Corporate Governance Policies
Allegion believes in transparent and proactive corporate governance. Click on the links below to access our corporate governance policies.
Corporate Governance Guidelines | Compensation and Human Capital Committee Charter |
Our company is managed under a corporate governance framework and guided by Corporate Governance Guidelines that ensure we operate within applicable legal statutes and New York Stock Exchange requirements, and consistent with ethical global business standards.
In addition to our company’s Memorandum and Articles of Association, our Code of Conduct, which applies to all employees throughout the world, confirms our commitment to ethical behavior and compliance with laws wherever we work. In 2023, the Allegion Board of Directors revised the Allegion Code of Conduct. The Code was revised to enhance its clarity and accessibility. Allegion’s Chief Compliance Officer may make non-material changes to this Code of Conduct from time to time, including updates to the resources, policies and questions and answers provided. All material changes, including any change that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K, must be reviewed by the Audit and Finance Committee and approved by the Board of Directors.
Allegion has a Global Human Rights Policy. The company believes that the fundamental values set forth in this policy should serve as our global minimum business standards.
The Corporate Governance and Nominating Committee of our Board of Directors regularly reviews the company’s governance practices to ensure that we remain current with and operate in accordance with all applicable legal and New York Stock Exchange requirements.
The Board of Directors has the following committees:
- Audit and Finance: Sue Main (Chair), Kirk Hachigian, Steven Mizell, Nicole Parent Haughey, Lauren Peters, Ellen Rubin, Gregg Sengstack and Dev Vardhan
- Compensation and Human Capital: Steven Mizell (Chair), Kirk Hachigian, Sue Main, Nicole Parent Haughey, Lauren Peters, Ellen Rubin, Gregg Sengstack and Dev Vardhan
- Corporate Governance and Nominating Committee: Lauren Peters (Chair), Kirk Hachigian, Sue Main, Steven Mizell, Nicole Parent Haughey, Ellen Rubin, Gregg Sengstack and Dev Vardhan
All committees have written, Board-approved charters detailing their responsibilities. Only non-employee directors serve on these committees. Click here to send questions/comments to Allegion's Board of Directors.
Quick Links to Corporate Governance Guidelines:
ALLEGION PUBLIC LIMITED COMPANY CORPORATE GOVERNANCE GUIDELINES
The following corporate governance guidelines and the charters of the committees of the Board of Directors (the “Board”) of Allegion plc (the “Company”), have been approved by the Board and provide the framework for the corporate governance of the Company.
Role of the Board of Directors
The Company’s business is managed under the direction of the Board. The Board delegates to the Chief Executive Officer (“CEO”), and through that individual to other senior management, the authority and responsibility for managing the Company’s business. The Board’s role is to oversee the management and governance of the Company and to monitor senior management’s performance.
Among the Board’s core responsibilities are to:
- Select individuals for Board membership and evaluate the performance of the Board, Board committees and individual directors.
- Select, monitor, evaluate and compensate senior management.
- Select the CEO and assure that management succession planning is adequate.
- Review and approve significant corporate actions.
- Review and monitor implementation of management’s strategic plans and capital allocation strategy.
- Review and approve the Company’s annual operating plans and budgets.
- Monitor corporate performance and evaluate results compared to relevant peers and the strategic plans and other long-range goals.
- Review the Company’s financial controls and reporting systems.
- Review and approve the Company’s financial statements and financial reporting.
- Oversee the Company’s environmental, social and governance initiatives, strategies, goals and performance.
- Oversee the Company’s key programs, policies and strategies related to its management of human capital resources, including recruitment, development and retention of personnel, talent management, and diversity, equity and inclusion.
- Review the Company’s ethical standards and legal compliance programs and procedures.
- Oversee the Company’s management of enterprise risk, including information technology, cybersecurity, privacy and disruptive technology.
- Monitor relations with shareholders, customers, suppliers, employees, the communities in which the Company operates and other stakeholders.
The Board is comprised of such number of directors as the Board deems appropriate to function efficiently as a body, subject to the Company’s Articles of Association. The Corporate Governance and Nominating Committee reviews the composition of the full Board to identify the qualifications and areas of expertise needed to further enhance the composition of the Board, makes recommendations to the Board concerning the appropriate size and needs of the Board and, on its own or with the assistance of management or others, identifies candidates with those qualifications.
The Board is made up of a substantial majority of independent, non-employee directors and the Board considers this to be the appropriate structure. The Board establishes principles and procedures to determine whether or not any particular director is independent in accordance with applicable regulations and the requirements of the New York Stock Exchange. The Board shall make an affirmative determination at least annually as to the independence of each individual director. The standards currently in effect for determining the independence of individual directors are attached as Exhibit I to these Corporate Governance Guidelines.
Under the Articles of Association, the Board has authority to fill vacancies in the Board and appoint additional directors (in each case subject to their re-election at the next annual general meeting) and to nominate candidates for election by the shareholders. The screening process is done by the Corporate Governance and Nominating Committee with direct input from the Chair and CEO and from the other directors and from time to time with the assistance of director search firms. In considering candidates for director, the Corporate Governance and Nominating Committee will take into account all factors it considers appropriate, including, among other things, skills, expertise, breadth of experience, understanding of business and financial issues, ability to exercise sound judgment, leadership, achievements and experience in matters affecting business and industry, board experience viewpoints, including a candidate’s gender, race, ethnicity, geography and other factors that would complement the existing Board and contribute to enhancing the quality of the Board’s deliberations and decisions, recognizing that our businesses and operations are diverse and global in nature. The Board is also committed to actively seeking highly qualified women and individuals from minority groups to include in the pool from which new candidates are selected. In selecting and assessing potential Board candidates, the Corporate Governance and Nominating Committee considers the entirety of each candidate’s credentials and believes that at a minimum each nominee should satisfy the following criteria: highest character and integrity, independent mindset, personal and professional ethics, business judgment, experience and understanding of strategy and policy-setting, financial literacy, ability and willingness to devote sufficient time to Board matters, and no conflict of interest that would interfere with performance as a director. Shareholders may recommend candidates for Board membership for consideration by the Corporate Governance and Nominating Committee. Such recommendations should be sent to the Committee, care of the Secretary of the Company. Candidates recommended by shareholders are evaluated in the same manner as director candidates identified by any other means.
The Board reserves the right to separate or combine the roles of Chair and CEO as the Board deems appropriate and in the best interests of the Company.
