Energy Transfer 2012 Annual Report Download - page 119

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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Board of Directors
Our General Partner manages and directs all of our activities. The activities of our General Partner are managed and directed by
its general partner, ETP LLC. Our officers and directors are officers and directors of ETP LLC. ETE, as the sole member of ETP
LLC, is entitled under the limited liability company agreement of ETP LLC to appoint all of the directors of ETP LLC. This
agreement provides that the Board of Directors of ETP LLC shall consist of not more than 13 persons, at least three of whom are
required to qualify as independent directors. Our six current directors include ETP LLC’s Chief Executive Officer and ETP LLC’s
President and Chief Operating Officer.
As of December 31, 2012, our Board of Directors was comprised of six persons, four of whom qualified as “independent” under
the NYSE’s corporate governance standards. We have determined that Messrs. Byrne, Collins, Glaske, and Grimm all meet the
NYSE’s independence requirements.
As a limited partnership, we are not required by the rules of the NYSE to seek unitholder approval for the election of any of our
directors. We believe that ETE has appointed as directors individuals with experience, skills and qualifications relevant to the
business of the Partnership, such as experience in energy or related industries or with financial markets, expertise in natural gas
operations or finance, and a history of service in senior leadership positions. We do not have a formal process for identifying
director nominees, nor do we have a formal policy regarding consideration of diversity in identifying director nominees, but we
believe ETE has endeavored to assemble a group of individuals with the qualities and attributes required to provide effective
oversight of the Partnership.
Board Leadership Structure. We have no policy requiring either that the positions of the Chairman of the Board and the Chief
Executive Officer, or CEO, be separate or that they be occupied by the same individual. The Board of Directors believes that this
issue is properly addressed as part of the succession planning process and that a determination on this subject should be made
when it elects a new chief executive officer or at such other times as when consideration of the matter is warranted by circumstances.
Currently, the Board of Directors believes that the CEO is best situated to serve as Chairman because he is the director most
familiar with the Partnership’s business and industry, and most capable of effectively identifying strategic priorities and leading
the discussion and execution of strategy. Independent directors and management have different perspectives and roles in strategy
development. Our independent directors bring experience, oversight and expertise from outside the Partnership and from a variety
of industries, while the CEO brings extensive experience and expertise related to the Partnership’s business. The Board of Directors
believes that the current combined role of Chairman and CEO promotes strategy development and execution, and facilitates
information flow between management and the Board of Directors, which are essential to effective governance.
One of the key responsibilities of the Board of Directors is to develop strategic direction and hold management accountable for
the execution of strategy once it is developed. The Board of Directors believes the current combined role of Chairman and CEO,
together with a majority of independent board members, is in the best interest of Unitholders because it provides the appropriate
balance between strategy development and independent oversight of management.
Risk Oversight. Our Board of Directors generally administers its risk oversight function through the board as a whole. Our CEO,
who reports to the Board of Directors, and the other executive officers, who report to our CEO, have day-to-day risk management
responsibilities. Each of these executives attends the meetings of our Board of Directors, where the Board of Directors routinely
receives reports on our financial results, the status of our operations, and other aspects of implementation of our business strategy,
with ample opportunity for specific inquiries of management. In addition, at each regular meeting of the Board, management
provides a report of the Partnership’s financial and operational performance, which often prompts questions or feedback from the
Board of Directors. The Audit Committee provides additional risk oversight through its quarterly meetings, where it receives a
report from the Partnership’s internal auditor, who reports directly to the Audit Committee, and reviews the Partnership’s
contingencies with management and our independent auditors.
Corporate Governance
The Board of Directors has adopted both a Code of Business Conduct and Ethics applicable to our directors, officers and employees,
and Corporate Governance Guidelines for directors and the Board. Current copies of our Code of Business Conduct and Ethics,
Corporate Governance Guidelines and charters of the Audit and Compensation Committees of our Board of Directors are available
on our website at www.energytransfer.com and will be provided in print form to any Unitholder requesting such information.
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