The Xerox Board of Directors represents the interests of our shareholders in the successful operation of the company. The Board also oversees the management of Xerox to ensure the vitality of the company for our customers, employees and the other individuals and organizations that depend on us. The Board is accountable for ensuring that Xerox executes its responsibilities in a legal and ethical manner in any business environment.
Oversight of our commitment to global citizenship rests with the Corporate Governance Committee of the Xerox Board of Directors. The Committee reviews significant shareholder-relations issues and environmental and corporate social responsibility (CSR) matters, and ensures that our actions align with our core values and priorities for citizenship. To that end, members of the Board have reviewed a detailed outline of this report and support its content.
In 2015, Xerox strengthened its governance model by formalizing operation of a CSR Steering Committee and a CSR Council. The Steering Committee is ultimately accountable to the Board.
The Steering Committee, which includes three Corporate Officers reporting directly to the CEO, sets corporate priorities, defines strategy and provides direction to the CSR Council. The CSR Council is composed of senior executives with responsibility and subject matter expertise in CSR elements, such as environment, labor and supply chain. Each member of the CSR Council leads a working group that is cross-organizational and cross-functional. The CSR Council’s charter ensures consistent responsibilities and coordination across workgroups. Meeting cadence for both the CSR Council and the CSR Steering Committee is established at the start of each new year.
Read more about Corporate Governance at www.xerox.com/governance.
Based on standards for independence developed by the New York Stock Exchange, the Xerox Board is currently approximately 87.5 percent independent. It includes one non-independent director: Xerox Chairman and CEO, Ursula M. Burns.
The Board appoints one of the independent directors to serve as the lead independent director whose responsibilities include: presiding at executive sessions of the independent directors; calling special meetings of the independent directors as needed; addressing individual Board member performance matters as needed; and serving as a liaison on Board-wide issues between the independent directors and the Chief Executive Officer as needed.
Criteria for Membership
The Corporate Governance Committee of the Xerox Board considers candidates for Board membership recommended by Board members, management, shareholders and others. The Corporate Governance Guidelines require that a substantial majority of the Board should consist of independent directors, and that management representation on the Board should be limited to senior company management.
Although no specific minimum qualifications must be met by prospective candidates, the Corporate Governance Committee applies criteria set forth in our Corporate Governance Guidelines. The criteria include, among other things, the candidate’s broad perspective, integrity, independence of judgment, experience, expertise, diversity, ability to make independent analytical inquiries, understanding of the company’s business environment and willingness to devote adequate time and effort to Board responsibilities. Nominees should bring a variety of business backgrounds, experiences and perspectives to the Board. The Corporate Governance Committee does not assign specific weights to particular criteria, and no particular criterion is necessarily applicable to all prospective nominees.
Each director stands for re-election every year at the company’s annual shareholder meeting. In an uncontested election, each director is elected by the affirmative vote of a majority of the total votes cast for the director. Any incumbent nominee who receives a greater number of “votes against” than “for” his or her election is required to submit his or her resignation promptly. The remaining independent directors then evaluate relevant facts and circumstances and determine whether to accept or reject the resignation. Following the official results of the election, the Board is required to promptly disclose, in a filing with the Securities and Exchange Commission (SEC), its decision and the reasons for the decision.
Requirement for Ownership of Shares
All non-employee directors are expected to establish a meaningful equity ownership interest in the company. This equity ownership interest is achieved by paying each director’s annual equity retainer in Deferred Stock Units (DSUs). By serving on the Board of Directors for a period of approximately two years, a director would hold DSUs equivalent in value (as of date of grant) to at least three times a director’s current annual cash retainer. The longer a director serves on the Board and is paid an equity retainer in the form of DSUs, the larger his/her equity ownership interest in the Company becomes because, by their vesting terms, all DSUs are required to be held by directors until a year after leaving the Board.
Access to Management, Employees and Advisors
Board members have complete access to the company’s senior management and other employees and, at the company’s expense, are authorized to obtain advice and assistance from outside professional advisors of their choosing.
Interaction with Stakeholders
Board members are expected to attend the company’s annual meeting of shareholders and be available to speak with Xerox stakeholders. To communicate with the non-management directors, you may directly contact the Chairman of the Xerox Corporate Governance Committee at the “Contact the Board” link at www.xerox.com/governance.
Executive Sessions of Outside Directors
Each regularly scheduled Board meeting includes an executive session of only the independent directors.
Xerox has four standing committees: Audit, Compensation, Corporate Governance and Finance. Each is composed entirely of independent directors.
The purpose of the Audit Committee is to assist in Board oversight of the following:
- Integrity of the company’s financial statements
- Compliance with legal and regulatory requirements
- Company’s risk assessment policies and practices, including the Enterprise Risk Management (ERM) process, and preview the ERM assessment and process for subsequent review by the Board
- Independent auditors’ qualifications and independence
- Performance of our independent auditors and internal audit function
- Code of Business Conduct and ethics
- Preparation of the Audit Committee report to be included in our annual proxy statement
The Compensation Committee performs these duties:
- Discharges the responsibilities of the Board relating to compensation of the company’s officers
- Oversees the evaluation of the Chief Executive Officer and other executive officers
- Sets the compensation of, and reviews and approves performance goals and objectives for, the Chief Executive Officer and other executive officers
- Oversees the development and administration of the company’s executive compensation plans
- Prepares a Compensation Committee report required by the applicable SEC rules
- Consults with the Chief Executive Officer and advises the Board with respect to senior management succession planning
- Exercises the sole authority to retain and terminate the consulting firms engaged to assist the Committee in the evaluation of the compensation of the CEO and senior management
- Oversees the work of the compensation consultants and determines the compensation to be paid to any such consultants
- Assesses the independence of any compensation consultants
- Reviews and approves employment, severance, change-in-control, termination and retirement arrangements for executive officers
The Corporate Governance Committee performs these functions:
- Identifies individuals qualified to become Board members
- Recommends to the Board individuals to serve as directors of the company and on committees of the Board
- Advises the Board with respect to Board composition, procedures and committees
- Develops, recommends to the Board and annually reviews a set of corporate governance principles applicable to the company and reviews significant environmental and corporate social responsibility matters and significant shareholder relations issues
- Evaluates and makes recommendations to the Board with respect to the compensation of directors
- Oversees the annual evaluation of the Board and committees
- Administers the company’s related Person Transactions Policy
Finally, the Finance Committee is responsible for reviewing the following:
- The company’s cash position, capital structure and strategies, financing strategies and insurance coverage, and dividend policy
- The adequacy of funding of the company’s funded retirement plans and welfare benefit plans
- The company’s policy on derivatives, including an annual review as to whether the company and its subsidiaries shall enter into swap and security-based swap transactions that are not cleared with a Commodity Exchange Act registered clearing organization
The purpose and responsibilities for each of these committees are outlined in committee charters adopted by the Board, at www.xerox.com/governance .