Whenever the Chairman is selected from the independent directors, such director shall be elected as Chair for a one-year term, which term may be renewed by the Board every year, or until his/her earlier death, resignation, retirement, removal, term limit as director or until his/her successor is appointed by the Board.
Whenever the Chair is also the CEO or is a director who does not otherwise qualify as an independent director, it is expected that the independent directors will elect from among themselves a Lead Director of the Board (the “Lead Director”). The Lead Director will be elected for a one-year term, which term may be renewed by the independent directors every year, or until his/her earlier death, resignation, retirement, removal, term limit as director or until his/her successor is appointed by the independent directors of the Board and shall have the roles and responsibilities set forth in Exhibit II to these Corporate Governance Guidelines.
The Board has the following committees: Audit and Finance; Compensation and Human Capital; and Corporate Governance and Nominating. All three committees have written, Board-approved charters detailing their responsibilities and the extent to which they have been delegated powers of the Board. Only independent directors serve on these committees. Chairs and members of these three committees are rotated periodically, as appropriate.
The Audit and Finance Committee meets at least five times each year, the Compensation and Human Capital Committee meets at least four times each year, and the Corporate Governance and Nominating Committee meets at least three times each year. Additional committee meetings are called as required.
The chair of each committee, in consultation with the committee members, shall develop the committee’s agenda. At the beginning of the year each committee shall establish a schedule of subjects to be discussed during the year (to the extent practicable). The schedule for each committee meeting shall be furnished to all directors.
The Chair establishes the agendas for the Board meetings in conjunction with the Lead Director. Each director is free to suggest items for inclusion in the agenda, and each director is free to raise at any Board meeting subjects that are not on the agenda for that meeting. Board materials relating to agenda items are provided to Board members in advance of meetings to allow the directors to prepare for discussion of matters at the meeting. The Board reviews and approves the Company’s yearly operating plan and specific financial goals at the start of each year, and the Board monitors performance throughout the year. At an expanded Board meeting once a year, the Board reviews in depth the Company’s long-range strategic plan. At the expanded meeting, it also reviews senior management development and succession planning.
Management presentations are made to the Board and its committees regularly on various aspects of the Company’s operations. The directors have unrestricted access to management and corporate staff.
All directors are expected to make an effort to attend all meetings of the Board, meetings of the committees of which they are members and the annual meeting of shareholders. Directors should review the materials provided by management and advisors in advance of the meetings of the Board and its committees and should arrive prepared to discuss the issues presented..
The proceedings and deliberations of the Board and its committees are confidential. Each director shall maintain the confidentiality of information received in connection with his or her service as a director (unless otherwise required by law or regulation).
Confidential information includes all non-public information entrusted to or obtained by a director by reason of his or her position on the Board, including information regarding the strategy, business, finances and operations of the Company, minutes, reports and materials of the Board and its committees, other documents identified as confidential by the Company and all other non-public information provided by the Company.
A director or any other participant attending a Board or committee meeting telephonically or by other means of remote communication shall do so in a manner designed to ensure that no other person may hear the proceedings and deliberations of such meeting. Video or audio recordings by any Director or participant at any Board or committee meeting are not permitted.
The obligations described above continue even after the directors’ service on the Board has ended..
Executive Sessions of Independent Directors
The independent directors meet privately in executive sessions to review the performance of the CEO and the effectiveness of the Board meetings. The independent directors also meet as necessary, but at least four times a year, in executive session to consider such matters as they deem appropriate without management being present. The independent Chairman or Lead Director, as the case may be, will preside at the executive sessions.
Director Orientation and Continuing Education
In order to become familiar with the Company, as well as the functioning of the Board, newly-appointed directors receive a variety of materials, including an overview of the Company, its operations and organization. They are also provided with access to key management personnel to provide additional information about the Company, including strategy and significant issues. Management will also maintain a program to keep directors up to date on legal, regulatory and other matters relevant to their positions as directors of a large, publicly-held corporation.
Director Compensation and Stock Ownership
The Corporate Governance and Nominating Committee periodically reviews the Board’s compensation and benefits and compares them with director compensation and benefits at peer companies. It is the Board’s policy that directors be paid in a mix of cash and stock. Directors are required to acquire Company stock equal to three times the annual cash retainer paid to directors. Directors are required to retain ownership of the shares acquired until the stock ownership requirement is met and directors must maintain compliance thereafter until their retirement from the Board. It is also the policy of the Board that directors’ compensation be the sole compensation received from the Company by any non-employee director. Directors who are also employees of the Company shall receive no additional compensation for Board or committee service.
At the beginning of each year, the CEO presents his or her performance objectives for the upcoming year to the Compensation and Human Capital Committee for its approval. At the end of the year, the Compensation and Human Capital Committee discusses the CEO’s performance for the current year against his or her performance objectives. The Compensation and Human Capital Committee uses this performance evaluation in the course of its deliberations when considering the compensation of the CEO. The Compensation and Human Capital Committee and the CEO then meet to review the CEO’s performance evaluation and compensation.
Chief Executive Officer Succession
The Board views CEO selection as one of its most important responsibilities. To assist the Board in succession planning, the CEO reports at least annually to the Board providing an assessment of senior managers and their potential to succeed the CEO, either in the event of a sudden emergency or in anticipation of the CEO’s future retirement.
Director Retirement; Term Limits
Non-employee directors who change the occupation they held when initially elected must offer to resign from the Board promptly following such change. At that time, the Corporate Governance and Nominating Committee will review the continued appropriateness of Board membership under the new circumstances and make a recommendation to the Board. Notwithstanding the foregoing, any non-employee director who is retired shall not be required to offer his or her resignation from the Board if he or she enters into a consulting arrangement with a third party, provided that he or she advises the Chair and the Secretary of the Company of such proposed consulting arrangement prior to entering into the same. Employee directors, including the CEO, must retire from the Board at the time of a change in their status as an officer of the Company, unless the policy is waived by the Board.
Each non-employee director must retire at the annual general meeting immediately following the completion of ten years of service as a Director of the Company.
The CEO must retire within a year immediately following his or her 65th birthday. The Board may, if they deem it appropriate and in the best interests of the Company, extend the CEO’s retirement effective date for up to 3 years immediately following the CEO’s 65th birthday.
Board and Board Committee Performance Evaluation
With the goal of increasing the effectiveness of the Board and its relationship to management, the Corporate Governance and Nominating Committee assists the Board in evaluating its performance as a whole and the performance of its committees at least annually. Each Board committee is also responsible for conducting an annual evaluation of its performance. The effectiveness and contributions of individual directors are considered each year when the directors stand for renomination.
