TripAdvisor 2012 Annual Report Download - page 144

General Counsel and Secretary attend Board meetings and discuss operational risks with the Board. Management
also provides quarterly reports and presentations on strategic risks to the Board. Among other areas, the Board is
directly involved in overseeing risks related to our overall corporate strategy, business continuity, crisis
preparedness and competitive and reputational risks.
The committees of the Board execute their oversight responsibility for risk management as follows:
• The Audit Committee is responsible for discussing with management the Company’s major financial risks
and the steps management has taken to monitor and control such risks. In fulfilling its responsibilities, the
Audit Committee receives regular reports from the Senior Vice President, Chief Financial Officer, Chief
Accounting Officer and Treasurer, the Senior Vice President, General Counsel and Secretary, the Vice
President of Tax, the Corporate Controller, the Senior Corporate Counsel and from Ernst & Young LLP.
The Audit Committee makes regular reports to the Board of Directors. In addition, we have, under the
supervision of the Audit Committee, established procedures available to all employees for the anonymous
and confidential submission of complaints relating to any matter to encourage employees to report
questionable activities directly to our senior management and the Audit Committee.
• The Compensation Committee considers and evaluates risks related to our cash and equity-based
compensation programs and practices and evaluates whether our compensation plans encourage
participants to take excessive risks that are reasonably likely to have a material adverse effect on
TripAdvisor. Consistent with SEC disclosure requirements, management has assessed compensation
policies and practices for Company employees and has concluded that such policies and practices do not
create risks that are reasonably likely to have a material adverse effect on TripAdvisor.
Director Nominations
Given the ownership structure of TripAdvisor and our status as a “controlled company,” the Board of
Directors does not have a nominating committee or other committee performing similar functions or any formal
policy on director nominations. Pursuant to the Governance Agreement, Liberty has the right to nominate a
number of directors equal to 20% of the total number of the directors on the Board of Directors (rounded up to
the next whole number if the number of directors on the Board is not an even multiple of five) for election to the
Board of Directors so long as certain stock ownership requirements are satisfied. The Board of Directors does not
have specific requirements for eligibility to serve as a director of TripAdvisor, nor does it have a specific policy
on diversity. However, in evaluating candidates, regardless of how recommended, the Board of Directors
considers whether the professional and personal ethics and values of the candidate are consistent with those of
TripAdvisor, whether the candidate’s experience and expertise would be beneficial to the Board in rendering
service to TripAdvisor, including in providing a mix of Board members that represent a diversity of backgrounds,
perspectives and opinions, whether the candidate is willing and able to devote the necessary time and energy to
the work of the Board of Directors, and whether the candidate is prepared and qualified to represent the best
interests of TripAdvisor’s stockholders. Given the controlled status of TripAdvisor, the Board of Directors
believes the process described above is appropriate. Liberty has nominated Messrs. Maffei and Shean as
nominees for 2013. The other nominees to the Board of Directors were recommended by the Chairman and then
were considered and recommended by the entire Board of Directors.
The Board of Directors does not have a formal policy regarding the consideration of director candidates
recommended by stockholders. However, the Board of Directors would consider such recommendations if made in
the future. Stockholders who wish to make such a recommendation should send the recommendation to
TripAdvisor, Inc., 141 Needham Street, Newton, Massachusetts 02464, Attention: Secretary. The envelope must
contain a clear notation that the enclosed letter is a “Director Nominee Recommendation.” The letter must identify
the author as a stockholder, provide a brief summary of the candidate’s qualifications and history and be
accompanied by evidence of the sender’s stock ownership, as well as consent by the candidate to serve as a director
if elected. Any director candidate recommendations will be reviewed by the Secretary and, if deemed appropriate,
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