Allstate 2015 Annual Report Download - page 74

STOCKHOLDER PROPOSALS
68 www.allstate.com
BOARD OF DIRECTORS’ STATEMENT IN OPPOSITION TO THE
STOCKHOLDER PROPOSAL ON INDEPENDENT BOARD CHAIRMAN
The Board recommends that stockholders vote AGAINST this proposal for the following reasons:
The Board separated the Chairman and CEO roles in the past during a time of leadership
transition and should have the flexibility to either separate or combine the roles based on
Allstate’s needs at that time.
• Allstate’s Corporate Governance Guidelines
provide the Board with the flexibility to assign
the Chairman responsibilities to best meet
Allstate’s needs at any particular time. The
interests of Allstate and its stockholders are
best served when leadership choices are made
by the Board on a case-by-case basis and not
pursuant to a predetermined and static policy. The
Board believes such flexibility helps it adapt the
leadership structure to changing circumstances.
• The Board split the roles of Chairman and CEO
in 2007 during a leadership transition. In January
2007, Thomas Wilson replaced Edward Liddy as
CEO, and the Board determined that Mr. Liddy
should remain Chairman until his retirement in
2008. During this transition period, both Mr. Liddy
and Mr. Wilson attended Board and committee
meetings to provide historical context and a
seamless transition.
• The Board regularly examines the leadership
structure of Allstate and has determined that, at this
time, Allstate is well-served by having the Chairman
role performed by Mr. Wilson. This structure provides
unified leadership and direction for management to
execute Allstate’s strategy and business plans and
enhances the transparency between management
and the Board.
• Allstate’s Board has a history of strong corporate
governance. 10 of 11 of Allstate’s current
directors are independent of management, and
the directors take proactive steps to ensure
independence in the boardroom as executive
sessions of the independent directors are held at
every meeting.
• According to a survey by a major executive search
firm in 2015, only 4% of S&P 500 companies require
the separation of the roles.
Allstate’s lead director already provides meaningful independent leadership of the Board.
• Allstate’s independent lead director provides
meaningful independent oversight over
management. Allstate’s lead director role was
enhanced in 2011 when the role shifted from one that
rotated among the independent directors to a single
designated lead director.
• Our lead director has well-defined and substantive
responsibilities that are consistent with the
quotations from the reports cited by the
proponent. Our lead director:
• works with the Chairman in developing Board
meeting agendas, schedules, and information
provided to the Board;
• facilitates and communicates the Board’s
performance evaluation of the CEO, in
conjunction with the chair of the compensation
and succession committee;
• facilitates the evaluation of the Board and
director performance;
• serves as a liaison between the Chairman and
the independent directors when necessary
to provide a supplemental channel of
communication;
• presides at all Board meetings at which the
Chairman is not present and at all executive
sessions; and
• communicates with significant stockholders on
matters involving broad corporate policies and
practices, when appropriate.