These guidelines reflect the position of the Board of Directors of Colgate-Palmolive Company (the “Company”) on significant corporate governance issues as of March 2013. The Board will review these guidelines from time to time to ensure that they address new facts and circumstances and evolving corporate governance issues. The Board welcomes comments and suggestions about the guidelines, which should be forwarded to: Andrew D. Hendry, Secretary, Colgate-Palmolive Company, 300 Park Avenue, New York, NY 10022, 212-310-2239.
Role of the Board of Directors
The role of the Board of Directors is to oversee the business, assets, affairs and performance of the Company in the best interests of its stockholders. The Board focuses its activities on the key requirements of the Company, such as corporate strategy, evaluation of the performance of the CEO and other senior executives of the Company, succession planning and the Company's business practices.
Leadership of the Board
Selection of Chairman and CEO
Stockholders are best served if the Board retains flexibility to decide what leadership structure works best for the Company based on the facts and circumstances existing from time to time. Currently, the offices of Chairman and CEO are held by the same person, Ian Cook. The Board does not believe that its independence or performance would be enhanced by requiring that the Chairman be an independent director. The Board follows sound corporate governance practices, as described in these guidelines, to ensure its independence and effective functioning. Most importantly, nine of the ten directors are independent and meet regularly in scheduled executive sessions. These sessions are led by an independent Lead Director with clear duties to ensure proper checks and balances. In addition, the Board’s audit, compensation and governance committees are and have for many years been composed solely of independent directors. This means that oversight of critical issues such as the integrity of the Company’s financial statements, CEO and senior management compensation, Board evaluation and selection of directors is entrusted to independent directors. The Board retains the right to review this determination as facts and circumstances change.
Executive Sessions of Independent Directors
At each regularly scheduled Board meeting, a separate executive session with only the independent directors present is scheduled. The Lead Director chairs these sessions.
Lead Director
The Lead Director is selected annually by and from the independent directors. The position of Lead Director is rotated among the independent directors every year in accordance with a schedule established by the independent directors based on the recommendation of the Nominating and Corporate Governance Committee. The Lead Director has the following responsibilities:
Preside at all meetings of the Board at which the Chairman, President and CEO is not present, including the executive sessions of the independent directors;
Establish agendas for the executive sessions of the independent directors in consultation with the other directors;
Serve as liaison between the independent directors and the Chairman, President and CEO (although all independent directors are encouraged to communicate freely with the Chairman, President and CEO and other members of management at any time);
Review and approve information to be sent to the Board;
Review and approve proposed Board meeting agendas;
Review and approve meeting schedules to help assure that there is sufficient time for discussion of all agenda items;
Have the authority to call meetings of the independent directors, as appropriate;
Be available, as deemed appropriate by the Board, for consultation and direct communication with stockholders; and
Perform such other duties as the Board may specify from time to time.
Communications to the Board of Directors
Stockholders and other interested parties may communicate directly with the Company’s non-management directors using the email and postal addresses that are included in the Company’s annual proxy statement and posted on its website.
Size and Composition of the Board
Size of the Board
The Board believes that a range of seven through 12 directors, as currently provided by the by-laws of the Company, allows the Board to function most effectively in its decision-making and promotes discussion and participation by individual Board members. The Board also believes that this range allows the Board enough flexibility to add outstanding candidates to the Board. There are currently ten directors. All Board members stand for re-election annually. The Company does not have a classified or staggered board.
Mix of Inside and Outside Directors
The Board believes that a substantial majority of directors should be independent. Nine of Colgate’s ten directors are independent and only the Chairman, President and CEO is a member of Colgate management.
Definition of Independence for Outside Directors
The Board believes that an independent director should be free of any relationship with Colgate or its senior management that may in fact or appearance impair the director’s ability to make independent judgments or compromise the director’s objectivity and loyalty to stockholders. Based on this principle, the Board has adopted director independence standards that outline the types of relationships, both personal and professional, between directors and the Company, its senior management and other directors that, if present, would preclude a finding of independence. These standards, which are stricter than those required by the New York Stock Exchange, guide the Board’s annual affirmative determinations of independence. A copy of these standards is available on the Company’s website.
Former Chief Executive Officer's Board Membership
The Board believes that the Board membership of a former CEO is a matter to be decided in each individual instance when the CEO offers his or her resignation from the Board of Directors. Under the by-laws of the Company, no former CEO may be re-elected to the Board after reaching age 65 (unless a majority of the non-employee directors approves such service).