The CEO and other executive officers must seek the approval of the Board (or the Board committee to which this responsibility has been delegated), before accepting outside board memberships with for-profit entities. The CEO may not serve on the board of more than one other publicly held company.
Non-employee directors must advise the Chair of the Board and the Chair of the Corporate Governance and Nominating Committee if they are being considered for election or appointment to a board of directors of another publicly-held company. The Corporate Governance and Nominating Committee will determine whether the new board membership is compatible with continued service on the Company’s Board. It is the policy of the Board that: (i) non-employee directors may not serve on the board of more than four other publicly held companies without the prior approval of the Board, except that any new board members shall be given a reasonable transition period to come into compliance with the policy; (ii) non-employee directors who serve as an executive officer of a public company may not serve on the board of more than one other publicly held company without the prior approval of the Board; and (iii) no member of the Audit and Finance Committee may serve on more than three public company audit committees (including the Company’s Audit and Finance Committee). In addition to the above, the Corporate Governance and Nominating Committee will take into account any recent trends and expectations of institutional investors and other shareholders, as appropriate, when making its recommendation to the Board.
The Board shall have the authority to retain special legal, accounting or other consultants to advise the Board. Generally, this would be with the knowledge of the CEO. The Company will provide for such funding as the Board deems appropriate for the payment of compensation to any special legal, accounting or other consultants retained by the Board. The Board may request, as appropriate, any officer or employee of the Company or the Company’s outside counsel or independent auditor to attend a meeting of the Board or to meet with any members of, or consultants to, the Board.
Communication on behalf of the Company
The Board believes that senior management should speak for the Company. Individual Board members may, from time to time, meet or otherwise communicate with various constituencies that are involved with the Company in coordination with, and at the request of, senior management.
The Company will maintain a code of business conduct and ethics which will articulate for employees, shareholders, customers and suppliers the standards of conduct, including conflicts of interest matters, to which the Company expects to adhere. Directors will also be required to abide by the code of conduct. Any waivers of the conflict of interest requirements of such code in favor of a director or executive officer will be subject to approval by the Board. In the case of the consideration of such a waiver in favor of a director, such director shall not participate in the deliberation or vote relating to such waiver.
The Company will maintain an internal audit function whose head will report directly to the Audit and Finance Committee. The internal audit function is responsible for bringing a systematic, disciplined approach to evaluate the effectiveness of risk management, control and governance processes. Its duties include monitoring the compliance by Company operations with the Company’s internal controls and identifying any deficiencies in the design or operation of such internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data.
Periodic Review of the Corporate Governance Guidelines
The Corporate Governance and Nominating Committee shall, from time to time as it deems appropriate, review and reassess the adequacy of these guidelines and recommend any proposed changes to the Board for approval.
Last revised: December 7, 2023
EXHIBIT I
Guidelines for Determining Independence of Directors
(A) A director will not be deemed “independent” if: (i) the director is affirmatively determined by the board of directors of the Company to have a material relationship to the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company); (ii) the director is or was within the last three years employed by the Company or any of its subsidiaries; (iii) an immediate family member of the director is or was within the last three years employed by the Company or any of its subsidiaries as an executive officer; (iv) the director or an immediate family member of the director has received during any twelve-month period within the last three years more than $120,000 in direct compensation (other than director and Board committee fees and pension or other forms of deferred compensation not contingent on continued service as a director from the Company and its subsidiaries), provided, however that for purposes of this subparagraph (iv), compensation received by an immediate family member for service as an employee of the Company (other than an executive officer) shall not be included in determining a director’s independence; (v) the director, or an immediate family member of the director, is a current partner of a firm that is the Company’s internal or external auditor; (vi) the director is a current employee of such audit firm; (vii) an immediate family member of the director is a current employee of such audit firm and personally works on the Company’s audit; (viii) the director or an immediate family member of the director was within the last three years (but is no longer) a partner or employee of such audit firm and personally worked on the Company’s audit within that time; (ix) an executive officer of the Company is, or was within the last three years, on the compensation committee of the board of directors of a company that employed the director, or an immediate family member of the director, as an executive officer at the same time; or (x) the director is a current employee, or has an immediate family member who is a current executive officer, of a company or tax exempt organization having any of the relationships with the Company described in paragraph (B) below.
(B) The following commercial or charitable relationships are considered to be material relationships that would impair a director’s independence: (i) if a director is a current employee, or an immediate family member of a director is a current executive officer, of another company that has made payments to, or receives payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of the other company’s consolidated gross revenues or (ii) if a director is a current employee, or an immediate family member of a director is a current executive officer, of a tax exempt organization, and the Company’s discretionary charitable contributions to the organization in the aggregate are greater than $1 million, or 2% of that organization’s consolidated gross revenues. (The amount of any “match” of charitable contributions under the Company’s matching gifts program will not be included in calculating the amount of the Company’s contributions for this purpose.) The Board will annually review all commercial and charitable relationships of directors.
(C) For relationships other than those of the types described in (A) and (B), the determination of whether the director has a material relationship with the Company, and therefore may not be independent, will be made in good faith by the directors who satisfy the guidelines set forth in such preceding paragraphs.
(D) For purposes of these guidelines the term “immediate family member” includes an individual’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law and anyone (other than domestic employees) who shares such individual’s house.
(E) For purposes of these guidelines the term “executive officer” shall have the same meaning as the term “officer” in Rule 16a-1(f) of the Securities Exchange Act of 1934.
