«Role of the Board of Directors The primary responsibilities of the Board of Directors of the Company (the “Board”) are oversight, counseling and ...»
The current standing committees of the Board are Audit, Human Resource and Compensation, and Nominating and Corporate Governance. The members of these committees consist only of independent directors. The Board may form and disband new temporary or permanent committees, depending upon circumstances from time to time. The chair of each committee, in consultation with the committee members, will determine the frequency and length of the committee meetings consistent with the requirements set forth in the committee’s charter. The chair of each committee, in consultation with the committee members and management, will develop the committee’s agenda.
Assignment and Rotation of Committee Members
The Nominating and Corporate Governance Committee is responsible for recommending to the full Board the assignment of directors to the committees of the Board and the appointment of committee chairs. The Board appoints committee members and chairs of committees annually.
The Board, directly and through its Audit Committee, provides oversight to the integrity of the financial statements of the Company; the independent accountants’ qualifications and independence; the performance of the Company’s internal audit function and independent accountants; and the compliance by the Company with legal and regulatory requirements.
The Human Resource and Compensation Committee, on behalf of the Board, evaluates and determines the compensation of the Company’s executive officers; reviews the Company’s key strategic and operational human resource issues and succession planning processes; oversees compensation and benefit plans, policies and programs of the Company; administers the equity-based incentive compensation plans of the Company; and considers from time to time and, when appropriate, makes recommendations to the Board as to the development and succession plans for the senior management of the Company.
Both the members of a committee and the committee chairs are determined based upon the needs and factors then existing. A rotation policy with a fixed term is not mandated.
Each committee of the Board will have its own charter, which will be publicly available on the Company’s website. The charters will set forth the purposes, goals and responsibilities of the committees as well as qualifications for committee membership, procedures for committee member appointment and removal, committee structure and operations and committee reporting to the Board. The charters will also provide that each committee will annually evaluate its own performance.
Attendance at Board and Committee Meetings Directors are expected to attend in person all regularly scheduled Board and Committee meetings and to participate telephonically when they are unable to attend in person. Directors are expected to attend our Annual Shareholders Meeting.
Regular Attendance of Non-Directors at Board Meetings Regular attendees at Board Meetings include the Executive Vice Presidents, the General Counsel and the Secretary. Others may attend from time to time upon invitation, with the approval of the Chairman and the President and Chief Executive Officer.
Executive Sessions The non-management directors meet regularly in Executive Session without management present.
Opportunities for these Executive Sessions should be available at the beginning or at the end of each regularly scheduled Board meeting. Generally the Board will meet in Executive Session at each regularly scheduled Board meetings. The Lead Independent Director shall chair each Executive Session. At least one Executive Session per year is devoted to succession planning and Chairman and President and Chief Executive Officer performance and compensation.
Formal deliberations or decisions concerning the business and affairs of Jacobs occur only during regular or special meetings of the Board and not at Executive Sessions.
Board Presentations The Chairman and the President and Chief Executive Officer establish the agenda for each Board meeting, although other Board members are free to suggest items for inclusion on the agenda. Each director is free to raise at any Board meeting subjects that are not on the agenda for that meeting. As a general rule, written presentations on specific subjects are sent to Board members approximately one week in advance so that Board meeting time may be optimized and discussion time focused on questions that the Board has about the material. Management will endeavor to provide on a timely basis material that is concise, informative and clear. On those occasions in which the subject matter does not lend itself to a written presentation, the subject may be presented orally at the meeting. Whenever there is no prior distribution of presentation materials, the Chairman and the President and Chief Executive Officer may elect to contact each director by telephone in advance of the meeting to discuss the subject and the principle issues the Board will need to consider.
Board Access to Senior Management Directors have unrestricted and full and complete access to management. It is assumed, however, that directors will use judgment to be sure that contact with management is not distracting to our business operations.
Furthermore, the Board encourages the President and Chief Executive Officer from time to time to bring other members of management to Board meetings to provide additional insights into the items being discussed and/or to give them exposure to the Board.
Board Access to Independent Advisors The Board and its committees have access to any independent legal, financial or other advisors that the Board or the relevant committee (consistent with the provisions of its charter) deems appropriate, without consulting or obtaining the approval of any officer of the Company in advance.
Board Interaction with Institutional Investors and the Press
The President and Chief Executive Officer, Executive Vice Presidents, General Counsel and other designated management personnel speak for Jacobs in accordance with our Code of Conduct. Nonmanagement directors should not speak individually for Jacobs unless requested by the Chairman or the President and Chief Executive Officer. The Board’s policy on Media Relations is more fully set forth in its Code of Conduct.
