CORPORATE GOVERNANCE PRINCIPLES
The basic responsibility of the directors is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its shareholders. The Board has four scheduled meetings a year at which it reviews and discusses reports by management on the performance of the Company, its plans and prospects, as well as immediate issues facing the Company. Directors are expected to attend Board meetings, meetings of committees on which they serve, and annual meetings of shareholders, and to spend the time needed and to meet as frequently as necessary to properly discharge their responsibilities. Information and data that are important to the Board’s understanding of the business to be conducted at a Board or committee meeting are generally distributed in writing to the directors before each meeting in order to allow time to review these materials in advance of the meeting. In addition to its general oversight of management, the Board also performs a number of specific functions, including:
- Providing counsel and oversight on the selection, evaluation, development and compensation of senior management;
- Reviewing, approving and monitoring fundamental financial and business strategies and major corporate actions;
- Assessing major risks facing the Company and reviewing options for their mitigation; and
- Ensuring that processes are in place for maintaining the integrity of the Company, its financial statements, its compliance with law and ethics, its relationships with customers and suppliers, and its relationships with other stakeholders
Directors should possess the highest personal and professional ethics, integrity and values and be committed to representing the long-term interests of the shareholders. They should also have an inquisitive and objective perspective, practical wisdom and mature judgment. We endeavor to have a Board representing diverse experience at policy-making levels in business, government, education and technology. Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively and should be committed to serve on the Board for an extended period of time.
The Governance/Nominating Committee is responsible for assisting the Board in identifying individuals qualified to serve as Board members and recommending to the Board the director nominees for each annual meeting of shareholders. Nominees will be reviewed by this Committee in accordance with its charter. The Committee will consider candidates recommended by shareholders and will evaluate such candidates in the same manner in which it evaluates candidates recommended by other sources. In order to be considered, shareholder nominations should be made in accordance with >Section 15, Article II of the Company’s bylaws.
Section 2, Article III of the Company’s bylaws provide that in an uncontested election of directors (defined as an election in which the number of nominees equals the number of open board seats), directors will be elected by the affirmative vote of a majority of the votes cast in the election. As a condition of nomination, each director nominee will deliver a contingent resignation to the Secretary of the Company prior to the distribution of proxy solicitation materials for the meeting at which the director’s name will be submitted to the shareholders for election. The director’s resignation will become effective only if he or she fails to receive a majority of the votes cast and the Board accepts the resignation. No contingent resignation will be required to be submitted in contested elections (defined in the bylaws as an election in which the number of director nominees exceeds the number of open board seats as of the 14th day prior to the distribution date of the proxy solicitation materials).
If, after the results of an uncontested election have been certified, it is determined that any nominee has failed to receive the requisite majority vote, the members of the Governance/Nominating Committee will evaluate the circumstances of the failed election and will make a recommendation regarding the nominee’s resignation to the full Board. The Committee will evaluate the resignation in light of the best interests of the Company and its shareholders in determining whether to recommend accepting or rejecting the tendered resignation, or whether other action should be taken. The Committee and the Board may consider any factors they deem relevant, including without limitation the director’s qualifications, the director’s past and expected future contributions to the Company, the overall composition of the Board and whether accepting the tendered resignation would cause the Company to be in violation of any applicable rule or regulation (including Nasdaq listing requirements and federal securities laws), or whether the nominee was the target of a “vote no” campaign on an illegitimate basis or on the basis of misinformation. The Board will then act upon the resignation, taking into account the Committee’s recommendation, and will publicly disclose (by a press release, and, if required, by filing an appropriate disclosure with the SEC) its decision regarding the resignation within 90 days of the certification of the election results.
Any incumbent director who fails to receive a majority of the votes cast in an uncontested election and who has tendered his or her resignation will remain active and engaged in Board proceedings while the Governance/Nominating Committee and the Board decide whether to accept or reject the resignation, or whether other action should be taken. The director will not, however, participate in any of the proceedings of the Governance/Nominating Committee or the Board with respect to the subject of his or her resignation.
We do not believe there should be term or age limits for our Board members. While such limits could help ensure there are fresh ideas and viewpoints available to the Board, they hold the disadvantage of losing the contribution of directors who have been able to develop, over a period of time, increasing insight into the Company and its operations and, therefore, provide an increasing contribution to the Board as a whole. As an alternative to term or age limits, the Governance/Nominating Committee reviews each director’s continuation on the Board prior to re-nomination for an additional term.
We do not believe that Board members who retire or significantly change the position they held when they first became a member of the Board should necessarily resign from the Board. There should, however, be an opportunity for the Board, through the Governance/Nominating Committee, to review the continued appropriateness of Board membership under the circumstances.
A majority of our directors are independent. The full Board makes an annual determination as to each non-management director’s independence. We believe those directors who do not meet Nasdaq’s independence standards also make valuable contributions to the Board and to the Company by reason of their experience and wisdom. Executive sessions of the independent directors are scheduled in conjunction with each quarterly Board meeting. Additional meetings may be scheduled as deemed necessary by the independent directors.