EXHIBIT II
ALLEGION PLC
Lead Director
Board Role
If appointed, the Lead Director coordinates the activities of all of the Board's independent directors. The Lead Director is the principal confidant to the CEO and ensures that the Board has an open, trustful relationship with the Company's senior management team while also ensuring that the Board has independent leadership separate from the Company’s management. In addition to the duties of all Directors, as set forth in the Company's Corporate Governance Guidelines, the specific responsibilities of the Lead Director, if one is appointed, are as follows:
- Call and chair the meetings of the independent directors when the Chair is not present;
- Ensure the full participation and engagement of all Board members in deliberations;
- Lead the Board in all deliberations involving the CEO's employment, including hiring, contract negotiations, performance evaluations, and dismissal;
- Counsel the Chair on issues of interest/concern to directors and encourage all directors to engage the Chair with their interests and concerns;
- Work with the Chair to develop an appropriate schedule of Board meetings and approve such schedule, to ensure that the directors have sufficient time for discussion of all agenda items, while not interfering with the flow of Company operations;
- Work with the Chair to develop the Board and Committee agendas and approve the final agendas;
- Keep abreast of key Company activities and advise the Chair as to the quality, quantity and timeliness of the flow of information from Company management that is necessary for the directors to effectively and responsibly perform their duties; although Company management is responsible for the preparation of materials for the Board, the Lead Director will approve information provided to the Board and may specifically request the inclusion of certain material;
- Engage consultants who report directly to the Board and assist in recommending consultants that work directly for Board Committees;
- Work in conjunction with the Corporate Governance and Nominating Committee in compliance with the Corporate Governance and Nominating Committee processes to interview all Board candidates and make recommendations to the Board;
- Assist the Board and Company officers in assuring compliance with and implementation of the Company's Corporate Governance Guidelines; work in conjunction with the Corporate Governance and Nominating Committee to recommend revisions to the Corporate Governance Guidelines;
- Call, coordinate and develop the agenda for and chair executive sessions of the Board's independent directors; act as principal liaison between the independent directors and the CEO;
- Work in conjunction with the Corporate Governance and Nominating Committee to identify for appointment the members of the various Board Committees, as well as selection of the Committee Chairs;
- Be available for consultation and direct communication with major shareholders in coordination with the CEO;
- Make a commitment to serve in role of Lead Director for a minimum of three years; and
- Help set the tone for the highest standards of ethics and integrity.
The Chair and CEO of the Company is responsible for working with the Lead Director so that together they achieve the Board governance objectives outlined by the Board.
It is expected that the Chair and CEO will:
- Meet with the Lead Director following each Board meeting to discuss any open matters from the meeting and to receive feedback from the Lead Director regarding issues arising at the executive session(s) of the independent directors.
- Between Board meetings have regular, open and candid conversations with the Lead Director to discuss important issues and seek guidance where appropriate.
- Use the Lead Director as a sounding board and mentor.
- Keep the Lead Director, and as appropriate the full Board, informed about key developments and concerns.
- Consult with the Lead Director on the preparation of Board meeting agendas and content, meeting schedules and the background material provided to the Board.
It should be noted that the Lead Director is not superior to other Directors or Committee Chairs, but rather a focal point and facilitator. The Lead Director is a non-exclusive channel of communication between the CEO and independent Directors and the CEO is encouraged to develop rapport and good communications with all Directors.
CHARTER OF THE AUDIT AND FINANCE COMMITTEE OF THE BOARD OF DIRECTORS OF ALLEGION PUBLIC LIMITED COMPANY
The Audit and Finance Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) to assist the Board in fulfilling its responsibilities to the shareholders and the investment community with respect to its oversight of the:
- Integrity of the Company’s financial statements, including its accounting policies and financial reporting and disclosure practices.
- Adequacy of the system of internal controls within the Company to support the financial and business environment.
- Management of the Company’s financial resources and major financial strategies and transactions.
- Company’s processes to assure its compliance with all applicable laws, regulations and corporate policy.
- Qualification and independence of the Company’s independent registered public accounting firm.
- Performance of the Company’s internal audit function and independent registered public accounting firm.
The Committee shall be comprised of three or more directors, each of whom shall be independent under the requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended, the rules of the New York Stock Exchange (the “NYSE”) applicable for Board and Committee independence and, as determined by the Board consistent with NYSE rules, free from any relationship that would interfere with the exercise of his or her independent judgment in carrying out his or her responsibilities as a member of the Committee.
Each member of the Committee shall be financially literate as determined by the Board in its business judgment, and at least one member of the Committee shall be an “audit committee financial expert” as defined by the Securities and Exchange Commission (“SEC”).
Unless a Chair of the Committee is elected by the full Board, the members of the Committee shall designate a Chair by the majority vote of the full Committee membership. The Chair of the Committee will chair all regular sessions of the Committee and is responsible to set the agendas for Committee meetings. In the absence of the Chair of the Committee, the Committee shall select another member to preside.
The Committee shall meet as often as it determines necessary to carry out its responsibilities, but at least five times annually. The Committee shall meet separately and periodically with management, including the chief financial officer, chief accounting officer, chief compliance officer, the internal auditors and the independent auditor, and have such other direct and independent interaction with such persons from time to time as the members of the Committee deem appropriate. The Committee may meet in person, by telephone or video conference, and may take action by unanimous written consent. The Company Secretary, Assistant Secretary or an individual designated by the Company Secretary shall maintain written minutes of its meetings and shall file such minutes with the books and records of the Company. The Chair shall report to the Board regarding the meeting of the Committee and as otherwise requested by the Board.
The Committee may form subcommittees composed of two or more of its members for any purpose that the Committee deems appropriate and may delegate to such subcommittees such power and authority as the Committee deems appropriate.
A majority of the Committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which there is a quorum shall be the act of the Committee.
The Committee shall have the authority to select, retain and/or replace special legal, accounting or other consultants to advise the Committee. The Company will provide for such funding as the Committee deems appropriate for the payment of compensation to the Company’s independent auditors and any special legal, accounting or other consultants retained by the Committee as well as funding for the payment of ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties. The Committee may request any officer or employee of the Company or the Company’s outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.
The Committee has broad responsibility including oversight of financial reporting, financing, accounting, risk oversight, internal controls and various other duties. Specifically, the Committee shall:
Financial Reporting
1. Meet to review and discuss with management and the independent auditors the Company’s annual audited financial statements and quarterly financial statements prior to their public dissemination, as well as the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the Company’s critical accounting policies and practices, and alternative treatments within generally accepted accounting principles relating to material items. Such review shall include a discussion of significant issues regarding the accounting and auditing principles and practices (and the resolution of any disagreements between management and the independent auditors), any audit problems or difficulties encountered by the Company's independent auditors during their audit work (such as restrictions on the scope of their activities or their access to information), management's response to problems, difficulties or disagreements, the resolution of any disagreements between the Company's auditors and management, as well as the adequacy of the internal controls and a review of any certifications being issued in respect of such statements by senior executives of the Company.
2. Discuss with the independent auditors the matters required to be discussed by the applicable auditing standards adopted by the Public Company Auditing Oversight Board (“PCAOB”) and approved by the SEC from time to time.
3. Review and discuss with management and the independent auditors the Company’s earnings press releases as well as financial information and earnings guidance provided to analysts and rating agencies. The Committee Chair will review and discuss in advance of each quarterly earnings release or provision of earnings guidance. The other Committee members may participate at their option in these discussions.
