Audit Partner Rotation
Company policy imposes rotation requirements on audit partners on the Company’s audit engagement team in accordance with applicable SEC regulations.
Functioning of Committees
Number of Committees
The Board currently has four standing committees: Audit, Finance, Nominating and Corporate Governance and Personnel and Organization. The Board believes that this committee structure allows the Board to focus on the significant areas of Colgate's activities. Each Committee has a written charter approved by the Board setting forth its purpose and responsibilities. Directors are encouraged to attend the meetings of all Committees of which they are not members, and Committee meetings are often attended by all directors. Also, the Board may appoint additional special committees at any time, if deemed appropriate.
Assignment and Rotation of Committee Chairs and Members
The Nominating and Corporate Governance Committee recommends to the Board a committee structure, including the composition of Committees. As part of this process, the Nominating and Corporate Governance Committee reviews committee chair assignments and committee membership at least once every three years, and the Board, on the recommendation of the Nominating and Corporate Governance Committee, rotates the Committee Chairs and committee membership as appropriate. All Committees are made up entirely of independent directors.
Frequency and Length of Committee Meetings
On the recommendation of the Nominating and Corporate Governance Committee, the Board fixes a schedule of regular meetings of each of the Committees in advance of each year. The length of meetings varies depending upon the matters considered. Currently, the Audit Committee meets eight times each year; the Finance Committee meets five times each year; the Nominating and Corporate Governance Committee meets four times each year; and the Personnel and Organization Committee meets four times each year. Meetings are scheduled to allow adequate time to consider all matters thoroughly.
Committee Agendas
Each Committee of the Board has a regular schedule of matters to be taken up during the course of the year. This ensures that all key areas for which a Committee is responsible are reviewed at appropriate times. Prior to each meeting, the Chair of the Committee, in consultation with the Chairman and senior management, fixes the agenda for the upcoming meeting, including regularly scheduled matters and other matters which he or she determines are appropriate for consideration at the meeting. Members of a Committee may add any matter to an agenda. Prior to the meeting a copy of the agenda is forwarded to all directors so that they are aware of the matters to be discussed at the upcoming meeting.
Assessing the Committees' Performance
Self-evaluations of the Committees are conducted annually. The Committees review the results of their evaluations with the Board and identify meaningful steps to enhance their performance.
Leadership Development
Formal Evaluation of the Chief Executive Officer
The Personnel and Organization Committee consists of six independent directors. One of its principal responsibilities, together with the other independent directors of the Board, is to evaluate the Chief Executive Officer’s performance against established goals and objectives and make recommendations to the Board regarding the CEO’s compensation based on this evaluation.
Succession Planning
At least once each year, the Personnel and Organization Committee conducts a formal review of CEO and senior management succession planning. On an ongoing basis, the Personnel and Organization Committee consults with the CEO and advises the Board of Directors with respect to senior management succession planning, discussing potential successors to key executives and examining backgrounds, capabilities and appropriate developmental assignments.
People Development
The Personnel and Organization Committee of the Board reviews from time to time the people development programs of the Company, including recruitment policies, training programs, benefit programs and career development processes.
Stock Ownership Guidelines and Related Policies
Stock Ownership Guidelines
To further align the interests of the Company’s directors and officers with stockholders, the Board has established minimum stock ownership guidelines that apply to all non-employee directors and members of senior management. Non-employee directors are required to own Company stock or stock units equal in value to five times their annual stock retainer, the Chief Executive Officer is required to own stock or stock units equal in value to eight times his or her annual salary, and senior managers of the Company are subject to ownership requirements ranging from one to four times annual salary.
The Personnel and Organization Committee of the Board develops and reviews from time to time the Stock Ownership Guidelines set forth above and recommends any changes for approval by the Board of Directors.
Pledges of Company Stock
The Company’s directors and officers are prohibited from pledging Company stock. In addition, any Company stock pledged by other Colgate employees is not considered in determining whether the minimum stock ownership guidelines described above have been satisfied, subject to a five-year grace period for existing pledges.