XM Radio 2015 Annual Report Download - page 28

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knowledge and experience, financial expertise (including expertise that could qualify a director as a
“financial expert,” as that term is defined by the rules of the SEC), local or community ties, and (b)
minimum individual qualifications, including strength of character, mature judgment, familiarity with
our business and related industries, independence of thought and ability to work collegially. The
Nominating and Corporate Governance Committee also may consider the extent to which a
candidate would fill a present need on the board of directors. After conducting an initial evaluation
of a candidate, the Nominating and Corporate Governance Committee will interview that candidate if
it believes the candidate might be qualified to be a director and may ask the candidate to meet with
other directors and management. If the Nominating and Corporate Governance Committee believes
a candidate would be a valuable addition to the board of directors, it will recommend to the board
that candidate’s nomination as a director.
What is the board’s leadership structure?
Gregory B. Maffei is the Chairman of our board of directors. The Chairman of our board
organizes the work of the board and ensures that the board has access to sufficient information to
enable the board to carry out its functions, including monitoring our performance and the
performance of management. The Chairman, among other things, presides over meetings of the
board of directors, establishes the agenda for each meeting of the board in consultation with our
Chief Executive Officer, oversees the distribution of information to directors, and performs other
duties or assignments as agreed with either the board of directors or our Chief Executive Officer.
The board of directors has determined that it is currently in our best interests to separate the
Chairman of the board position and the Chief Executive Officer position because it allows the Chief
Executive Officer to focus on our day-to-day business, including risk management, while allowing
the Chairman of the board to lead the directors and assist the board in its fundamental role of
providing advice to, and oversight of, management. Further, the board recognizes that the Chief
Executive Officer position requires a significant dedication of time, effort, and energy. Our Corporate
Governance Guidelines (the “Guidelines”) do not establish this approach as a policy, but as a
matter that is considered from time-to-time.
Does the board have a lead independent director?
Liberty Media beneficially owns, directly and indirectly, over 50% of our outstanding common
stock. In light of that control relationship, the board of directors believes it is appropriate, and a
matter of good corporate governance, to designate a director to serve as the lead independent
director. The board has designated Eddy W. Hartenstein, the former Chairman of our board of
directors, to serve as the lead independent director. The lead independent director coordinates the
activities of the other independent directors and performs such other duties and responsibilities as
the board of directors determines.
Are all of the directors required to be independent?
Liberty Media beneficially owns, directly and indirectly, over 50% of our outstanding common
stock entitled to vote for the election of directors. As a result, we are considered a “controlled
company” and are accordingly exempt from certain corporate governance requirements of The
NASDAQ Global Select Market (“NASDAQ”) Rules including, among other items, the requirement
that our board of directors be comprised of a majority of independent directors and that we have a
compensation committee comprised of independent directors and that director nominations are
recommended by the independent members of the board of directors or a nominating committee
composed of independent directors. We rely on these exemptions available to a controlled company
with respect to the independence requirement of our compensation committee and our nominating
committee.
The controlled company exemption does not extend to the audit committee independence
requirements. Accordingly, our audit committee will continue to be comprised solely of directors
meeting the independence standards under the applicable NASDAQ listing standards,
Section 10A(m)(3) of the Exchange Act and our Guidelines. References to Liberty Media in this
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