4. To recommend to the Board whether the audited financial statements should be included in the Company's annual report on Form 10-K for filing with the SEC; and to produce the audit committee report required to be included in the Company's proxy statement.
Financing
5. Consider and approve the Company’s annual financing plan, including its projected capital structure and funding requirements.
6. Consider and recommend for approval by the Board the Company’s external dividend policy and dividend payments.
7. Consider and recommend for approval by the Board the repurchase of the Company’s stock.
8. Consider and recommend for approval by the Board a) issuances of equity and/or debt securities; or b) authorizations for other financing transactions, including bank credit facilities.
Accounting
9. Consider and approve, if appropriate, major changes to the Company’s auditing and accounting principles and practices as recommended by the independent registered public accounting firm, management or the internal auditing department.
10. Review significant accounting and reporting issues, including recent professional and regulatory pronouncements.
Independent Registered Public Accounting Firm
11. To select, retain, compensate, oversee, replace, and terminate, if necessary, any other independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company and to approve all audit engagement fees and terms subject to the requirements of Irish company law.
12. Review, at least annually, the qualifications and performance of the independent registered public accounting firm. In conducting its review and evaluation, the Committee shall obtain and review a report from the independent auditing firm describing (a) the firm’s internal quality control procedures; (b) any material issues raised by the most recent internal quality control or peer review of the firm, or by any inquiry or investigation within the preceding five years by governmental or professional authoritieswith respect to one or more independent audits carried out by the firm; and (c) any steps taken to deal with any issues raised by such review, inquiry or investigation. Based on such review, and taking into account the opinions of the management and the Company’s senior internal audit executive, the Committee should consider whether there should be a rotation of the lead audit partner or the audit firm itself.
13. Review and discuss with the independent registered public accounting firm, in order to satisfy itself as to their independence, all relationships that would reasonably be thought to bear on the objectivity and independence of the independent registered public accounting firm. Ensure the receipt of the independent registered public accounting firms’ annual independent statement.
14. Review with the independent registered public accounting firm and financial management of the Company in advance and approve all auditing services to be performed by the independent registered public accounting firm, including the scope, staffing and, subject to prior delegation from the shareholders, the fees of the independent registered public accounting firm to be incurred in connection with the proposed audit for the current year and, at the conclusion of such audit, review such audit including any comments or recommendations of the independent registered public accounting firm.
15. Approve in advance, subject to and in accordance with applicable laws and regulations, non-audit services and related fees to be performed by the independent registered public accounting firm.
16. Set clear hiring policies for employees or former employees of the independent auditing firm.
Risk Oversight
17. Discuss with management and the independent registered public accounting firm the Company’s policies with respect to risk assessment and risk management and consider and approve the Company’s financial risk management activities, including the areas of foreign exchange, commodities, interest rate exposures, insurance programs and customer financing risks.
18. Consider and approve the Company’s policy for investment of excess cash.
19. Obtain and review periodic reports of the investment performance of the Company’s pension and savings benefit plans.
Internal Controls
20. Obtain and review periodic reports, at least annually, from management assessing the effectiveness of the Company’s internal controls and procedures for financial reporting, including reports on (a) all significant deficiencies or material weaknesses in the design or operation of internal controls; (b) any fraud, whether or not material, that involves management or other employees having a significant role in internal controls; and (c) results of internal control reviews of information technology, cybersecurity and privacy controls and procedures.
21. Obtain from management annually, as required by law, a report on internal controls, which shall (a) state the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting; and (b) contain management’s assessment, as of the end of the most recent fiscal year, of the effectiveness of the internal control structure and financial reporting procedures.
22. Obtain from the independent registered public accounting firm an attestation to (and a report on) the assessment made by management in 20 above.
23. Review the Company’s disclosure controls and procedures and management’s assessment of them.
Other Duties
24. Review and reassess the adequacy of this Charter and the Audit Services Charter annually or more often as conditions dictate, and recommend proposed changes to the Board.
25. Review with the chief compliance officer: (1) the ethics and compliance metrics approved by the Committee and (2) the chief compliance officer’s annual report on the Company’s overall ethics and compliance program and (3) the Company’s periodic ethics and compliance risk assessment.
26. Establish procedures for (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and (b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
27. Review with the General Counsel any legal matters, including litigation and regulatory matters, which could have a significant impact on the Company’s financial statements.
28. Review periodically (at least annually) with the senior tax executive all tax matters affecting the Company’s financial performance.
29. Review periodically (at least annually) the objectives, activities, organizational structure, budget, staffing and qualifications of the internal audit function.
30. Review the appointment and replacement of the senior internal auditing executive and establish and maintain a direct reporting relationship with such executive.
31. Establish and maintain a direct reporting relationship with the chief compliance officer.
32. Prepare and issue the Audit and Finance Committee Report required by the rules of the Securities and Exchange Commission to be included in the Company’s annual general meeting proxy statement.
33. Report to the Board regularly including with respect to all significant issues discussed and make recommendations to be acted upon by the Board.
34. Conduct an annual evaluation of the performance of the Committee.
35. Perform any other activities consistent with this Charter, the Company’s Articles of Association and governing law, as the Committee or the Board deems necessary or appropriate.
If required by the rules of the SEC or the NYSE, this Charter, as amended from time to time, shall be made available to the public on the Company’s website.
Last revised: December 7, 2023
CHARTER OF THE CORPORATE GOVERNANCE AND NOMINATING COMMITTEE OF THE BOARD OF DIRECTORS OF ALLEGION PUBLIC LIMITED COMPANY
TThe Corporate Governance and Nominating Committee (the “Committee”) is responsible for considering and making recommendations to the Board of Directors (the “Board”) concerning corporate governance matters by:
- Identifying individuals qualified to become directors and recommending that the Board select the candidates for all directorships to be filled by the Board or by the shareholders.
- Developing, maintaining and recommending to the Board a set of corporate governance guidelines applicable to the Company.
- Otherwise taking a leadership role in shaping the corporate governance of the Company.
The Committee will consist of three or more directors each of whom is determined by the Board to be “independent” under the rules of the New York Stock Exchange (the “NYSE”).
The members of the Committee shall be elected by the Board and shall serve until such member’s successor is elected or until such member’s earlier resignation or removal. The members of the Committee may be removed, with or without cause, by a majority vote of the Board.
Unless a Chair is elected by the full Board, the members of the Committee shall designate a Chair by the majority vote of the full Committee membership. The Chair of the Committee will chair all regular sessions of the Committee and is responsible for setting the agendas for Committee meetings. In the absence of the Chair of the Committee, the Committee shall select another member to preside.
