Kodak 2005 Annual Report Download - page 196

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REPORT OF THE CORPORATE RESPONSIBILITY AND
GOVERNANCE COMMITTEE
Introduction
While the Company has long practiced and lead in developing and implementing good corporate governance, continuing this tradition is essential to
the Company’s future as it undergoes its digital transformation. The Corporate Responsibility and Governance Committee of the Board of Directors is
primarily responsible for overseeing the Company’s governance practices and, therefore, is playing a key role in this journey. This Report, an annual
voluntary governance practice that the Committee began in 2003, highlights the Committee’s corporate governance activities during 2005.
Committee Composition
The Committee is composed of fi ve directors, each of whom meets the defi nition of “independence” set forth in the NYSE’s corporate governance
listing standards. During 2005, the Committee met seven times and routinely reported its activities to the full Board. In addition, senior management
met with the Committee’s Chair on six occasions last year. The Committee acts pursuant to a written charter, which can be accessed electronically in
the “Corporate Governance” section at www.kodak.com/go/governance.
Committee Responsibilities
The primary role of the Committee is to assess the independence of Board members; lead the annual evaluation of the Board and its committees;
identify and assess candidates for Board membership; oversee the Company’s activities in the areas of environmental and social responsibility,
charitable contributions, diversity and equal employment opportunity; and generally oversee the Company’s corporate governance structure. The
Committee monitors emerging issues and practices in the area of corporate governance, and pursues those initiatives that it believes will enhance
the Company’s governance practices and policies. In addition, the Committee is responsible for, among other things: 1) administering the Board’s
Director Selection Process; 2) developing the Board’s Director Qualifi cation Standards; 3) implementing the Board’s director orientation and education
programs; 4) overseeing and reviewing the Company’s Corporate Governance Guidelines and Director Independence Standards; and 5) recommending
to the Board the compensation for directors. A complete description of the Committee’s responsibilities can be found in its charter.
2005 Governance Initiatives
Over the past year, the Board, under the guidance of the Committee, has continued to refi ne and improve the Company’s corporate governance.
Described below are some of the signifi cant governance actions that the Committee initiated in 2005.
Board Declassifi cation
Based on the Committee’s recommendation, the Board in last year’s proxy statement submitted for your approval a management proposal that
all Board members be elected annually. You approved this proposal by a substantial majority and, as a result, the Company amended its Restated
Certifi cate of Incorporation to eliminate the classifi ed system resulting in all board members being elected to one-year terms beginning in 2008. In
formulating its recommendation to the Board, the Committee undertook an extensive review of the Board’s structure and sought the advice of external
corporate governance experts. The Committee was persuaded by your belief that a non-classifi ed Board increases the Board’s accountability to you
and your growing sentiment in favor of annual elections.
Elimination of Super-Majority Voting Provisions
Last year, the Committee also considered the merits of the super-majority voting provisions contained in the Company’s Restated Certifi cate of
Incorporation. The Committee concluded that the elimination of these provisions was in keeping with the Board’s commitment to continually increase
the Company’s corporate governance practices and enhance the Board’s accountability to you. Based on the Committee’s recommendation, the Board
submitted a proposal in last year’s proxy statement to amend the Company’s Restated Certifi cate of Incorporation to eliminate its super-majority voting
provisions. You approved this proposal by a substantial majority. In light of this, the Company promptly amended its Restated Certifi cate of
Incorporation to eliminate these provisions.
Director Search
The Committee spent a considerable amount of its time last year initiating the search to fi ll the Board vacancies that will occur over the next year
due to the retirement of two directors under the Board’s mandatory retirement policy. As required under the Board’s Director Selection Process, the
Committee began this process by assessing the Board’s current and projected strengths and needs. Based on this assessment, it developed a target
candidate profi le for the positions. Also in accordance with the Board’s selection process, the Committee engaged an external executive search fi rm
to assist in identifying qualifi ed independent candidates who meet the target candidate profi le and fi t the Board’s Director Qualifi cation Standards.
Based on the list of candidates produced, the Committee prepared a list of preferred candidates that it presented to the full Board for input. The
Committee is about to begin the process of interviewing the preferred candidates and expects to shortly recommend several candidates to the full
Board for its consideration.