HR Block 2005 Annual Report Download - page 37

Director Independence Standards and the New York Stock background, analytical ability and willingness to devote adequate
Exchange listing standards. time to Board duties. The Board evaluates each individual in the
The New York Stock Exchange listing standards provide that a context of the Board as a whole with the objective of retaining a
director does not qualify as independent unless the Board group with diverse and relevant experience that can best
affirmatively determines that the director has no material perpetuate the Company’s success and represent shareholder
relationship with the Company. The listing standards permit the interests through sound judgment.
Board to adopt and disclose standards to assist the Board in The Governance and Nominating Committee may seek the input
making determinations of independence. Accordingly, the Board of the other members of the Board and management in identifying
has adopted Director Independence Standards (attached as candidates who are consistent with the criteria outlined above. In
Appendix A to this proxy statement) to assist the Board in addition, the Governance and Nominating Committee may use the
determining whether a director has a material relationship with services of consultants or a search firm. The Committee will
the Company. consider recommendations by the Company’s shareholders of
In June 2005, the Board conducted an evaluation of director qualified director candidates for possible nomination by the Board.
independence, based on the Director Independence Standards Shareholders may recommend qualified director candidates by
and the New York Stock Exchange listing standards. In writing to the Company’s Corporate Secretary, at our offices at
connection with this review, the Board evaluated commercial, 4400 Main Street, Kansas City, Missouri 64111. Submissions should
charitable, consulting, familial and other relationships with each include information regarding a candidate’s background,
director or immediate family members and their related interest qualifications, experience, and willingness to serve as a director.
to the Company and its subsidiaries. As a result of this evaluation, Based on preliminary assessment of a candidate’s qualifications, the
the Board affirmatively determined that Ms. Ecton and Governance and Nominating Committee may conduct interviews
Messrs. Baum, Frigon, Hale, Lewis, Seip, Smith and Wilkins are with the candidate and request additional information from the
independent directors. candidate. The Committee uses the same process for evaluating all
Further, all directors, officers and employees of the Company nominees, including those recommended by shareholders. In
must act ethically and in accordance with the policies comprising addition, the Company’s bylaws contain specific conditions under
the H&R Block Code of Business Ethics and Conduct (the which persons may be nominated directly by shareholders. The
‘‘Code’’). The Code includes guidelines relating to the ethical provisions include the condition that shareholders comply with the
handling of actual or potential conflicts of interest, compliance advance notice time requirements outlined in the ‘‘Shareholder
with laws, accurate financial reporting and procedures for Proposals and Nominations’’ section of this Proxy Statement.
promoting compliance with, and reporting violations of, the SHAREHOLDER COMMUNICATIONS WITH THE BOARD ⬎⬎⬎
Code. The Company intends to post any amendments to or Shareholders wishing to communicate with the Board of
waivers of the Code (to the extent applicable to the Company’s Directors, the non-management directors, or with an individual
Chief Executive Officer, Chief Financial Officer or Principal Board member concerning the Company may do so by writing to
Accounting Officer) on our website. the Board, to the non-management directors, or to the particular
DIRECTOR NOMINATION PROCESS ⬎⬎⬎ The entire Board of Board member, and mailing to the correspondence to: Office of
Directors is responsible for nominating members for election to the Chief Legal Officer, H&R Block, Inc., 4400 Main Street,
the Board and for filling vacancies on the Board that may occur Kansas City, Missouri 64111. The envelope should indicate that
between annual meetings of the shareholders. The Governance it contains a shareholder communication. All such shareholder
and Nominating Committee is responsible for identifying, communications will be forwarded to the director or directors to
screening and recommending candidates to the entire Board for whom the communication is addressed.
Board membership. The Governance and Nominating Committee DIRECTOR ATTENDANCE AT ANNUAL MEETINGS ⬎⬎⬎
works with the Board to determine the appropriate Although the Company has no specific policy regarding director
characteristics, skills and experience for the Board as a whole attendance at its annual meeting, all directors are encouraged to
and its individual members. In evaluating the suitability of attend. Board and Committee meetings are held immediately
individual Board members, the Board takes into account many preceding and following the annual meeting, with directors
factors such as general understanding of various business attending the annual meeting. All of the Company’s directors
disciplines (e.g., marketing, finance, information technology), the attended last year’s annual meeting.
Company’s business environment, educational and professional
H&R BLOCK 2005 Proxy Statement
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