LeapFrog 2012 Annual Report Download - page 108

enables him to effectively consult with senior management and members of the board of directors to facilitate
regular, open and direct communication between directors and our management.
Thomas J. Kalinske, who served as our chief executive officer from September 1997 to March 2002 and
again from February 2004 to July 2006, serves as the Vice Chairman of the Board. Although the role of
Vice Chairman has no defined duties in our corporate governance documents, Mr. Kalinske’s vast experience
and contacts in the industry enable him to be an effective representative of the Company.
Board Meetings and Executive Sessions
During the fiscal year ended December 31, 2012, the board of directors held 12 meetings. Each of our
incumbent directors attended at least 75% of the aggregate number of meetings of the board of directors, and
of the committees on which the director served that were held during the portion of the last fiscal year in
which he was a director or committee member, except for Dr. Mitchell. Dr. Mitchell was on sabbatical during
the latter part of 2012 and was unable to attend some of the meetings of the board of directors during that
time. Board members are expected to regularly attend all meetings of the board of directors and committees
on which they serve. Directors are also invited to attend the Company’s annual meeting of stockholders, but
attendance is not mandatory. In 2012, only Mr. Chiasson attended the annual meeting of stockholders.
Our Chairman presides over all executive sessions of the board of directors. Since our Chairman is not
an independent director under NYSE standards, for all independent executive sessions (meetings of the
non-management directors who are also independent directors) of the board of directors, or if our Chairman is
otherwise absent from an executive session of the board of directors, the remaining directors select a
temporary chairman to lead the meeting. For executive sessions of committees, the chair of the committee
presides over all executive sessions of his committee. If a committee chair is absent for a committee executive
session, the remaining committee members determine as a group the presiding director for executive sessions
on a case-by-case basis.
Role of Board in Risk Oversight
One of the key functions of our board of directors is informed oversight of our risk management. The
Company has built internal processes and a strong internal control environment which facilitate not only the
identification and management of risks, but also regular communication with and oversight by the board of
directors in this regard.
The Company’s internal audit function oversees an enterprise risk management program and the
Company maintains a Compliance Committee consisting of the chief financial officer, the general counsel, the
vice president of human resources and the director of internal audit. The Compliance Committee reports
directly to the chair of the audit committee. In addition, the Company has regular internal management
disclosure committee meetings, maintains a Code of Business Conduct and Ethics, product quality standards
and processes and a variety of other policies and procedures designed to control and minimize risk.
Management communicates routinely with the board of directors, board committees and individual directors
on the significant risks identified and how they are being managed. Directors are free to, and often do,
communicate directly with senior management on these and other risk-related topics.
The board of directors implements its risk oversight function both as a whole and through delegation to
board committees, which meet regularly and report back to the full board. All committees play significant
roles in carrying out the risk oversight function. The board and its committees’ risk oversight function
includes the following:
• The board of directors monitors and evaluates the effectiveness of the Company’s internal controls
and the enterprise risk management program at least annually and the audit committee does so at
least quarterly. At audit committee meetings, the committee reviews our risk management policies
and processes and material risk exposures in depth, including financial risk exposures facing our
business, in addition to monitoring our compliance with legal and regulatory requirements. Audit
committee meetings generally include extensive discussion between the committee members and our
internal and external auditors, legal advisors and operational leads regarding the material risks
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