Fannie Mae 2009 Annual Report Download - page 241

Board of Directors requires each of our directors to excuse himself or herself from voting on any issue before
the Board that could result in a conflict, self-dealing or other circumstance where the director’s position as a
director would be detrimental to us or result in a noncompetitive, favored or unfair advantage to either the
director or the director’s associates. In addition, our directors must disclose to the Chair of the Nominating
and Corporate Governance Committee, or another member of the committee, any situation that involves or
appears to involve a conflict of interest. This includes, for example, any financial interest of a director, an
immediate family member of a director or a business associate of a director in any transaction being
considered by the Board, as well as any financial interest a director may have in an organization doing
business with us. Each of our directors also must annually certify compliance with the Code of Conduct and
Conflicts of Interest Policy for Members of the Board of Directors.
The Nominating and Corporate Governance Committee Charter and our Board’s delegation of authorities and
reservation of powers require the Nominating and Corporate Governance Committee to review and approve
any transaction that Fannie Mae engages in with any director, nominee for director or executive officer, or any
immediate family member of a director, nominee for director or executive officer, that is required to be
disclosed pursuant to Item 404 of Regulation S-K. In addition, the Board’s delegation of authorities and
reservation of powers requires the Board and the conservator to approve any action, including a related party
transaction, that in the reasonable business judgment of the Board at the time the action is taken is likely to
cause significant reputational risk.
Our Code of Conduct for employees requires that we and our employees seek to avoid any actual or apparent
conflict between our business interests and the personal interests of our employees or their relatives or
associates. An employee who knows or suspects a violation of our Code of Conduct must raise the issue with
the employee’s manager, another appropriate member of management, a member of our Human Resources
division or our Compliance and Ethics division.
Under our Conflict of Interest Policy and Conflict of Interest Procedure for employees, an employee who has
a potential or actual conflict of interest must request review and approval of the conflict. Conflicts requiring
review and approval include situations where the employee or a close relative of the employee has (1) a
financial interest worth more than $100,000 in an entity that does business with or seeks to do business with
or competes with Fannie Mae or (2) a financial interest worth more than $10,000 in such an entity combined
with the ability to control or influence Fannie Mae’s relationship with the entity. In accordance with its
charter, our Nominating and Corporate Governance Committee must review activities engaged in by our Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, Enterprise Risk Officer, General Counsel,
Chief Audit Executive or Chief Compliance Officer that may result in an actual or potential conflict of interest
under the Employee Code of Conduct or Conflict of Interest Policy and Conflict of Interest Procedure. Our
Chief Executive Officer is responsible for reviewing and approving conflicts involving other executive officers.
If any conflicts are determined to involve significant reputational risk, they must be raised to the conservator.
Our Employment of Relatives Practice prohibits, among other things, situations where an employee would
exercise influence, control or authority over the employee’s relative’s areas of responsibility or terms of
employment, including but not limited to job responsibilities, performance ratings or compensation.
Employees have an obligation to disclose the existence of any relation to another current employee prior to
applying for any position or engaging in any other work situation that may give rise to prohibited influence,
control or authority.
We are required by the conservator to obtain its approval for various matters, some of which may involve
relationships or transactions with related persons. These matters include actions involving the senior preferred
stock purchase agreement, the creation of any subsidiary or affiliate or any substantial non-ordinary course
transactions with any subsidiary or affiliate, actions involving hiring, compensation and termination benefits of
directors and officers at the executive vice president level and above and other specified executives, and any
action that in the reasonable business judgment of the Board at the time that the action is taken is likely to
cause significant reputational risk. The senior preferred stock purchase agreement requires us to obtain
Treasury approval of transactions with affiliates unless, among other things, the transaction is upon terms no
less favorable to us than would be obtained in a comparable arm’s-length transaction with a non-affiliate or
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