Freddie Mac 2015 Annual Report Download - page 353

Directors, Corporate Governance, and Executive Officers Corporate Governance
Freddie Mac 2015 Form 10-K 351
The Risk Committee, which consists entirely of independent directors, oversees the company’s risk
management framework, including credit risk, market risk, and operational risk. The Committee reviews
and approves the company’s ERM policy and reviews significant: (i) enterprise risk exposures; (ii)
management risk strategies; (iii) results of risk management reviews and assessments; and (iv) emerging
risks, among other responsibilities. The Committee also approves all decisions regarding the appointment
or removal of the CERO, and the CERO reports independently to the Committee, in addition to the CEO.
In 2015, the Risk Committee met separately 6 times, and jointly with the Audit Committee 2 times.
BOARD LEADERSHIP STRUCTURE
The positions of CEO and Non-Executive Chairman of the Board are held by different individuals. This
leadership structure was established by the Conservator. FHFA’s Corporate Governance Rule requires
that the position of chairperson of the Board be filled by an independent director as defined under the
rules of the NYSE. See “MD&A — Risk Management — Overview” for more information on the Board’s
role in risk oversight.
For a discussion of the Compensation Committee’s conclusion that our compensation policies and
practices do not create risks that are reasonably likely to have a material adverse effect on us, see
“Executive Compensation — Compensation and Risk.”
COMMUNICATIONS WITH DIRECTORS
Interested parties wishing to communicate any concerns or questions about Freddie Mac to the Board or
its directors may do so by U.S. mail, addressed to the Corporate Secretary, Freddie Mac, Mail Stop 200,
8200 Jones Branch Drive, McLean, VA 22102-3110. Communications may be directed to the Non-
Executive Chairman, to any other director or directors, or to groups of directors, such as the independent
or non-employee directors.
DIRECTOR COMPENSATION
Board members receive compensation in the form of cash retainers only, paid on a quarterly basis. Non-
employee directors are reimbursed for reasonable out-of-pocket costs for attending meetings of the Board
or a Board committee of which they are a member and for other reasonable expenses associated with
carrying out their responsibilities as directors.
Our directors are compensated entirely in cash because the Purchase Agreement prohibits us from
issuing any shares of our equity securities without the prior written consent of Treasury. See “Executive
Compensation —CD&A — Overview of Executive Management Compensation Program.” Unlike
compensation for our executives, there is no provision in the director compensation program for pay that
varies depending on business results. Although such incentive compensation is deemed appropriate to
give management strong incentives to devise and execute business plans and achieve positive financial
results, it is viewed as inconsistent with the oversight role of directors.