Fannie Mae 2012 Annual Report Download - page 225

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Independence Standards
Under the standards of independence adopted by our Board, which meet and in some respects exceed the independence
requirements set forth in FHFA’s corporate governance regulations (which requires the standard of independence adopted by
the NYSE), an “independent director” must be determined to have no material relationship with us, either directly or through
an organization that has a material relationship with us. A relationship is “material” if, in the judgment of the Board, it would
interfere with the director’s independent judgment. The Board did not consider the Board’s duties to the conservator, together
with the federal government’s controlling beneficial ownership of Fannie Mae, in determining independence of the Board
members.
In addition, under FHFA’s corporate governance regulations, our Audit Committee is required to be in compliance with the
NYSE’s listing requirements for audit committees, under which members of a company’s audit committee must meet
additional, heightened independence criteria. Our own independence standards require all independent directors to meet these
criteria.
To assist it in determining whether a director is independent, our Board has adopted the standards set forth below, which are
posted on our Web site, www.fanniemae.com, under “Governance” in the “About Us” section of our Web site:
• A director will not be considered independent if, within the preceding five years:
• the director was our employee; or
• an immediate family member of the director was employed by us as an executive officer.
• A director will not be considered independent if:
• the director is a current partner or employee of our external auditor, or within the preceding five years, was (but is
no longer) a partner or employee of our external auditor and personally worked on our audit within that time; or
• an immediate family member of the director is a current partner of our external auditor, or is a current employee of
our external auditor and personally works on Fannie Mae’s audit, or, within the preceding five years, was (but is no
longer) a partner or employee of our external auditor and personally worked on our audit within that time.
• A director will not be considered independent if, within the preceding five years:
• the director was employed by a company at a time when one of our current executive officers sat on that company’s
compensation committee; or
• an immediate family member of the director was employed as an officer by a company at a time when one of our
current executive officers sat on that company’s compensation committee.
• A director will not be considered independent if, within the preceding five years:
• the director received any compensation from us, directly or indirectly, other than fees for service as a director; or
• an immediate family member of the director received any compensation from us, directly or indirectly, other than
compensation received for service as our employee (other than an executive officer).
• A director will not be considered independent if:
• the director is a current executive officer, employee, controlling stockholder or partner of a company or other entity
that does or did business with us and to which we made, or from which we received, payments within the preceding
five years that, in any single fiscal year, were in excess of $1 million or 2% of the entity’s consolidated gross annual
revenues, whichever is greater; or
• an immediate family member of the director is a current executive officer of a company or other entity that does or
did business with us and to which we made, or from which we received, payments within the preceding five years
that, in any single fiscal year, were in excess of $1 million or 2% of the entity’s consolidated gross annual revenues,
whichever is greater.
• A director will not be considered independent if the director or the director’s spouse is an executive officer, employee,
director or trustee of a nonprofit organization to which we make or have made contributions within the preceding three
years that, in a single year, were in excess of 5% of the organization’s consolidated gross annual revenues, or $120,000,
whichever is less (amounts matched under our Matching Gifts Program are not included in the contributions calculated
for purposes of this standard). The Nominating & Corporate Governance Committee also will receive periodic reports
regarding charitable contributions to organizations otherwise associated with a director or any spouse of a director.
After considering all the facts and circumstances, our Board may determine in its judgment that a director is independent (in
other words, the director has no relationship with us that would interfere with the director’s independent judgment), even