Freddie Mac 2015 Annual Report Download - page 349

Directors, Corporate Governance, and Executive Officers Corporate Governance
Freddie Mac 2015 Form 10-K 347
Committee Chair, in consultation with the Non-Executive Chairman, will address any questions that
may arise regarding whether recusal from a particular discussion or action is appropriate.
In evaluating Mr. Hartnack’s independence in light of his ownership of US Bancorp stock, our non-
employee Board members considered the nature and extent of Freddie Mac’s business relationship
with US Bancorp and any potential impact that his stock ownership might have on his independent
judgment as a Freddie Mac director, taking into account the recusal arrangement. Our non-employee
Board members concluded that Mr. Hartnack’s recusal arrangement concerning US Bancorp would
address any actual or potential conflicts of interest that might arise with respect to his ownership of
US Bancorp stock. Accordingly, our non-employee Board members concluded that Mr. Hartnack’s
ownership of US Bancorp stock does not constitute a material relationship between him and Freddie
Mac that would impair his independence as a Freddie Mac director.
Mr. Naqvi owns stock of PNC Financial Services Group, Inc. (“PNC”). In the aggregate, this stock
represents a material portion of his net worth. PNC conducts significant business with Freddie Mac,
including as a single-family seller/servicer and as trustee of some of Freddie Mac’s securitization
transactions. In order to eliminate any potential conflict of interest that might arise as a result of this
stock ownership, Mr. Naqvi has agreed to recuse himself from discussing and acting upon any
matters that are to be considered by the full Board or any of the committees of which he is a member
(including the Risk Committee), and that relate directly to PNC. The Audit Committee Chair, in
consultation with the Non-Executive Chairman, will address any questions that may arise regarding
whether recusal from a particular discussion or action is appropriate.
In evaluating Mr. Naqvi’s independence in light of his ownership of PNC stock, our non-employee
Board members considered the nature and extent of Freddie Mac’s business relationship with PNC
and any potential impact that his stock ownership might have on his independent judgment as a
Freddie Mac director, taking into account the recusal arrangement. Our non-employee Board
members concluded that Mr. Naqvi’s recusal arrangement concerning PNC would address any actual
or potential conflicts of interest that might arise with respect to his ownership of PNC stock.
Accordingly, our non-employee Board members concluded that Mr. Naqvi’s ownership of PNC stock
does not constitute a material relationship between him and Freddie Mac that would impair his
independence as a Freddie Mac director.
BOARD AND COMMITTEE INFORMATION
AUTHORITY OF THE BOARD AND BOARD COMMITTEES
The directors serve on behalf of, and exercise authority as directed by, the Conservator. The Conservator
has delegated to the Board and its committees authority to function in accordance with the duties and
authorities set forth in applicable statutes, regulations, guidance, orders and directives, and our Bylaws
and Board committee charters, while reserving certain powers of approval to itself. The Conservator has
instructed the Board that it should oversee that management consults with and obtains approval of the
Conservator before taking action in the following areas:
• Matters requiring the approval of or consultation with Treasury under the covenants of the Purchase
Agreement (see “MD&A — Conservatorship and Related Matters — Treasury Agreements and Senior
Preferred Stock” and Note 2);