Board Membership Criteria
On the recommendation of the Nominating and Corporate Governance Committee, the Board has adopted a written statement of the criteria for Board membership, which is used by the committee in evaluating individual director candidates. This statement takes into account the current needs of the Company and the qualities needed for Board membership, including experience in business, education and public service fields, international experience, educational achievement, strong moral and ethical character, diversity and other criteria. A copy of these criteria is available on the Company’s website.
Selection of New Director Candidates
The Board selects new director candidates based on the recommendation of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee, which is made up entirely of independent directors, identifies, screens and recruits potential candidates for membership on the Board of Directors, taking into account the needs of the Company and the Board at the time. The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders, evaluating them in the same manner in which the committee evaluates candidates recommended by others.
Majority Voting in Director Elections
Under Colgate’s by-laws, in an uncontested election for directors (i.e., an election where there are the same number of nominees as seats on the Board), directors must be elected by a majority of the votes cast at the meeting. A majority of votes cast is achieved when the number of shares voted “for” a director’s election exceeds 50% of the votes cast with respect to that director’s election. “Votes cast” includes votes for and against each nominee and excludes abstentions.
If a nominee for director who is an incumbent is not re-elected by a majority of the votes cast as set forth above, and no successor has been elected at the meeting, the by-laws require the director to promptly tender his or her resignation to the Board of Directors in accordance with an agreement that each nominee is required to sign in order to be eligible for election or re-election as a director.
The Nominating and Corporate Governance Committee shall make a recommendation to the Board of Directors as to whether to accept or reject the tendered resignation or to take other action. The Board of Directors shall act on the tendered resignation, taking into account the committee’s recommendation, and shall publicly disclose its decision and rationale within 90 days from the date of certification of the election results. The committee in making its recommendation, and the Board of Directors in making its decision, may each consider any factors or other information that it considers appropriate or relevant. The director who tenders his or her resignation shall not participate in the recommendation of the committee or the decision of the Board of Directors with respect to his or her resignation.
If a director’s resignation is accepted by the Board, or if a nominee who is not an incumbent director is not elected, then the Board in its discretion may determine either to fill such vacancy or to reduce the size of the Board.
In contested elections, where there are more nominees than seats on the Board, directors are elected by a plurality vote. This means that the nominees who receive the most votes of all the votes cast for directors will be elected.
Directors Who Change Their Present Job Responsibility
In the event of a material change in a director's qualifications or status, such as a change in employment, he or she is required to offer to resign from the Board. The Nominating and Corporate Governance Committee reviews the desirabili
These guidelines reflect the position of the Board of Directors of Colgate-Palmolive Company (the “Company”) on significant corporate governance issues as of March 2013. The Board will review these guidelines from time to time to ensure that they address new facts and circumstances and evolving corporate governance issues. The Board welcomes comments and suggestions about the guidelines, which should be forwarded to: Andrew D. Hendry, Secretary, Colgate-Palmolive Company, 300 Park Avenue, New York, NY 10022, 212-310-2239.
Role of the Board of Directors
The role of the Board of Directors is to oversee the business, assets, affairs and performance of the Company in the best interests of its stockholders. The Board focuses its activities on the key requirements of the Company, such as corporate strategy, evaluation of the performance of the CEO and other senior executives of the Company, succession planning and the Company's business practices.
Leadership of the Board
Selection of Chairman and CEO
Stockholders are best served if the Board retains flexibility to decide what leadership structure works best for the Company based on the facts and circumstances existing from time to time. Currently, the offices of Chairman and CEO are held by the same person, Ian Cook. The Board does not believe that its independence or performance would be enhanced by requiring that the Chairman be an independent director. The Board follows sound corporate governance practices, as described in these guidelines, to ensure its independence and effective functioning. Most importantly, nine of the ten directors are independent and meet regularly in scheduled executive sessions. These sessions are led by an independent Lead Director with clear duties to ensure proper checks and balances. In addition, the Board’s audit, compensation and governance committees are and have for many years been composed solely of independent directors. This means that oversight of critical issues such as the integrity of the Company’s financial statements, CEO and senior management compensation, Board evaluation and selection of directors is entrusted to independent directors. The Board retains the right to review this determination as facts and circumstances change.
Executive Sessions of Independent Directors
At each regularly scheduled Board meeting, a separate executive session with only the independent directors present is scheduled. The Lead Director chairs these sessions.
Lead Director
The Lead Director is selected annually by and from the independent directors. The position of Lead Director is rotated among the independent directors every year in accordance with a schedule established by the independent directors based on the recommendation of the Nominating and Corporate Governance Committee. The Lead Director has the following responsibilities:
Preside at all meetings of the Board at which the Chairman, President and CEO is not present, including the executive sessions of the independent directors;
Establish agendas for the executive sessions of the independent directors in consultation with the other directors;
Serve as liaison between the independent directors and the Chairman, President and CEO (although all independent directors are encouraged to communicate freely with the Chairman, President and CEO and other members of management at any time);
Review and approve information to be sent to the Board;
Review and approve proposed Board meeting agendas;
Review and approve meeting schedules to help assure that there is sufficient time for discussion of all agenda items;
Have the authority to call meetings of the independent directors, as appropriate;
Be available, as deemed appropriate by the Board, for consultation and direct communication with stockholders; and
Perform such other duties as the Board may specify from time to time.
