Kodak 2003 Annual Report Download - page 115

Proxy Statement
115
COMPOSITION
The Corporate Responsibility and Governance Committee is composed of six directors, each of whom meets the definition of “independence” set forth in
the NYSE’s corporate governance listing standards. During 2003, the Committee met five times. The Charter of the Committee can be accessed electron-
ically in the “Corporate Governance” section of www.kodak.com/go/governance.
RESPONSIBILITIES
The Committee is responsible for: (i) overseeing the Company’s corporate governance structure; (ii) identifying, screening and recommending director
candidates to the Board; (iii) administering the Director Selection Process; (iv) developing the Company’s Director Qualification Standards; (v) overseeing
the annual evaluation of the Board and each of its committees; (vi) overseeing and reviewing the Company’s Corporate Governance Guidelines and
Director Independence Standards; (vii) assisting the Board in its determinations of director independence; (viii) recommending to the Board the compen-
sation for directors; (ix) recommending committee assignments, including committee chairs, to the full Board for approval; and (x) overseeing the
Company’s activities in the areas of environmental and social responsibility, diversity and equal employment opportunity. A complete description of the
Committee’s responsibilities can be found in its charter.
NEW LEGISLATIVE AND REGULATORY REQUIREMENTS
The Committee spent much of its time this year planning for the Company’s compliance with the Sarbanes-Oxley Act, the NYSE’s final corporate gover-
nance listing standards and the SEC’s new disclosure rules. As a result of this work, in February 2004, the Committee and the Board took a number of
actions regarding the Company’s corporate governance policies, practices and processes. These include: (i) adopting restated Corporate Governance
Guidelines; (ii) approving amendments to the charters of the Audit Committee, the Executive Compensation and Development Committee, and the
Corporate Responsibility and Governance Committee; (iii) creating new Director Independence Standards; (iv) developing Director Qualification Standards;
(v) implementing a Director Selection Process; and (vi) formulating a Director Attendance Policy. You can access the Company’s Corporate Governance
Guidelines, charters, Director Independence Standards, Director Qualification Standards, Director Selection Process and Director Attendance Policy in the
“Corporate Governance” section of www.kodak.com/go/governance.
DIVERSITY INITIATIVES
In December of 2003, the Company’s Diversity Advisory Panel met with the Board to present its final recommendations. This seven-member, blue-ribbon
panel was launched in 2001 to provide advice on the Company’s comprehensive diversity strategy and assess future diversity trends and the potential
impact on Kodak. Based on the panel’s final recommendations, the Committee recommended a number of specific measures to the full Board for adop-
tion. These measures were approved by the full Board at its February 2004 meeting. For more information regarding the Company’s Diversity Advisory
Panel and Kodak’s diversity intiatives, see the section entitled “2003 Global Diversity” on page 140.
CHIEF GOVERNANCE OFFICER
With the consent of the Committee, Laurence L. Hickey, Assistant Secretary, was named to the new position of Chief Governance Officer effective July
15, 2003. While the Company has a strong tradition of good corporate governance, this action was taken in part to heighten the awareness and impor-
tance of good corporate governance within the Company. The functions of the Chief Governance Officer include monitoring compliance with legislative
and regulatory requirements affecting corporate governance, performing ongoing assessment of the Board’s structure and governance practices, periodi-
cally auditing the Company’s compliance with its governance principles and policies, and keeping both the Board and senior management current on
corporate governance laws, trends and best practices. The position reports to both the Committee and to the Company’s Corporate Secretary.
DIRECTOR COMPENSATION
During the later part of 2003, the Committee began a review of the Board’s Director Compensation Program. To assist it in this effort, the Committee
retained an external independent compensation consultant. As a first step in this process, the Committee developed the following Director Compensation
Principles:
• Pay should represent a moderately important element of Kodak’s director value proposition.
• Pay levels should generally target near the market median, and pay mix should be consistent with market considerations.
• Pay levels should be differentiated based on the time demands on some members’ roles, and the Board will ensure regular rotation of certain of
these roles.
• The program design should ensure that rewards are tied to the successful performance of Kodak stock, and the mix of pay should allow flexibility
and board diversity.
• To the extent practical, Kodak’s director compensation principles should parallel those of the Company’s executive compensation program.
These principles will provide the foundation for developing and continuing a new Board compensation program. The Committee anticipates making a
recommendation to the Board concerning the details of the program in the first quarter of 2004.
Report of the Corporate Responsibility and Governance Committee