The objective of the Company (and therefore of its management and Board of Directors) is to conduct its business activities so as to enhance shareholder value. In pursuing this role, the Board attempts to assure the success of the Company by selecting an appropriately qualified corporate management team, overseeing corporate strategy and performance, and acting as a resource for management in matters of planning and policy. In furtherance of these objectives, the Board has adopted the following Corporate Governance Principles.
Consistent with the importance of the Board's responsibilities, Board members are expected to rigorously prepare for, attend, and participate in all Board meetings and meetings of Board committees on which they serve and to devote the time necessary to appropriately discharge their responsibilities. Each Board member is expected to ensure that other commitments do not materially interfere with the member's service as a Director.
BOARD COMPOSITION AND PERFORMANCE
Qualifications of Directors
The Board Affairs Committee is responsible for reviewing with the Board from
time to time the appropriate skills and characteristics required for Board members.
Consideration should be given to professional experience, personal character,
diversity, age, outside commitments (e.g., service on other Boards) and particular
areas of expertise - all in the context of the needs of the Board.
Outside Directorships & Committee
Service
Directors will advise the Chair of the Board and Chair of the Board Affairs
Committee in advance of accepting an invitation to serve on another public company
board or to accept additional committee assignments on other Boards in order
for the Chairs to consider possible conflicts of interest, impact on the director's
independence and ability to discharge his/her obligations to the Company.
There shall be no pre-determined limitation on the number of other Boards of
Directors on which Directors of the Company may serve, although no Director
serving on D&B's Audit Committee should serve on more than two other corporate
audit committees without the prior approval of the Board. In addition, the CEO
may not serve on more than one other Board of Directors without prior approval
of the Board.
Selection of Director Nominees
The Board Affairs Committee, with direct input from the Chair of the Board,
is responsible for screening candidates for directorships in accordance with
the criteria described under "Qualification of Directors." When Director nominees
are needed, the Committee selects and reviews candidates, makes recommendations
to the Board, and oversees the process of selection and nomination. The Board
Affairs Committee will review the nomination of incumbent Directors for re-election
to the Board upon expiration of such Director's term. The Board is responsible
for the final selection of its own members and for recommending them for election
by the shareholders.
Shareholders may propose nominees for consideration by the Board Affairs Committee
by submitting the names and supporting information to: Chair of the Board Affairs
Committee, D&B, 103 JFK Parkway, Short Hills, NJ 07078-2708.
Director Orientation and Continuing Education
The Board Affairs Committee will provide, with the assistance of management,
suitable programs for the orientation of new directors and the continuing education
of incumbent directors which include, among other things, reviewing background
materials, new product materials and the strategic plans of the Company, and
meeting with Senior Leadership.
Size of Board
The Board believes that the appropriate number of Directors for the Company
is approximately 7-9.
However, the Board Affairs Committee periodically assesses the appropriate size
of the Board and may recommend changes from time to time to the Board, subject
to the requirement in the By-Laws that there shall be a minimum of three Directors.
Board Independence
At least two-thirds of the members of the Board will be "independent" under
the rules of the New York Stock Exchange and under applicable law.
However, the Board recognizes that from time to time it may be appropriate and
desirable for members of Senior Leadership, in addition to the Chief Executive
Officer ("CEO"), to serve on the Board.
Directors Who Change Their Principal Employment
Directors will be required to offer to submit their resignation upon retirement
or other significant change in their principal employment, whereupon the Board
will determine whether to accept the offer of resignation.
Classes of Directors
The Board is divided into three classes, designated Class I, Class II and Class
III. At each Annual Meeting of Shareholders, successors to the class of Directors
whose term expires at that Annual Meeting are elected for a three-year term.
A Director shall hold office until the Annual Meeting for the year in which
the Director's term expires or until the Director's successor shall be elected
and shall qualify.
Code
of Conduct
Directors are expected to adhere to the Company's Code of Conduct and conduct
themselves with the highest level of integrity and in a way that will not tarnish
the Company's reputation and brand.
Retirement Age
It is recommended that directors who reach age 72 retire from the Board immediately
prior to the next Annual Meeting of Shareholders.
Term Limits
The Board does not believe it should establish term limits. While term limits
could help ensure that 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.
Assessing Board Performance
The Board annually engages in discussions on Board effectiveness which is supported
by a formal questionnaire on overall Board processes and performance. Responses
to the questionnaire are forwarded to the Chair of the Board Affairs Committee
and discussed with the Chair of the Board and then the full Board. This discussion
will be of the Board's contribution as a whole and will identify specific areas
in which improvements may be made. The purpose is to increase the effectiveness
of the Board, not to target individual Board members.
The Board also engages in an individual director assessment process. This is
facilitated through distribution of an assessment questionnaire. The responses
are forwarded to an external consultant, who then provides each Director with
a written report containing their feedback. This is followed by one-on-one meetings
between the consultant and each Director to discuss individual performance and
areas for improvement.
Board Compensation Review
The Compensation & Benefits Committee from time to time reviews the status
of Board compensation in relation to similarly situated U.S. companies.