The Committee shall meet at least three times annually. The Chair of the Board or any member of the Committee may call meetings of the Committee. The Committee may meet in person, by telephone or video conference, and may take action by unanimous written consent. The Company Secretary, Assistant Secretary or an individual designated by the Company Secretary shall maintain written minutes of its meetings and shall file such minutes with the books and records of the Company. The Chair shall report to the Board regarding the meeting of the Committee and as otherwise requested by the Board.
The Committee may form subcommittees composed of two or more of its members for any purpose that the Committee deems appropriate and may delegate to such subcommittees such power and authority as the Committee deems appropriate.
A majority of the Committee shall constitute a quorum for the transaction of business and the act of a majority of those present at any meeting at which there is a quorum shall be the act of the Committee.
The Committee shall have the authority to select, retain and/or replace special legal or other consultants to advise the Committee. The Company will provide for such funding as the Committee deems appropriate for the payment of compensation to any special legal or other consultants retained by the Committee as well as funding for the payment of ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties. The Committee may request any officer or employee of the Company or the Company’s outside counsel or consultants attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.
In furtherance of such purposes the Committee shall:
1. Consider and review, at least annually, the Company’s corporate governance guidelines and make recommendations to the Board for changes which the Committee deems appropriate.
2. Consider and recommend the size, functions and needs of the Board in order to ensure that the Board has the requisite leadership, skills and expertise and that its membership consists of individuals with sufficiently diverse and independent backgrounds.
3. Identify review and recommend candidates to fill new positions or vacancies on the Board consistent with the criteria set forth in the Company’s corporate governance guidelines and such other criteria which the Committee deems appropriate. The Committee shall conduct all necessary and appropriate inquiries into the backgrounds and qualifications of possible candidates. In that connection, the Committee shall have the sole authority to retain and to terminate any search firm to be used to assist it in identifying candidates to serve as directors of the Company, including the sole authority to approve the fees payable to such search firm and any other terms of retention.
4. Review Board candidates and other proposals recommended by shareholders.
5. Propose director nominees for election or reelection for recommendation by the Board to the shareholders.
6. Consider questions of independence and possible conflicts of interest of members of the Board, as well as executive officers.
7. Review and recommend chairs and members of Board committees, giving consideration to the requirements of the committee charters, the Company’s corporate governance guidelines and such other factors which the Committee deems appropriate.
8. Review and make recommendations on the conduct of Board, committee and shareholder meetings.
9. Review and recommend non-employee director compensation.
10. Recommend director retirement policies.
11. Nominate individuals for election by the Board as corporate officers.
12. Review and approve outside board memberships of the Chief Executive Officer and other members of senior management with for-profit entities.
13. Review, approve and oversee any transaction between the Company and any related person (as defined in Item 404 of Regulation S-K) and any other potential conflict of interest situations on an ongoing basis, in accordance with Company policies and procedures.
14. Assist the Board in its oversight of the Company’s environmental, social and governance (“ESG”) initiatives, strategies, goals and performance.
15. Oversee the evaluation of the performance of the Board of Directors, Board committees and management.
16. Conduct an annual evaluation of the performance of the Committee.
17. Review and assess the adequacy of this Charter, at least annually, and recommend proposed changes to the Board.
18. Report to the Board all significant issues discussed and make recommendations to be acted upon by the Board.
19. Perform any other activities consistent with this Charter, the Company’s Articles of Association and governing law, as the Committee or the Board deems necessary or appropriate.
If required by the rules of the SEC or the NYSE, this Charter, as amended from time to time, shall be made available to the public on the Company’s website.
Last revised: December 7, 2023
CHARTER OF THE COMPENSATION AND HUMAN CAPITAL COMMITTEE OF THE BOARD OF DIRECTORS OF ALLEGION PUBLIC LIMITED COMPANY
The purpose of the Compensation and Human Capital Committee (the “Committee”) of Allegion plc is to discharge the responsibilities of the Board of Directors (the “Board”) with respect to the compensation of the Company’s executives and oversight of human capital management.
The Committee shall be comprised of three or more directors, each of whom is determined by the Board to be “independent” under the rules of the New York Stock Exchange (the “NYSE”) applicable for Board and Committee independence. Additionally, no director may serve unless he or she is a “Non-employee Director” for purposes of Rule 16b-3 under the Securities and Exchange Act of 1934, as amended (the "Exchange Act").
The members of the Committee shall be elected by the Board and shall serve until such member’s successor is elected or until such member’s earlier resignation or removal. The members of the Committee may be removed, with or without cause, by a majority vote of the Board.
Unless a Chair is elected by the full Board, the members of the Committee shall designate a Chair by the majority vote of the full Committee membership. The Chair of the Committee will chair all regular sessions of the Committee and is responsible to set the agendas for Committee meetings. In the absence of the Chair of the Committee, the Committee shall select another member to preside.
The Committee shall meet at least four times annually. The Committee Chair or any member of the Committee may call meetings of the Committee. The Committee may meet in person, by telephone or video conference, and may take action by unanimous written consent. The Company Secretary, Assistant Secretary or an individual designated by the Company Secretary shall maintain written minutes of its meetings and shall file such minutes with the books and records of the Company. The Chair shall report to the Board regarding the meeting of the Committee and as otherwise requested by the Board. The Committee may invite such members of management to its meetings as it deems appropriate. However, the Committee shall meet regularly without such members present, and in all cases the Chief Executive Officer and any other such Executive Officers shall not be present at meetings at which their compensation or performance is discussed or determined.
The Committee may form subcommittees composed of two or more of its members for any purpose that the Committee deems appropriate and may delegate to such subcommittees such power and authority as the Committee deems appropriate, except that it shall not delegate its responsibilities for any matters that involve Executive Officer or any matters where it has determined such compensation is intended to be exempt from Section 16(b) under the Exchange Act pursuant to Rule 16b-3 by virtue of being approved by a committee of “non-employee directors.”
The Committee shall also be entitled to delegate its responsibilities with respect to the administration of the incentive compensation, equity compensation, deferred compensation, and employee pension and welfare benefit plans to the Company’s officers and employees, as consistent with applicable law, who may also utilize the services of third-party administrators, record keepers, consultants, and other service providers.
A majority of the Committee shall constitute a quorum for the transaction of business and the act of a majority of those present at any meeting at which there is a quorum shall be the act of the Committee.
