Principles
Governance Principles
Management Organization
1. General
Glatfelter's business is conducted by its officers, managers and
employees, under the direction of the Chief Executive Officer
("CEO") and the oversight of the Board, which is comprised of a
majority of independent directors. The Board is elected by the
Company’s shareholders and is responsible for the management of the
business and affairs of the Company. The Board shall carry out its
responsibility by establishing the strategic direction for the
Company’s business and by selecting, evaluating, advising and
monitoring executive management, and shall ensure that the long-term
interests of the Company as a whole, and its shareholders, are
served by the conduct of the business operations. The Board and
management recognize that, in addition to the shareholders, other
stakeholders in the business include employees, retirees,
contractors, customers, suppliers, government and regulatory
officials, as well as the communities in which the Company operates.
The Board and management believe that recognizing the interests of
these stakeholders is fundamental to being able to provide value to
shareholders.
2. Chairman & Chief
Executive Officer
Currently, the Chief Executive Officer also serves as Chairman of
the Board. As CEO, he presides at all meetings of the shareholders
and is responsible to the Board for the day-to-day management of the
Company. As Chairman, he proposes, with the involvement of the
Board, the agenda for the meetings of the Board over which he
presides.
3. Other Executive
Officers
The Board annually appoints executive officers of the Company at its
organizational meeting following the Annual Meeting of Shareholders
and at such other times as it may deem appropriate. A listing of the
Company’s current officers, as well as its directors, may be found
at http://www.glatfelter.com/e/invesstock.asp.
Board of Directors
1. Board Functions
The Board has five regularly scheduled meetings a year at which it
reviews and discusses reports by management on the performance of the
Company, strategic options, and other significant issues faced by the
Company. The full Board considers all major decisions affecting the
Company. Directors are expected to attend all scheduled Board and
meetings of committees of which they are members. In addition to its
general oversight of management, the Board, either directly or through
its committees, also performs a number of specific functions, including:
- selecting, evaluating and compensating the CEO, and overseeing CEO succession planning;
- overseeing the selection, evaluation and compensation of the other executive officers;
- developing and approving compensation and benefit plans for senior management and other employees;
- reviewing and approving long-term strategic business plans and major corporate actions and monitoring corporate performance against those plans and actions;
- assessing the major risks faced by the Company, and reviewing options to mitigate those risks; and
- ensuring that processes are in place for maintaining the integrity of the Company, its financial statements, internal controls, reporting systems, compliance with laws, and the integrity of its relationships with its stakeholders.
In executing these functions, directors have regular interaction with management and consult with independent advisors as necessary and appropriate. Non-management directors meet in regularly scheduled executive sessions (without management) as part of the Board of Directors’ meetings. Currently, the Chair of the Nominating and Corporate Governance Committee presides over the executive sessions. The Board has established a method for interested parties to communicate directly with the entire Board or any non-management director by calling the Company’s toll-free Helpline (800-346-1676). The entire Board conducts an annual self-evaluation to determine the effectiveness of the Board and its committees.
2. Board MembersIndependent directors, as defined by the NYSE listing standards and any applicable laws or regulations, shall constitute a majority of the Board. Generally, to meet the standard for "independence," a director must not be an employee of the Company nor have any material relationship with the Company, as affirmatively determined by the Board and disclosed in the proxy statement by the Board of Directors. The Board adopts the New York Stock Exchange definition of "independent director" as one who has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). The Board will consider all relevant facts and circumstances in assessing the materiality of a director's relationship with the Company. The Board will consider the issue both from the standpoint of the director and from that of organizations with which the director has an affiliation. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships (among others).
The Board presently consists of eight persons,
comprising two classes of directors of three directors each, and one
class of two directors. Effective at the date of the Company’s 2011
Annual Meeting of Shareholders, the Board will be declassified. The
Board’s declassification will be completed in the following manner.
Commencing with the election of Directors at the 2009 Annual Meeting of
Shareholders, the successors to those directors whose terms expire at
that meeting shall be elected to hold office for a term of one year and
the Board shall, thereafter, consist of eight persons comprising one
class of directors each serving a term of one year. The successors to
Directors whose terms expire at all subsequent Annual Meetings of
Shareholders will be elected annually to hold office for a term of one
year or until their successors have been duly elected and qualified.
