Board of Directors
Our board of directors is elected by shareholders to provide management oversight and to assure that the long-term interests of shareholders are served. The board recognizes that shareholder interests are advanced by balancing the interests of all our stakeholders, including investors, customers, employees, the communities we serve.
A critical function of the board is to contribute diverse perspectives beyond that of our corporate management. Our board composition reflects this philosophy: nine of the ten board members are considered independent under the rules of the New York Stock Exchange and the United States Securities and Exchange Commission.
The board operates under formal corporate governance principles and a code of business ethics. It has four committees: audit, compensation, corporate governance, and finance and risk management. The audit, compensation and corporate governance committees are composed solely of independent directors.
In 2009 we held a total of 37 meetings of the board and individual committees. The near-perfect attendance at these meetings reflects the board’s high level of engagement and commitment.
We continue to strengthen our governance structure, beginning at the board level.
In 2009 we appointed an independent chairman. Bill Esrey, the chairman emeritus of Sprint Corporation, balances independence with experience, having served on the boards of Spectra Energy and its predecessor companies since 1985.
In addition, we limited the members of our board who are not independent to our chief executive officer. We believe that this structure will maximize the effectiveness of our board oversight and provide perspectives to our business that are independent from management.
Our board also took the initiative to recommend a shareholder vote for annual election of all board members. This action, called “declassifying,” creates stronger, more immediate board accountability. The declassifying motion was approved by a supermajority of shareholders in 2009 and will be phased-in starting with the 2010 annual shareholder meeting. Our policies also require a director who receives a majority of “withheld” votes in an election to tender his or her resignation to the board.
The board conducts an annual performance self-assessment, including assessments of each board committee. The board also holds executive sessions as part of every board meeting and audit and compensation committee meetings. This allows the independent directors an opportunity to discuss issues with more candor than they might with management present.