A Lead Independent Director is selected by the independent members of the Board. This director presides at executive sessions of the independent directors, presides at board meetings in the absence of the Chairman, makes recommendations with regard to board meeting agendas, serves on the Executive Committee, and serves as a liaison between the independent directors and the Company’s leadership team.
The Chairman will establish the agenda for each Board meeting. Board members are encouraged to suggest agenda items and are free to bring up subjects at meetings that are not on the agenda. The Board reviews the Company’s long-term strategic plans and the principal issues the Company expects to face in the future during at least one Board meeting each year.
The Board has an Audit Committee, Compensation Committee, Governance/Nominating Committee and Finance Committee. Currently, all of the members of these committees qualify as independent under the criteria established by Nasdaq. Committee members are appointed by the Board upon the recommendation of the Governance/Nominating Committee. While the Board believes consideration should be given to rotating committee memberships periodically, it does not believe that rotation should be mandatory.
Each of the committees referenced above has a charter, copies of which are published on our website at www.acxiom.com. The charters set forth the purposes, goals and responsibilities of the committees. The charters also provide that the directors will annually evaluate the performance of the committees on which they serve. The chairman of each committee, in consultation with the committee members, determines the frequency and length of the committee meetings.
In addition to the committees referenced above, there is an Executive Committee comprised of management Board members and the Lead Independent Director. The Board has delegated authority to the Executive Committee to handle certain routine matters that do not require the attention of the full Board. The Board may, from time to time, establish or maintain additional committees as necessary or appropriate.
Directors have full and free access to the Company’s leaders and associates. Any meetings or contacts that a director wishes to initiate may be arranged through the Company Leader or the Corporate Secretary, or directly by the Board member. The directors will use their judgment to ensure that these contacts are not disruptive to the business operations of the Company and will, to the extent appropriate, copy the Company Leader and Corporate Secretary on any written communications between a director and an associate of the Company.
The Board encourages management to arrange for presentations at Board meetings by senior leaders or other key associates of the Company who (a) can provide additional insight into the Company’s operations because of personal involvement or expertise, and/or (b) are individuals who have future leadership potential and who should be given exposure to the Board. Board meetings may also be attended from time to time by outside advisors to the extent such advisors’ participation is deemed necessary and appropriate to assist the Board in understanding the material being presented to the Board.
The Company believes that compensation for non-management directors should be competitive and should encourage ownership of the Company’s stock through the payment of a portion of director compensation in stock and/or options to purchase stock. The form and amount of director compensation will be recommended to the Board by the Governance/Nominating Committee. Management directors serving on the Board will not receive any additional compensation for their service as directors.
Management is responsible for providing an orientation for new directors. This process includes presentations by senior management to familiarize new directors with the Company’s strategic plans, its significant financial, accounting and risk management issues, its compliance programs, its code of business conduct and ethics, its principal officers, and its internal and independent auditors. In addition, the orientation process includes visits to Company headquarters and, to the extent practical, certain of the Company’s other facilities.
The Board will fully comply with any federal laws, SEC rules, Nasdaq rules, or other applicable requirements pertaining to the continuing education of directors. Board members are encouraged to voluntarily participate in any continuing education events they believe would enhance their value to the Company. The expenses of attending any such events will be borne by the Company if requested by the directors.
We believe that the Board should be free to make its selection of Chairman and Company Leader in the way it deems best for the Company and its shareholders at any given point in time. The Board therefore has no policy with respect to the separation of the offices of Chairman and Company Leader. The Board believes this issue is part of the succession planning process and is in the best interests of the Company and it shareholders for the Board to make a determination regarding this issue when it annually elects the Company Leader.
The Compensation Committee will conduct an annual review of the Company Leader’s performance and will provide a report of its review to the full Board.
Senior management will make periodic reports to the Governance/Nominating Committee and the full Board on management succession planning with regard to the senior leadership team. The Governance/Nominating Committee and the full Board will annually approve a succession plan for the Company Leader. The Company Leader is encouraged to provide the Board with his or her recommendations and evaluations of potential successors, along with a review of any proposed development plans.
The Board of Directors conducts an annual self-evaluation to determine whether it and its committees are functioning effectively. The Governance/Nominating Committee recommends a process for the assessment, which focuses on the Board’s contribution to the Company and on areas in which the Board believes improvements should be made.
The Board believes that in most instances management should speak for the Company in accordance with the Company’s public disclosure practices. However, shareholders desiring to communicate with the Lead Independent Director or with other non-management members of the Board may do so confidentially and, if desired, anonymously, by calling the toll-free telephone number or sending a letter or an e-mail message to the address listed on the Company’s website.
The Board and its committees have the authority to hire independent legal, financial or other consultants and advisors as they deem necessary, without consulting or obtaining the approval of management.
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