Candidates to the Board are based on shareholder or director
recommendations or search mechanisms, and are identified, screened, and
recommended to the Board by the Nominating and Corporate Governance
Committee for nomination for election by the shareholders. In
recommending a nominee for director, the Nominating and Corporate
Governance Committee will consider, at a minimum, the nominee’s
independence, availability of sufficient time to serve on the Company’s
Board and the possession of such knowledge, experience, skills,
expertise, wisdom, integrity, business acumen, understanding of the
Company’s business environment and diversity so as to enhance the
Board’s ability to manage and direct the affairs and business of the
Company. When a term of a director extends beyond the date when the
director reaches 72 years of age, such director shall resign from the
Board effective at the next Annual Meeting of Shareholders following his
or her 72nd birthday. In the case of a vacancy on the Board, the Board
itself may fill that vacancy by choosing a director to serve until the
next election of the class for which such director has been chosen. The
replacement director shall serve until his or her successor has been
selected and qualified, or until his or her earlier death, resignation,
or removal.
A Director who retires or substantially changes his or her principal
position of employment must, promptly following such retirement or
change in position, tender his or her resignation to the Chair of the
Nominating and Corporate Governance Committee. The tendered resignation
must provide that, unless otherwise determined by the Board in its sole
discretion, the tendered resignation will be effective immediately upon
acceptance by the Board. The Nominating and Corporate Governance
Committee will consider the tendered resignation and make a
recommendation to the Board as to whether the Board should accept or
reject the tendered resignation. The Board will decide, in its sole
discretion, whether to accept or reject such resignation. The Board has
no policy that would prohibit the continued service on the Board of a
retiring Chief Executive Officer.
The Company does not limit the number of boards of publicly traded companies on which a director may serve. However, a director who is considering serving on the Board of Directors of another publicly traded company is expected to promptly so advise the Nominating and Corporate Governance Committee. The Committee will then consider the effect that these additional responsibilities could have on the director’s independence and performance of his/her duties as a director of the Company, and will take such action as it may deem appropriate and in the best interests of the Company. The Company does expect all directors to devote sufficient time and effort to their duties as a Glatfelter Board member. This is a factor that is considered in the annual Board self-evaluation process.
3.
Board Committees
The Board shall at all times have a committee structure that is
adequate for the conduct of the business of the Board of Directors
and required for the operation of a publicly owned company.
Currently, the Company has four standing committees, consisting of:
(a) Audit, (b) Compensation, (c) Nominating and Corporate Governance
and (d) Finance. The Board may, from time to time, create additional
committees or terminate existing ones, if required. Committees
support the role of the Board on issues that benefit from
consideration by a smaller, more focused group of directors. The
committees, whose chairpersons are appointed by the Board, shall
have regularly scheduled meetings, and call additional meetings as
appropriate. A management representative is assigned to each
committee for purposes of planning meeting agendas and coordinating
communications between management and the committee. The office of
the Corporate Secretary is responsible for providing notice of the
committee meetings and sending documents provided by the management
representative(s) in advance of the meeting, as well as taking
minutes of the committee meetings. The committee chairpersons
routinely report on their committee activities to the Board at the
next regular Board meeting following a committee meeting.
The purposes of each committee are defined in the Company’s
By-Laws
and in their respective charters. A summary of the roles of each
committee is listed below. The committee charters and more
information about the current composition of each committee are
accessible by following the hyperlinks provided.
View the
committee details and charters along with more information about the
current composition of each committee.
4. Compensation of
Directors
The Company's annual proxy statement contains complete information
about director compensation, which may vary based on factors such as
committee service and number of meetings attended. To align each of
director’s interests with those of the shareholders, each director
is encouraged to own stock in the Company. Thus, the Company pays
two-thirds (2/3) of the director’s annual retainer in stock in lieu
of cash.
5. Majority-Vote
Policy
Commencing at the 2008 Annual Meeting, in an uncontested election,
if a nominee for director who is an incumbent director receives at
any meeting for the election of directors at which a quorum is
present a greater number of votes “withheld” from his or her
election than votes “for” such election (a “Majority Withheld
Vote”), and no successor has been elected at such meeting, the
Director shall promptly tender his or her resignation following
certification of the shareholder vote. In an uncontested election,
if a nominee for director who is not an incumbent director receives
at any meeting for the election of directors at which a quorum is
present a Majority Withheld Vote (but does receive the requisite
plurality vote), the nominee will be deemed to have been elected to
the Board and to have immediately resigned.