The Committee shall have the authority to select, retain and/or replace or obtain advice of, as needed in its sole discretion, compensation and benefits consultants, independent legal counsel and any other adviser to advise the Committee. In that connection, in the event the Committee retains any such adviser, the Committee shall be directly responsible for compensation and oversight of the adviser and shall have the sole authority to approve such adviser’s fees and other retention terms. The Company shall provide appropriate funding, as determined by the Committee, for payment of reasonable compensation to such adviser. The Committee shall undertake an independence assessment prior to selecting the adviser that will provide advice to the Committee, taking into account such factors as may be required by the NYSE from time to time. The Committee shall evaluate whether any compensation and benefits consultant retained or to be retained by it has any conflict of interest in accordance with Item 407(e)(3)(iv) of Regulation S-K.
The Committee shall:
1. Establish the Company’s executive compensation philosophy, strategies, policies and programs to enable the Company to attract, retain, deploy and motivate executives necessary to meet current and future needs of the enterprise, and to ensure the Company’s compensation policies and programs are aligned with shareholder interests (including total shareholder return) and Company performance as compared to relevant peer group companies.
2. Annually review and approve the compensation, including salary, annual incentives, long-term incentives, equity-based awards and all other executive benefits for the Chief Executive Officer.
3. Have sole authority to determine the Chief Executive Officer’s corporate goals and objectives relevant to his or her compensation and evaluate at least annually his or her performance against those goals and objectives, which goals and objectives shall be consistent with the strategic objectives approved by the Board as part of the Long Range Plan and Annual Operating Plan process.
4. Oversee and advise the Chief Executive Officer on the corporate goals and objectives for the Company’s executive officers (as defined by the Exchange Act and related regulations) (the “Executive Officers”), other than the Chief Executive Officer, relevant to their compensation and their performance against these goals and objectives.
5. Annually review and approve compensation, including salaries, annual incentives, long-term incentives, equity-based awards and all other executive benefits for all Executive Officers other than the Chief Executive Officer.
6. Review and approve executive compensation and benefit programs including the Company’s executive incentive compensation plans, equity-based plans and executive pension and welfare plans, discharge any responsibilities assigned to the Committee by any of these plans, oversee the activities of the individuals and committees responsible for administering these plans, and approve or recommend to the Board any material amendments to the plans for which shareholder approval is required.
7. Establish and periodically review policies and programs concerning perquisite benefits, and non-cash or other benefits for the elected officers.
8. Review broad-based employee benefit programs (e.g., major pension plans, employee savings plans and employee health and welfare plans) and recommend to the Board proposals for adoption, significant amendment or termination of such plans.
9. Review and discuss with management the potential risks associated with the Company’s compensation policies, incentive plans and programs as applied to employees generally, and whether such policies, plans and programs incentivize unnecessary and excessive risk taking. Review any material, non-recurring discretionary bonus pool programs for broad employee groups.
10. Exercise all powers and discretion vested in the Board under the Company's equity compensation plans, including the authority to grant awards.
11. Establish, or recommend to the Board, stock ownership guidelines for the Executive Officers and monitor compliance with such guidelines.
12. Approve the creation or revision of any clawback policy allowing the Company to recoup compensation paid to employees and monitor compliance with such policies.
13. Assist the Board in its oversight of the Company’s key programs, policies and strategies related to its management of human capital resources, including recruitment, development and retention of personnel, talent management, and diversity, equity and inclusion.
14. Oversee the succession and development plans (including succession plans for emergencies) for Executive Officers. For clarity, succession and development planning (including for emergencies) for the Chief Executive Officer will be overseen by the Board unless all independent directors are also members of the Committee.
15. Approve the content of employment, severance, change in control plans or arrangements or amendments thereto for Executive Officers.
16. Advise the Board on management proposals to shareholders on executive compensation matters, including advisory votes on executive compensation and frequency of such votes, and proposals received from shareholders on executive compensation matters; oversee management’s engagement with shareholders and proxy advisory firms on executive compensation matters; review the results of such votes and consider any implications in connection with the Committee’s ongoing determinations and recommendations regarding the Executive Officer’s compensation and Company’s executive compensation policies and practices.
17. Report to the Board all significant issues discussed and make recommendations to be acted upon by the Board, as appropriate.
18. Review, and recommend to the Board inclusion of, the executive compensation disclosures made in the Company’s annual proxy statement or annual report on Form 10-K, including the Compensation Discussion & Analysis contained therein, and prepare the Compensation Committee report to be included in the annual proxy statement or annual report on Form 10-K.
19. Conduct an annual evaluation of the Committee’s performance.
20. Review and assess the adequacy of this Charter, at least annually, and recommend proposed changes to the Board.
21. Perform any other activities consistent with this Charter, the Company’s Articles of Association and governing law, as the Committee or the Board deems necessary or appropriate.
If required by the rules of the SEC or the NYSE, this Charter, as amended from time to time, shall be made available to the public on the Company’s website.
Last revised: December 7, 2023
Allegion Global Human Rights Policy
Allegion believes in fundamental standards that support our commitment to our employees, our business partners, our customers, and our communities. We have, therefore, adopted this Global Human Rights Policy. Although many of the standards set forth in this Policy align with basic working conditions and human rights concepts advanced by international organizations such as the International Labor Organization and the United Nations, this policy represents Allegion’s own minimum standards for working conditions and human rights. While local laws or regulation may necessitate a different interpretation or application of this Policy, Allegion believes that the fundamental values set forth in this Policy should serve as our global minimum business standards.
Non Discrimination and Harassment
Allegion is an Equal Employment Opportunity Employer and will not discriminate based on race, sex, color, national origin, creed, religion, pregnancy, age, disability, military/veteran status, sexual orientation, genetic information, marital status, or any legally protected status. We are dedicated to fulfilling this policy as it relates to decisions regarding employment, promotion, demotion, transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation and benefits, and selections for training, including apprenticeship, as well as any other terms or conditions of employment. Success at Allegion is a direct reflection of our people and culture. In fact, we believe that our values-driven culture is a formidable competitive advantage — one we must foster and protect. We embrace and value the diverse backgrounds of all our employees and seek to create an atmosphere in which ideas can be expressed freely in an environment of mutual trust, honesty and respect. Bias, discrimination, or harassment based upon race, sex, color, national origin, creed, religion, pregnancy, age, disability veteran status, sexual orientation, genetic information, marital status, or any legally protected status must not be part of our business practices.