Changes to Board compensation, if any, should come at the suggestion of the
Compensation & Benefits Committee, but with full discussion and concurrence
by the Board.
Review of Antitakeover Provisions
The Board Affairs Committee (or such other Committee of independent directors
as may be appointed by the Board) will periodically review the Company's shareholders'
rights plan and other antitakeover provisions and will report to the Board whether
such measures continue to be in the best interests of shareholders. If it deems
appropriate, the independent Committee will recommend to the Board that all
or some of such measures should be modified or terminated.
Outside Advisors
The Board has the authority to retain independent consultants, legal counsel
or other advisors as it may deem advisable to assist the Board in the independent
discharge of its responsibilities. The Company will provide for appropriate
funding, as determined by the Board, for payment of compensation to any advisors
employed by the Board.
BOARD RELATIONSHIP TO SENIOR MANAGEMENT
Regular Attendance of Non-Directors at Board Meetings
The Board welcomes the regular attendance at each Board meeting of members of
management who are not Directors. The Board encourages Senior Management to
schedule presentations at Board meetings by managers who: (a) can provide additional
insight into the items being discussed because of personal involvement or (b)
have future potential that Senior Management believes should be given exposure
to the Board.
Board Access to Senior Leadership
The Board has complete access to the Company's management.
It is assumed that Board members will use judgment to be sure that this contact
is not distracting to the business operation of the Company and that such contact,
if in writing, be copied to the CEO, if appropriate.
Board Interaction with Institutional Investors, Press, Customers, Etc.
The Board believes that Management speaks for the Company. Individual Board
members may, from time to time, meet or otherwise communicate with various of
the Company's constituencies, but it is expected the Board members would do
this with the knowledge of the CEO and, in most instances, at the CEO's request.
Executive Sessions
The non-management Directors will hold regularly-scheduled executive sessions
without the CEO or other management present. The Chair of the Board Affairs
Committee will preside over these executive sessions.
BOARD MEETINGS
Scheduling and Selection of Agenda Items for Board Meetings
There are six regularly scheduled Board meetings per year.
The Chair of the Board and the Corporate Secretary of the Company draft the
agenda for each Board meeting and distribute it in advance to the Board.
Each Board member is encouraged to suggest items for inclusion on the agenda.
Board Materials
Information and data that is important to the Board's understanding of the business
and of scheduled agenda items should be distributed sufficiently in advance
of the meeting to give the Directors a reasonable opportunity for review. Generally,
Directors receive Board materials no less than three business days in advance
of a meeting.
Strategic Planning
At a minimum, the Board shall hold an annual strategic planning meeting. The
Board and management will engage in a comprehensive review and discussion of
the Company's strategic goals, as well as management's plans to achieve them.
BOARD COMMITTEES
Number, Structure and Composition of Committees
Currently, the three committees of the Board are: Audit, Compensation &
Benefits and Board Affairs. From time to time, there may be occasions on which
the Board may want to form a new committee or disband a current committee depending
upon the circumstances.
The membership of the Audit, Compensation & Benefits and Board Affairs Committees will be "independent" under the criteria established by the New York Stock Exchange and applicable laws. The Board believes that the appropriate number of Directors for each Committee is 4 to 5.
Assignment and Term of Service of Committee Members
The Board Affairs Committee is responsible, with consideration of the desires of individual Board members, for assigning Board members to various Committees and appointing Committee Chairs.
Each Committee member will serve at the pleasure of the Board for such term as the Board may decide or until such Committee member is no longer a member of the Board.
Committee Charters
Consistent with New York Stock Exchange listing requirements, each Committee will have a written charter approved by the Board. The charters will set forth the purposes and responsibilities of the Committees as well as qualifications for Committee membership, procedures for appointment and removal, structure and operations, and reporting to the Board. The charters will also provide that each Committee will annually evaluate its performance. Consistent with the New York Stock Exchange listing requirements, the charters will be included on the Company's website and copies of the charters will be made available upon request to the Company's Corporate Secretary.
Committee Meetings
The Committee Chair, in consultation with the Committee members and appropriate Senior Leadership, determines the frequency and length of Committee meetings and establishes the agenda for such meetings.
Annual Evaluations
Each Committee will perform an annual evaluation of its effectiveness. The results of these evaluations will be discussed with the full Board.
MANAGEMENT REVIEW
Formal Evaluation of the Chief Executive Officer
A CEO evaluation will be conducted once each year. Non-management Directors will meet without the CEO and discuss the CEO's performance and the impact of performance on compensation. The Chair of the Compensation & Benefits Committee will discuss the evaluation with the CEO.
The Compensation & Benefits Committee considers the results of this evaluation when making compensation decisions concerning the CEO.
Management Succession
At a minimum, on an annual basis, the CEO reviews succession planning and management development with the Board (or an independent Committee thereof) and provides an assessment of potential successors to the position of CEO. There should be available, on a continuing basis, the CEO's recommendation as to a successor in the event of unexpected disability.
Public Disclosure
Consistent with the New York Stock Exchange listing requirements, these guidelines will be included on the Company's website and will be made available upon request to the Company's Corporate Secretary.