f)
a director who is, or has a Family Member who is, a current partner of our independent registered public accounting firm, or was a partner or employee of the independent registered public accounting firm of NI Holdings, Inc. who worked on our audit at any time during any of the past three years.
Under these criteria, all directors except Michael J. Alexander and Jeffery R. Missling are independent. North Dakota insurance law requires that one-third of the members of each committee of the board be independent, except for the Audit, Nominating and Corporate Governance, and Compensation Committees, which may only include independent directors.
Functions of the Board of Directors
The Board of Directors typically meets quarterly, with additional meetings as necessary, to review and discuss the performance of the Company, the Company’s plans and initiatives, and any immediate issues facing the Company. Directors are expected to attend all Board meetings, with only occasional absences, and to prepare for the meetings by reading any materials presented to them in advance of the meetings. Directors are expected to participate fully in the activities of any Board committees to which they belong and likewise to attend all committee meetings, with only occasional absences, and to prepare for the committee meetings by reading any materials presented to them in advance of the meetings.
In addition to its general oversight of management, the Board of Directors also performs a number of specific functions, including:
a)
selecting, evaluating, and compensating the chief executive officer and overseeing succession planning for the chief executive officer;
b)
providing counsel and oversight on the selection, evaluation, development, and compensation of executive officers;
c)
reviewing, monitoring, providing counsel, and, where appropriate, approving fundamental financial and business strategies and major corporate actions;
d)
assessing major risks facing the Company and reviewing options for their mitigation; and
e)
ensuring processes are in place for maintaining the integrity of the Company through (i) its financial statements, (ii) compliance with law and ethics, (iii) relationships with customers, vendors, and agents, and (iv) relationships with other interested parties.
Board Committees
Although we would qualify as a “controlled company” under the NASDAQ Stock Market listing rules because Nodak Mutual Group, Inc. owns over 50% of our outstanding common stock, we do not intend to rely on the exemptions from certain of the corporate governance rules for NASDAQ listed companies. The Company has determined the following four standing committees: Compensation, Audit, Executive, and Nominating and Corporate Governance. These committees of the Board typically meet at least quarterly, with additional meetings as necessary. Set forth below is a brief description of our standing committees, and the duties and responsibilities of such committees.
Compensation Committee
The Compensation Committee is responsible for discharging the Board’s responsibilities relating to compensation of the Company’s directors and executive officers. In addition, the Compensation Committee:
a)
reviews, evaluates, and approves the compensation and benefit plans and policies of Company employees, including its executive officers;
b)
reviews, evaluates, and approves the compensation for our directors;
c)
grants stock options and restricted stock awards to employees, executive officers, and directors under our approved Stock and Incentive Plan; and