LeapFrog 2009 Annual Report Download - page 128

Board Leadership Structure
Our board of directors is composed of our Chief Executive Officer, William B. Chiasson, and eight
non-management directors. Jeffrey G. Katz, who served as our Chief Executive Officer through February 2010,
now serves as the Executive Chairman of the board. Mr. Katz served as Chairman of the board from March 2009
through February 2010. Mr. Katz transitioned to Executive Chairman effective in March 2010 in connection with
his resignation as an officer and employee of LeapFrog. His role as Executive Chairman includes duties similar
to those he had as Chairman, but he is now a non-management director and participates in executive sessions of
the non-management directors. As Executive Chairman, Mr. Katz will continue to have an active role in
consulting with our senior management and board regarding LeapFrog’s business strategy and technology and
product direction. The regular duties of the Chairman of the board, now included in the duties of the Executive
Chairman, are described in our bylaws, which provide that the Chairman presides over meetings of the board and
at meetings of our stockholders, and performs any other duties commonly incident to the office or designated by
our board. The Executive Chairman role will include typical board chair duties such as serving as a liaison
between the other board members and management, reviewing and approving materials to be sent to the board,
working with management and other directors to develop agendas for board meetings, helping build consensus
on proposed board actions, and serving as the chair of board meetings.
In his position as Executive Chairman, Mr. Katz will have substantial authority to shape the work of the
Board. Even though he is not “independent” within the meaning of the NYSE listing standards, we believe that
his status as a non-management director performing this board leadership role will help to reinforce the board’s
independence from management in the board’s oversight of our business and affairs. In addition, we believe that
having a non-management Executive Chairman will serve to create an environment that is conducive to objective
evaluation and oversight of management’s performance and related compensation, increasing management
accountability and improving the ability of the board to monitor whether management’s actions are in our best
interests and those of our stockholders. As a result, we believe our current board leadership structure contributes
to the effectiveness of the board as a whole and, as a result, is the most appropriate structure for us at the present
time. In addition, we believe Mr. Katz’s role in consulting with senior management and board members
facilitates regular open and direct communication between the board and our management, helping to coordinate
the actions of management with direction provided by the board.
Thomas J. Kalinske, who served as our Chief Executive Officer from September 1997 to March 2002 and
again from February 2004 to July 2006, serves as the Vice Chairman of the board and would generally preside
over any meetings and executive sessions of the board if Mr. Katz were not present. Mr. Kalinske provides
industry experience and his perspective as a former CEO of LeapFrog to management as part of his Vice
Chairman role.
Role of Board in Risk Oversight
One of the key functions of our board of directors is informed oversight of our risk management process.
The board does not have a standing risk management committee, but rather administers this oversight function
directly through the board as a whole, as well as through the audit committee, which is responsible for discussing
guidelines and policies to govern the process by which risk assessment and management is undertaken. In
addition, other standing committees of the board address risks inherent in their respective areas of oversight. It is
the responsibility of the committee chairs to report findings regarding material risk exposures to the board as
quickly as possible.
Our board and committees oversee risk, including operational risk, liquidity risk and credit risk, in a variety
of ways, including the following:
• The full board engages in extensive discussion with our executive team on a regular basis concerning
the risks facing the company and how best to manage them. Board meetings generally include detailed
discussion among board members, management and professional advisors regarding material risks we
face as an enterprise, including operational and financial risks. Our management provides information
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