the Companys outstanding shares of Class B Common Stock.
In keeping with the Companys historic recognition of the
importance of having a majority of independent directors, the Company elected to comply voluntarily with all the Nasdaq listing standards that otherwise do not apply to controlled companies. Thus, a majority of the Board are independent directors
and all members of the three Board Committees, Audit, Compensation and Talent Management, and Corporate Governance and Nominating, are independent.
Prior to his
death in October 2018, Terence E. Adderley, our former Chairman, was the trustee of Trust K. Upon his death, Trust K became irrevocable and, in accordance with the provisions of the trust, Andrew H. Curoe, David M. Hempstead, and William U. Parfet
were appointed as successor trustees (the co-trustees). The co-trustees act by a majority vote when making investment decisions with respect to the
Class B Common Stock held by Trust K. The co-trustees, acting as a majority, have sole voting and investment authority over Trust K and cannot be removed or replaced by the beneficiaries of Trust K.
William U. Parfet, a co-trustee, is the brother of Donald R. Parfet, Chairman of the Board. In determining that Donald R. Parfet
is an independent director, the Board considered, among other things, that Donald R. Parfet and William U. Parfet are financially independent of one another, that the co-trustees are required to act by
majority vote and that none of the co-trustees serves as an officer or director of the Company or has any personal financial interest in Trust K that could benefit from actions taken by the Board.
Role of the Board of Directors
The Board bears
responsibility for the oversight of management on behalf of stockholders in order to ensure long-term value creation. In that regard, the Board oversees and provides guidance for the Companys business, property, and affairs. On an ongoing
basis, the Board oversees managements development and implementation of the Companys strategy and business planning process, and monitors performance relative to the achievement of those plans. The Board sets the tone at the top to
support a corporate culture that emphasizes ethical standards, professionalism, integrity, and compliance. The Board and its committees consider long-range strategic issues and material risks facing the Company, together with managements
actions to address and mitigate these risks; oversee corporate policies and processes to promote and maintain the integrity of the Companys financial reporting and controls, legal and ethical compliance, and relationships with customers and
suppliers; review the Companys sustainability practices and strategies; and provide oversight relative to the compensation of senior management, leadership development, and management succession planning.
As part of its oversight of the strategic direction of the Company, senior leadership presents to the Board at the beginning of each year the annual business plans for
each business unit and the consolidated annual business plan for the Company as a whole. At each subsequent meeting throughout the year, management shares quarterly performance results for each business unit and the whole Company, and the Board
discusses how these outcomes compare to the annual plans. Each year, the Board engages in a two-day offsite strategic planning meeting with management where it conducts a comprehensive review and discussion of
the Companys strategic direction and goals over the short-, medium-, and long-term, as well as managements plans to achieve such goals. At least twice each year, the business unit presidents provide an
in-depth review of their businesses to the Board, which includes a review of the strategic goals of the business and business performance relative to business strategy.
Board Leadership and Governance Structure
The
Board is responsible for establishing and maintaining the most effective leadership structure for the Company. At the present time, the Board has determined that the roles of the Chairman of the Board and the Chief Executive Officer
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