Kodak 2006 Annual Report Download - page 184

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REPORT OF THE CORPORATE RESPONSIBILITY AND
GOVERNANCE COMMITTEE
Introduction
While the Company has long practiced and led in developing and implementing good corporate governance, continuing this tradition is essential as the
Company undergoes the fi nal stages of 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 during this transition.
The Governance Committee continually considers ways to improve the Company’s corporate governance practices. In this regard, the Governance
Committee periodically reviews the Board’s governance practices to ensure that they are aligned with best practices, the Board’s corporate gover-
nance documents and applicable statutory and regulatory requirements. The Governance Committee’s most recent review has resulted in certain
governance enhancements, including the adoption of a majority voting policy for the election of directors and changes to the Board’s Governance
Guidelines, including an amendment requiring that a substantial majority of the Board be independent. This Report, an annual voluntary governance
practice that the Governance Committee began in 2003, highlights these changes and the Governance Committee’s other corporate governance activi-
ties during 2006.
Governance Committee Composition
The Governance Committee is composed of four directors, each of whom meets the defi nition of “independence” set forth in the NYSE’s corporate
governance listing standards. During 2006, the Governance Committee met eight times and routinely reported its activities to the full Board. The Gov-
ernance Committee acts pursuant to a written charter, which can be accessed electronically in the “Corporate Governance” section at www.kodak.
com/go/governance.
Governance Committee Responsibilities
The primary role of the Governance 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 Governance 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 Governance 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 Governance Committee’s responsibilities
can be found in its charter.
2006 Governance Initiatives
Described below are some of the signifi cant governance actions that the Governance Committee undertook in 2006.
Majority Voting Policy
The Governance Committee continually seeks ways to improve the Board’s accountability and effectiveness. Earlier this year, the Board adopted,
based on the Governance Committee’s recommendation, a majority voting policy for the election of directors. While the Board would have preferred to
implement a majority voting standard via an amendment to the Company’s bylaws, New Jersey law, the law under which the Company is incorporated,
presently does not permit this. The Board believes, however, that its policy, in conjunction with the other practices described elsewhere in the Proxy
Statement, will ensure the integrity of the director election process by providing the Company’s shareholders with a meaningful voice in director elec-
tions, thereby increasing the Board’s accountability to its shareholders.
Under the policy, in an uncontested election, any nominee for director who receives a greater number of votes “withheld” from his or her election than
votes “for” such election will tender his or her resignation within 10 days following the date of the certifi cation of the shareholder vote. The Gover-
nance Committee will then consider the resignation offer and recommend to the Board whether to accept it. The Governance Committee, in making its
recommendation to the Board, and the Board, in reaching its decision, may consider those factors it considers important, including any stated reasons
why shareholders “withheld” votes for the election of the director, the director’s qualifi cations, the director’s past and expected future contributions
to the Company, the overall composition of the Board and whether accepting the resignation would cause the Company to fail to meet any applicable
rule, such as the NYSE’s Listing Requirements. The Board will act on the Governance Committee’s recommendation and publicly disclose its deci-
sion whether to accept the director’s resignation offer within 90 days following certifi cation of the shareholder vote. Any director who tenders his or
her resignation under the policy will not participate in the Governance Committee recommendation or Board action regarding whether to accept the
resignation offer. The full text of the policy is posted on our corporate governance website at www.kodak.com/go/governance.