Board Compensation Review
The Board will periodically review the recommendation of the Nominating and Corporate Governance Committee and, based thereon, will determine the form and amount of director compensation. The Board and the Nominating and Corporate Governance Committee shall consider that questions as to directors’ independence may be raised (1) if directors’ fees and emoluments exceed what is customary, (2) if the Company makes substantial charitable contributions to organizations in which a director is affiliated, or (3) if the Company enters into consulting contracts with (or provides other indirect forms of compensation to) a director. Directors’ retainer compensation are a combination of cash and common stock in order to align the directors’ interests with those of shareholders. Directors may elect to defer some or all of the cash component.
Directors may not receive any other direct or indirect compensation from Jacobs without prior approval by the Board.
Orientation for New Directors and Continuing Education All new directors must participate in the Company’s orientation program for new directors, which includes presentations on our corporate structure and organization, business units, strategic plan, significant financial, accounting and risk-management matters, internal auditors and independent auditors, governance policies, code of conduct, vision and mindset, and other key policies and practices. We provide and encourage continuing education opportunities for directors on matters relevant to the Company, its business and risk profile and any other subject that would assist them in discharging their duties.
Selection of the Chairman and Chief Executive Officer
The Board is free to make its choice for Chairman and for Chief Executive Officer in any manner after consideration of relevant factors at the time of the decision. Therefore, the Board does not have a policy on whether or not the positions of Chairman and Chief Executive Officer should be separate, or whether or not the Chairman should be an officer of Jacobs.
Formal Evaluation of the Chief Executive Officer
The Human Resource and Compensation Committee formally evaluates the Chief Executive Officer annually and reviews the evaluation with the non-management directors. After receiving feedback from them, the chair of the committee reviews the evaluation with the Chairman and, if separate, the Chief Executive Officer. The evaluation is based upon objective criteria including the performance of Jacobs and the Chief Executive Officer’s achievement of goals previously approved by the Human Resource and Compensation Committee. The evaluation is used by the Human Resource and Compensation Committee in determining the compensation of the Chief Executive Officer.
The President and Chief Executive Officer reports annually, first to the Human Resource and Compensation Committee, and then to an Executive Session of the Board, on succession planning for executive officers of the Company (other than the Chairman and the President and Chief Executive Officer).
The Chairman and the President and Chief Executive Officer will also make available, on a continuing basis, the Chairman’s and the President and Chief Executive Officer’s recommendations concerning who is qualified to assume the Chairman’s and/or the President and Chief Executive Officer’s role in the event the Chairman and/or the President and Chief Executive Officer become unable to perform his or her duties.
Lead Independent Director
The Board considers it to be useful and appropriate to designate a non-management director to serve in a lead capacity to coordinate the activities of the other non-management directors and to perform such other duties and responsibilities as the Board may determine. The specific responsibilities of the Lead
Independent Director when acting as such shall be as follows:
(i) Preside at Board Meetings when both the Chairman and the President and Chief Executive Officer are not present;
(ii) Provide the Chairman and the President and Chief Executive Officer with input as to the preparation of the agendas for the Board of Directors meetings and Board Committee meetings and meeting schedules to assure that there is sufficient time for discussion of all agenda items;
(iii) Advise the Chairman and the President and Chief Executive Officer as to the quality, quantity and timeliness of the information submitted by the Company’s management that is necessary or appropriate for the non-management directors to effectively and responsibly perform their duties;
(iv) Develop the agendas for and serve as chair of the executive sessions of the Board’s nonmanagement directors;
(v) Serve as principal liaison between the non-management directors and the Chairman and the President and Chief Executive Officer on sensitive issues;
(vi) Together with the Chairman and the President and Chief Executive Officer, and the Chair of the Nominating and Corporate Governance Committee, take a lead role in the board evaluation process.
The Nominating and Corporate Governance Committee is responsible for recommending to the Board appropriate procedures for the selection of the Lead Independent Director and advising the Board on the appropriate term and duties of the Lead Independent Director as may need to be amended or changed from time to time.
Annual Evaluation of the Board The Board and its committees formally conduct annual self-evaluations to assess and enhance their effectiveness.
Review of Guidelines The Board is responsible for maintaining our corporate governance guidelines. The Nominating and Governance Committee reviews the guidelines annually and reports to the full Board on the committee’s findings and recommendations. If necessary, the guidelines will be revised and updated by the full Board based upon the recommendations of the Nominating and Governance Committee.