To be eligible to stand for election, each person who agrees to be
nominated must also execute a written statement setting forth that
such person agrees to be bound by this provision. The Nominating and
Corporate Governance Committee shall consider the tendered
resignation and make a recommendation to the Board as to whether or
not to accept it. The Board will act on the Nominating and Corporate
Governance Committee’s recommendation within 90 days following
certification of the shareholder vote. In making their
determinations, the Nominating and Corporate Governance Committee
and the Board may consider any factors or other information that
they consider appropriate or relevant. Thereafter, the Board will
promptly disclose its decision whether or not to accept the
Director’s resignation (and the reasons for rejecting the
resignation, if applicable) in a press release or filing with the
Securities and Exchange Commission. Any director who tenders his or
her resignation pursuant to this provision shall not participate in
the Nominating and Corporate Governance Committee’s recommendation
or Board action regarding whether or not to accept the resignation.
However, if each member of the Nominating and Corporate Governance
Committee received a Majority Withheld Vote at the same meeting,
then the remaining independent directors who did not receive a
Majority Withheld Vote shall consider the resignations and determine
whether or not to accept them. If the Directors who did not receive
a Majority Withheld Vote in the same election constitute three or
fewer directors, all directors may participate in the action
regarding whether to accept the resignations, provided, however,
that each director’s resignation will be acted upon separately and
no director may participate in the Board action regarding whether or
not to accept his or her resignation. A director whose resignation
is not accepted by the Board shall continue to serve until the next
annual meeting at which he or she is up for election and until his
or her successor is duly elected, or until his or her earlier
resignation or removal. If a director’s resignation is accepted by
the Board, or if a nominee for director who is not an incumbent
director is deemed to have been elected and to have immediately
resigned, then the Board, in its sole discretion, may fill any
resulting vacancy pursuant to Section 2.3 of Article II of the
Company’s By-Laws or may amend the Company’s
By-Laws to decrease the
size of the Board. The Nominating and Corporate Governance Committee
shall make a recommendation to the Board as to whether or not it
should fill the vacancy or amend the Company’s
By-Laws to reduce the
size of Board.
6. Ratification of
Independent Auditors
The Board will submit the Audit Committee’s appointment of the
independent registered public accounting firm to the Company’s
shareholders for ratification at the Annual Meeting of Shareholders
each year. If the shareholders fail to ratify the Audit Committee’s
selection, the Audit Committee will reconsider its selection of the
independent registered public accounting firm at such time and in
such manner as the Audit Committee may determine in its sole
discretion. The Audit Committee may in its discretion appoint a
different independent registered public accounting firm at any time
during the year if the Audit Committee determines that a change is
in the best interests of the Company.
7. Conduct and Ethics
Standards for Directors
Directors are subject to the applicable provisions set forth in the
Company's publication,
Integrity - Our Code of Business Conduct
(963 KB PDF). Directors
fulfill their duties in a manner that avoids actual, potential or
perceived conflicts of interest and that protects the Company’s
reputation for honesty and integrity. Except as authorized by the
Board, no non-management director shall have a direct economic
relationship with the Company other than ownership of shares of the
Company’s Common Stock or options to purchase such shares. Both
Company loans to the directors or their family members, and
guarantees of obligations of the directors or their family members
are prohibited.
Directors owe a duty to advance the Company’s interests and are,
therefore, prohibited from taking a business opportunity that is
discovered through the use of Company property, information, or
position, for their personal benefit. Directors shall meet at least
annually with the Company’s General Counsel or Director of
Compliance in order to review compliance standards that apply to the
Company generally and to themselves specifically as directors. Any
reports of violations of the Company’s Code of Business Conduct may
be reported through the Integrity Helpline (800-346-1676), to the
Vice President, General Counsel and Secretary, the Director of
Compliance, or to the Audit Committee Chairperson. Retaliation is
prohibited for complaints made or concerns raised through these
channels.
The Company’s General Counsel or Director of Compliance shall
provide an annual compliance report to the full Board, as well as to
the Audit Committee.
Code of Business Ethics for CEO and Senior Financial Officers of
Glatfelter
Approved by the Board of Directors on December 17, 2003
Affirmed by the Board of Directors on December 15, 2004
Amended by the Board of Directors on December 14, 2005
Amended by the Board of Directors on March 8, 2006
Amended by the Board of Directors on March 5, 2008
Amended by the Board on February 18, 2009
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