LeapFrog 2011 Annual Report Download - page 132

these parties in their capacities as advisors to or leaders of LeapFrog, and how we plan to address
them. In addition, such reviews include evaluating the effectiveness of our risk management
processes and how to improve them if and when necessary.
• Our internal audit department and any internal audit consulting firm reports directly to the audit
committee of the board on the adequacy and effectiveness of our system of internal control and risk
management systems. The audit committee guides management and board of directors decisions
concerning financial and operational matters based on the reports regarding risk management
priorities. This information is delivered to the audit committee during the regular portion of the
meeting and in a separate discussion among our audit committee members, internal audit
representatives and external auditors during executive sessions of the audit committee.
• Our compensation committee reviews our compensation programs with our management and
external compensation consultants, and, in approving such programs, considers whether and to what
extent they have a potential to encourage excessive risk taking by our employees, including our
executives. In addition, the committee monitors these programs to evaluate on a regular basis
whether the programs provide an appropriate balance of incentives and do not encourage employees
to take unreasonable risks.
• Our nominating and corporate governance committee monitors the effectiveness of our corporate
governance guidelines. The committee also helps ensure that we are prepared to deal with risks and
crises by evaluating the individual capabilities of the directors, nominating directors with risk
management experience, committee structure and composition and considering the time each director
and nominee has to devote to the company. The committee also works with our management to
establish orientation programs for new directors and evaluates the effectiveness of our board of
directors and its committees.
COMMITTEES OF THE BOARD
In 2011, our board of directors had three standing committees: an audit committee, a compensation
committee and a nominating and corporate governance committee. The following table provides membership
and meeting information for each of the board committees in 2011:
Member of our board of directors in 2011 Audit Compensation
Nominating and
Corporate
Governance
Paul T. Marinelli ..................... X
Stanley E. Maron .................... X X X
E. Stanton McKee, Jr. ................. X* X
David C. Nagel ...................... X*
Philip B. Simon ..................... X
Caden C. Wang ...................... X X
(1)
X*
Total meetings in fiscal 2011
(2)
........... 7 11 4
* Committee chair in 2011
(1) Mr. Wang served on our Compensation Committee until July 27, 2011.
(2) The board of directors and the compensation committee had one combined meeting during 2011.
Compensation committee meeting totals do not include meetings of a performance compensation award
subcommittee of the compensation committee (described in more detail below under ‘‘Compensation
Committee,’’) whether they were held concurrently with a compensation committee meeting or separately.
Below is a description of each committee of the board of directors. Each of the committees has authority
to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities.
The board of directors concluded that each of the board members serving on a committee was ‘‘independent’’
as defined in the NYSE listing standards, with the exception of Messrs. Simon and Marinelli. The committees
to which Messrs. Simon and Marinelli were appointed (compensation committee and nominating and
corporate governance committee, respectively) are not required to be composed entirely of independent
26