Pizza Hut 2011 Annual Report Download - page 24

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GOVERNANCE OF THE COMPANY
The business and affairs of YUM are managed under the direction of the Board of Directors. The
Board believes that good corporate governance is a critical factor in achieving business success and in
fulfilling the Board’s responsibilities to shareholders. The Board believes that its practices align
management and shareholder interests. Highlights of our corporate governance practices are described
below.
What is the composition of the Board of Directors and how often are members elected?
Our Board of Directors presently consists of 13 directors whose terms expire at this Annual Meeting.
Robert Holland and Kenneth Langone will be retiring and are not standing for re-election at the Annual
Meeting.
As discussed in more detail later in this section, the Board has determined that 11 of the 13 current
directors and nine of the 11 continuing directors are independent under the rules of the New York Stock
Exchange (‘‘NYSE’’).
How often did the Board meet in fiscal 2011?
The Board of Directors met six times during fiscal 2011. Each director attended at least 75% of the
meetings of the Board and the committees of which he or she was a member and that were held during the
period he or she served as a director.
What is the Board’s policy regarding director attendance at the Annual Meeting of Shareholders?
The Board of Director’s policy is that all directors should attend the Annual Meeting and ten of the
Company’s 12 directors attended the 2011 Annual Meeting.
How does the Board select nominees for the Board?
The Nominating and Governance Committee considers candidates for Board membership suggested
by its members and other Board members, as well as management and shareholders. The Committee’s
Proxy Statement
charter provides that it may retain a third-party executive search firm to identify candidates from time to
time. The Committee retained the search firm Russell Reynolds in 2011 to assist it in identifying
candidates.
In accordance with our Governance Principles, our Board seeks members from diverse professional
backgrounds who combine a broad spectrum of experience and expertise with a reputation for integrity.
Directors should have experience in positions with a high degree of responsibility, be leaders in the
companies or institutions with which they are affiliated and are selected based upon contributions they can
make to the Board and management. The Committee’s assessment of a proposed candidate will include a
review of the person’s judgment, experience, independence, understanding of the Company’s business or
other related industries and such other factors as the Nominating and Governance Committee determines
are relevant in light of the needs of the Board of Directors. The Committee believes that its nominees
should reflect a diversity of experience, gender, race, ethnicity and age. The Board does not have a specific
policy regarding director diversity. The Committee also considers such other relevant factors as it deems
appropriate, including the current composition of the Board, the balance of management and independent
directors, the need for Audit Committee expertise and the evaluations of other prospective nominees, if
any. In connection with this evaluation, it is expected that each Committee member will interview the
prospective nominee in person or by telephone before the prospective nominee is presented to the full
Board for consideration. After completing this evaluation and interview process, the Committee will make
a recommendation to the full Board as to the person(s) who should be nominated by the Board, and the
Board determines the nominee(s) after considering the recommendation and report of the Committee.
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