Freedom of Association, Work Environment, and Compensation
Allegion respects our employees’ right to individually decide to join or to refrain from joining any lawful organization. The Company is committed to complying with laws pertaining to freedom of association, consultation, and collective bargaining, and to promoting a work environment that fosters communication, productivity, and employee engagement. Allegion provides employees with compensation and benefits that are fair and equitable for the type of work performed and the local business market where the work is performed. Employees receive at least the minimum wage required by law and are provided benefits and overtime compensation compliant with applicable laws. Except in extraordinary circumstances, our employees work no more than the limits established by law. Employees receive full details regarding their pay and deductions for taxes, benefits, etc.
Protecting Employee Policy
Allegion is committed to providing privacy protection of employee data maintained by the Company. Employee data will be used for the sole purpose of supporting Company operations and providing employee benefits. Allegion has safeguards in place to ensure personal data is protected from unauthorized access and disclosure, including limiting access to such data only to those employees with a legitimate business purpose.
Prohibiting Forced Labor and Child Labor
At Allegion, the employment relationship must be voluntary, and the terms of employment must comply with applicable laws and regulations. The Company prohibits the employment of forced labor or child labor.
Promoting Safety, Health and Environment
Allegion is committed to providing employees with a safe and healthy work environment. We strive for continuous improvement in our products and processes to minimize waste and protect the environment.
Expectations for Our Suppliers
Allegion is committed to the highest standards of ethical and business conduct. Our relationships with our business partners, including our suppliers, vendors, consultants, and contract labor, are defined by contracts which are based on lawful and ethical practices. We request that our business partners adopt and enforce standards similar to those in this Policy.
Doing Business Globally
As a global company, Allegion’s business transactions cross many borders. Allegion is committed to engaging in reasonable due diligence and screening of customers and distributors to ensure compliance with laws that regulate international trade.
Promoting Enforcement of the Policy
Allegion believes that the ability to enforce a policy is as critical as the adoption of the policy. To promote the enforcement of this Policy, Allegion will inform employees of this Policy and encourages employees who believe this Policy has been violated to report the suspected violations through the Company’s Ethics Helpline. No retaliatory action will be tolerated against anyone who raises concerns about possible violations of this Policy.
Related Person Transaction Policy
The Code of Conduct of Allegion plc (the “Company”) provides that all employees and directors must disclose all potential conflicts of interest and promptly take actions to eliminate a conflict when the Company so requests. The rules of the Securities and Exchange Commission (“SEC”) further require disclosure of certain transactions between the Company or any of its subsidiaries and one or more Related Persons (as defined below), and disclosure of the Company’s policies and procedures for review of such transactions.
Purpose
The Board of Directors of the Company has adopted this written policy (the “Policy”) in order to establish a procedure for the review and approval or ratification of any Related Person Transactions (as defined below).
Definitions
- “Related Person” means:
1) any person who is, or was at any time since the beginning of the Company’s last fiscal year, an Executive Officer, director, or director nominee of the Company;
2) any person who, at the time of the occurrence or existence of the transaction at issue, is the beneficial owner of more than 5% of any class of the Company’s voting securities (a “5% Shareholder”); or
3) any person who is, or was, at any time since the beginning of the Company’s last fiscal year, an Immediate Family Member of any individual covered by 1) or 2) above.
- “Executive Officer” means any individual who has been appointed an officer of the Company for purposes of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
- “Immediate Family Member” of any person means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of such person, or any other person (other than a tenant or an employee) sharing the household of such person.
- “Related Person Transaction” means any transaction, arrangement or relationship (or series of similar transactions, arrangements or relationships) that would be required to be disclosed pursuant to Item 404(a) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”), in which the Company, or any of its subsidiaries or affiliates was, is, or will be a participant, the amount involved exceeds $120,000 and in which any Related Person had, has, or will have a direct or indirect material interest, other than an employment relationship or transaction involving an Executive Officer and any related compensation . A “transaction” includes, but is not limited to, any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangement or relationships.
Policy
All Related Person Transactions, and any material amendments or modifications to a Related Person Transaction, are prohibited unless approved or ratified by the disinterested members of the Corporate Governance and Nominating Committee (the “Committee”) in accordance with this Policy. A Related Person Transaction entered into without pre-approval of the Committee shall not be deemed to violate this Policy, or be invalid or unenforceable, as long as the transaction is brought to the Committee as promptly as reasonably practicable after it is entered into. Every Related Party Transaction to which the Company or any of its subsidiaries or affiliates is a party shall be deemed to include as a condition that it be approved in accordance with this Policy. Notwithstanding the foregoing, any employment relationship or transaction involving an Executive Officer and any related compensation must be approved by the Compensation Committee of the Board or recommended by the Compensation Committee to the Board for its approval.
Upon disclosure of a Related Person Transaction to management at any time by a director (including director nominee) or Executive Officer, management shall prepare a summary of such Related Person Transaction for approval or ratification at the next scheduled meeting of the Committee. In connection with the review and approval or ratification of a Related Person Transaction, management must disclose to the Committee:
- the material terms of the Related Person Transaction, including the approximate dollar value of the amount involved in the transaction, the Related Person’s relationship to the Company and interest in the transaction;
- the identity of the other parties to the transaction;
- the material facts of the transaction;
- the benefits to the Company and to the Related Person;
- whether the value and the terms of the transaction are substantially similar as compared to those of similar transactions previously entered into by the Company with non-Related Persons, if any
- the impact on a director’s independence (for both service on the Board or any of its committees) in the event the Related Person is a director or director nominee and, if applicable, the availability of other sources of comparable products or services;
- whether the Related Person Transaction will be required to be disclosed in the Company’s applicable filings under the Securities Act or Exchange Act, and related rules; and
- any other matters that management or the Committee, as applicable, deem appropriate.
In approving or ratifying a transaction, the Committee shall consider all of the relevant facts and circumstances and shall approve only those transactions that are in, or not inconsistent with, the best interests of the Company.
If the transaction involves a Related Person who is a director or an Immediate Family Member of a director, such director may not participate in the deliberation or vote respecting such approval or ratification.
In the event that Company management determines that it is impractical or undesirable to wait until a Committee meeting to consummate a transaction with a Related Person, the Chair of the Committee may review and approve the transaction in accordance with the criteria set forth herein and shall report any such approval to the Committee at its next meeting.
No approval or ratification of a transaction under this policy shall be deemed to supersede the requirements of the Company’s Code of Conduct as applied to any Related Person.
Review
The Committee shall review this Policy from time to time and recommend changes to the Board as appropriate.
Updated and Adopted on: February 6, 2020
