Eli Lilly 2011 Annual Report Download - page 110

PROXY STATEMENT
Directors and Corporate Governance Committee Matters
Overview
The directors and corporate governance committee recommends to the board candidates for membership on the
board and board committees and for lead director. The committee also oversees matters of corporate governance,
including board performance, director independence and compensation, and the corporate governance guidelines.
The committee’s charter is available online at http://investor.lilly.com/governance.cfm or in paper form upon
request to the company’s corporate secretary.
All committee members are independent as defined in the NYSE listing requirements.
Director Qualifications
The board seeks independent directors who represent a mix of backgrounds and experiences that will enhance the
quality of the board’s deliberations and decisions. Candidates shall have substantial experience with one or more
publicly-traded national or multinational companies or shall have achieved a high level of distinction in their chosen
fields.
Board membership should reflect diversity in its broadest sense, including persons diverse in geography,
gender, and ethnicity. The board is particularly interested in maintaining a mix that includes the following back-
grounds:
• active or retired chief executive officers and senior executives, particularly those with experience in operations,
finance, accounting, banking, marketing, and sales
• international business
• medicine and science
• government and public policy
• health care system (public or private).
Finally, board members should display the personal attributes necessary to be an effective director:
unquestioned integrity; sound judgment; independence in fact and mindset; ability to operate collaboratively; and
commitment to the company, its shareholders, and other constituencies.
Our board members represent a desirable mix of backgrounds, skills, and experiences, and they all share the
personal attributes of effective directors described above. The board monitors the effectiveness of this approach via
an annual internal board assessment as well as ongoing director succession planning discussions by the directors
and corporate governance committee. Specific experiences and skills of our independent directors are included in
”Director Biographies” above.
Director Nomination Process
The board delegates the screening process to the directors and corporate governance committee, which receives
direct input from other board members. Potential candidates are identified through recommendations from several
sources, including:
• incumbent directors
• management
• shareholders
• independent executive search firms that may be retained by the committee to assist in locating and screening
candidates meeting the board’s selection criteria.
The committee employs the same process for evaluating all candidates, including those submitted by share-
holders. The committee initially evaluates a candidate based on publicly available information and any additional
information supplied by the party recommending the candidate. If the candidate appears to satisfy the selection cri-
teria and the committee’s initial evaluation is favorable, the committee, assisted by management or the search firm,
gathers additional data on the candidate’s qualifications, availability, probable level of interest, and any potential
conflicts of interest. If the committee’s subsequent evaluation continues to be favorable, the candidate is contacted
by the chairman of the board and one or more of the independent directors for direct discussions to determine the
mutual levels of interest in pursuing the candidacy. If these discussions are favorable, the committee makes a final
recommendation to the board to nominate the candidate for election by the shareholders (or to select the candidate
to fill a vacancy, as applicable). Dr. Baicker, who is standing for election, was referred to the committee by an
independent incumbent director.
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