Eli Lilly 2015 Annual Report Download - page 138

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P22
any outside party except under limited circumstances where the director is seeking legal advice or is required
to disclose information by order of law. The Confidentiality Policy can be viewed on the company's website
here: http://www.lilly.com/about/corporate-governance/Pages/corporate-governance.aspx.
Leadership Structure; Oversight of Chairman, CEO, and Senior
Management
Leadership Structure
The Board currently believes that combining the role of chairman of the Board and the CEO, coupled with a
strong lead director position, is the most efficient and effective leadership model for the company, fostering
clear accountability, effective decision-making, and alignment on corporate strategy. The Board periodically
reviews its leadership structure and developments in the area of corporate governance in order to ensure that
this approach continues to strike the appropriate balance for the company and our stakeholders.
Board Independence
The Board has put in place a number of governance practices to ensure effective independent oversight,
including:
• Executive sessions of the independent directors: held after every regular board meeting.
• Annual performance evaluation of the chairman and CEO: conducted by the independent
directors, the results of which are reviewed with the chief executive officer and considered by
Compensation Committee in establishing the CEO’s compensation for the next year.
• A strong, independent, clearly defined lead director role: The lead director's responsibilities
include:
Leading the Board’s processes for selecting and evaluating the CEO;
Presiding at all meetings of the Board at which the chairman is not present;
Serving as a liaison between the chairman and the independent directors;
If requested by major shareholders, ensures that she is available for consultation and direct
communication;
Approving meeting agendas and schedules and generally approving information sent to the Board;
Conducting executive sessions of the independent directors;
Overseeing the independent directors' annual performance evaluation of the chairman and CEO;
and
Together with the Directors and Corporate Governance Committee, leading the director
recruitment process.
The lead director also has authority to call meetings of the independent directors and to retain
advisers for the independent directors.
The lead director is appointed annually by the Board. Currently Ms. Marram is the lead director.
• Director access to management and independent advisors: Independent directors have direct
access to members of management whenever they deem it necessary; and the company's executive
officers attend part of each regularly scheduled Board meeting. The independent directors and all
committees are also free to retain their own independent advisors, at company expense, whenever
they feel it would be desirable to do so.
CEO Succession Planning
The Compensation Committee, Board, and CEO annually review the company's succession plans for the
CEO and other key senior leadership positions. During these reviews, the CEO and independent directors
discuss future candidates for the CEO and other senior leadership positions, succession timing, and
development plans for the highest-potential candidates. The company ensures that the directors have multiple