CORPORATE GOVERNANCE
Sustainability Leadership
Our CEO, Board of Directors and Governance Committee, alongside an Environmental, Social and Governance (ESG) Executive Council that includes our Chief Financial Officer, Vice President — Business Strategy & General Counsel, Chief Operating Officer, business unit presidents and Vice President — Sustainability, lead our sustainability agenda. Our ESG Executive Council defines ESG strategy and programs and the associated goals and objectives, while our Governance Committee has specific oversight responsibility for our sustainability initiatives and our Audit Committee oversees risk management. In addition, the Company’s People Council and Planet Council are comprised of multi-business, multi-level stakeholder leadership groups which align business direction and decision-making with sustainability goals by identifying metrics to track performance, providing business segment feedback and sharing best practices.
Our Board of Directors receives quarterly updates from management regarding our progress towards our sustainability initiatives. Together with the CEO, the Board of Directors maintains ultimate responsibility for the Company’s ESG programs and initiatives.
Risk Oversight
The Board of Directors provides oversight of the financial, operational, legal and other business risks to the Company on an ongoing basis. Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. The Company faces a number of risks, including economic, financial, cybersecurity, legal and regulatory risks and others, such as the impact of competition. Management is responsible for the day-to-day management of the risk that we face, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board is responsible for satisfying itself that the Company’s risk management processes are adequate and functioning as designed.
While the Board is ultimately responsible for risk oversight, the Audit Committee has primary responsibility for the financial, legal, cybersecurity and other operational risks, and the Compensation Committee assesses the risks associated with our compensation practices. Each of the committees of the Board routinely reports to the full Board on material issues considered by such committee, which may include issues of risk.
Annual Board and Committee Self-Evaluations
The Board conducts an annual self-evaluation to assess whether the Board, its committees, and each member of the Board are working effectively, and to provide an opportunity to reflect upon and improve processes and effectiveness.
The Governance Committee designs and establishes the overall evaluation framework, and the Chair of the Governance Committee leads the evaluation process. Evaluation topics include Board composition and refreshment; timing, agenda, and content of Board meetings; Board dynamics and function; executive succession planning; and an individual self-assessment conducted by each respective Board member. The Chair of the Governance Committee presents a summary identifying any themes or issues that have emerged to the Board on an anonymous basis.
Each committee also conducts its own annual self-evaluation and reports the results to the Board. Each committee’s evaluation includes an assessment of the committee’s compliance with the committee’s charter; the committee’s composition and refreshment; and timing, agenda and content of committee meetings.
Nomination Process for the Board of Directors
The Governance Committee evaluates candidates for the Board of Directors identified by its members, other Board members, as well as the Company’s management and stockholders. The Governance Committee from time to time may also retain a third-party executive search firm to identify qualified candidates for membership on the Board of Directors. A stockholder who wishes to recommend a prospective nominee for consideration by the Governance Committee should follow the procedures set forth below under “Stockholder Proposals.”
Once the Governance Committee has identified a prospective nominee, it makes an initial determination as to whether to conduct a full evaluation. In evaluating a prospective nominee, the Governance Committee may consider among other things,
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2023 Proxy Statement | Mohawk Industries, Inc. |
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