Fannie Mae 2013 Annual Report Download - page 176

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appointed for a term ending on the date of our next annual shareholders’ meeting. As noted above, however, the conservator
appointed the initial directors to our Board, delegated to the Board the authority to appoint directors to subsequent vacancies
subject to conservator review, and defined the term of service of directors during conservatorship.
Under the Charter Act, our Board shall at all times have as members at least one person from each of the homebuilding,
mortgage lending and real estate industries, and at least one person from an organization that has represented consumer or
community interests for not less than two years or one person who has demonstrated a career commitment to the provision of
housing for low-income households. It is the policy of the Board that a substantial majority of Fannie Mae’s directors will be
independent, in accordance with the standards adopted by the Board. In addition, our Corporate Governance guidelines
provide that the Board, as a group, must be knowledgeable in business, finance, capital markets, accounting, risk
management, public policy, mortgage lending, real estate, low-income housing, homebuilding, regulation of financial
institutions, technology and any other areas that may be relevant to the safe and sound operation of Fannie Mae. In addition
to expertise in the areas noted above, our Corporate Governance Guidelines specify that the Nominating & Corporate
Governance Committee will seek out Board members who possess the highest personal values, judgment, and integrity, and
who have an understanding of the regulatory and policy environment in which Fannie Mae does business. The Committee
also considers whether a prospective candidate for the Board has the ability to attend meetings and fully participate in the
activities of the Board.
The Nominating & Corporate Governance Committee also considers diversity when evaluating the composition of the Board.
Our Corporate Governance Guidelines specify that the Nominating & Corporate Governance Committee is committed to
considering minorities, women and individuals with disabilities in the identification and evaluation process of prospective
candidates. The Guidelines also specify that the Committee will seek out Board members who represent diversity in ideas,
perspectives, gender, race, and disability. These provisions of our Corporate Governance Guidelines implement FHFA
regulations that require the company to implement and maintain policies and procedures that, among other things, encourage
the consideration of diversity in nominating or soliciting nominees for positions on our Board.
The Nominating & Corporate Governance Committee evaluates the qualifications and performance of current directors on an
annual basis. Factors taken into consideration by the Committee in making this evaluation include:
• a director’s contribution to the effective functioning of the corporation;
• any change in the director’s principal area of responsibility with his or her company or his or her retirement from the
company;
• whether the director continues to bring relevant experience to the Board;
• whether the director has the ability to attend meetings and fully participate in the activities of the Board;
• whether the director has developed any relationships with Fannie Mae or another organization, or other circumstances
have arisen, that might make it inappropriate for the director to continue serving on the Board;
• the director’s age and length of service on the Board; and
• the director’s particular experience, qualifications, attributes and skills.
Information regarding the particular experience, qualifications, attributes and skills of each of our current directors is
provided above under “Directors.”
Board Leadership Structure
We have had a non-executive Chairman of the Board since 2004. FHFA examination guidance and our Corporate Governance
Guidelines require separate Chairman of the Board and Chief Executive Officer positions and require that the Chairman of
the Board be an independent director. Our Board is also structured so that all but one of our directors, our Chief Executive
Officer, are independent. A non-executive Chairman structure enables non-management directors to raise issues and concerns
for Board consideration without immediately involving management and is consistent with the Board’s emphasis on
independent oversight, as well as our conservator’s directives.
Our Board has six standing committees: the Audit Committee, the Compensation Committee, the Executive Committee, the
Nominating & Corporate Governance Committee, the Risk Policy & Capital Committee, and the Strategic Initiatives
Committee. The Board and the standing Board committees function in accordance with their designated duties and with the
authorities as set forth in federal statutes, regulations and FHFA examination and policy guidance, Delaware law (for
corporate governance purposes) and in Fannie Mae’s bylaws and applicable charters of Fannie Mae’s Board committees.
Such duties or authorities may be modified by the conservator at any time.