Communications to the Board of Directors
Stockholders and other interested parties may communicate directly with the Company’s non-management directors using the email and postal addresses that are included in the Company’s annual proxy statement and posted on its website.
Size and Composition of the Board
Size of the Board
The Board believes that a range of seven through 12 directors, as currently provided by the by-laws of the Company, allows the Board to function most effectively in its decision-making and promotes discussion and participation by individual Board members. The Board also believes that this range allows the Board enough flexibility to add outstanding candidates to the Board. There are currently ten directors. All Board members stand for re-election annually. The Company does not have a classified or staggered board.
Mix of Inside and Outside Directors
The Board believes that a substantial majority of directors should be independent. Nine of Colgate’s ten directors are independent and only the Chairman, President and CEO is a member of Colgate management.
Definition of Independence for Outside Directors
The Board believes that an independent director should be free of any relationship with Colgate or its senior management that may in fact or appearance impair the director’s ability to make independent judgments or compromise the director’s objectivity and loyalty to stockholders. Based on this principle, the Board has adopted director independence standards that outline the types of relationships, both personal and professional, between directors and the Company, its senior management and other directors that, if present, would preclude a finding of independence. These standards, which are stricter than those required by the New York Stock Exchange, guide the Board’s annual affirmative determinations of independence. A copy of these standards is available on the Company’s website.
Former Chief Executive Officer's Board Membership
The Board believes that the Board membership of a former CEO is a matter to be decided in each individual instance when the CEO offers his or her resignation from the Board of Directors. Under the by-laws of the Company, no former CEO may be re-elected to the Board after reaching age 65 (unless a majority of the non-employee directors approves such service).
Board Membership Criteria
On the recommendation of the Nominating and Corporate Governance Committee, the Board has adopted a written statement of the criteria for Board membership, which is used by the committee in evaluating individual director candidates. This statement takes into account the current needs of the Company and the qualities needed for Board membership, including experience in business, education and public service fields, international experience, educational achievement, strong moral and ethical character, diversity and other criteria. A copy of these criteria is available on the Company’s website.
Selection of New Director Candidates
The Board selects new director candidates based on the recommendation of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee, which is made up entirely of independent directors, identifies, screens and recruits potential candidates for membership on the Board of Directors, taking into account the needs of the Company and the Board at the time. The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders, evaluating them in the same manner in which the committee evaluates candidates recommended by others.
Majority Voting in Director Elections
Under Colgate’s by-laws, in an uncontested election for directors (i.e., an election where there are the same number of nominees as seats on the Board), directors must be elected by a majority of the votes cast at the meeting. A majority of votes cast is achieved when the number of shares voted “for” a director’s election exceeds 50% of the votes cast with respect to that director’s election. “Votes cast” includes votes for and against each nominee and excludes abstentions.
If a nominee for director who is an incumbent is not re-elected by a majority of the votes cast as set forth above, and no successor has been elected at the meeting, the by-laws require the director to promptly tender his or her resignation to the Board of Directors in accordance with an agreement that each nominee is required to sign in order to be eligible for election or re-election as a director.
The Nominating and Corporate Governance Committee shall make a recommendation to the Board of Directors as to whether to accept or reject the tendered resignation or to take other action. The Board of Directors shall act on the tendered resignation, taking into account the committee’s recommendation, and shall publicly disclose its decision and rationale within 90 days from the date of certification of the election results. The committee in making its recommendation, and the Board of Directors in making its decision, may each consider any factors or other information that it considers appropriate or relevant. The director who tenders his or her resignation shall not participate in the recommendation of the committee or the decision of the Board of Directors with respect to his or her resignation.
If a director’s resignation is accepted by the Board, or if a nominee who is not an incumbent director is not elected, then the Board in its discretion may determine either to fill such vacancy or to reduce the size of the Board.
In contested elections, where there are more nominees than seats on the Board, directors are elected by a plurality vote. This means that the nominees who receive the most votes of all the votes cast for directors will be elected.
Directors Who Change Their Present Job Responsibility
In the event of a material change in a director's qualifications or status, such as a change in employment, he or she is required to offer to resign from the Board. The Nominating and Corporate Governance Committee reviews the desirabili
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