LeapFrog 2013 Annual Report Download - page 119
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Please find page 119 of the 2013 LeapFrog annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Our Chairman presides over all executive sessions of the board of directors, including, beginning in
March 2014, independent executive sessions (meetings of the non-management directors who are also
independent directors) of the board of directors. Prior to March 2014, since our Chairman was not an
independent director under NYSE standards, for all independent executive sessions of the board of directors,
the remaining directors selected a temporary chairman to lead the meeting.
If our Chairman is absent from an executive session of the board of directors, the remaining directors
select a temporary chairman to lead the meeting. For executive sessions of committees, the chair of the
committee presides over all executive sessions of his committee. If a committee chair is absent for a
committee executive session, the remaining committee members determine as a group the presiding director
for executive sessions on a case-by-case basis.
ROLE OF BOARD IN RISK OVERSIGHT
One of the key functions of our board of directors is informed oversight of our risk management. The
Company has built internal processes and a strong internal control environment which facilitate not only the
identification and management of risks, but also regular communication with and oversight by the board of
directors in this regard.
The Company’s internal audit function oversees an enterprise risk management program and the
Company maintains a Compliance Committee consisting of the chief financial officer, the general counsel, the
vice president of human resources and the director of internal audit. The Compliance Committee reports
directly to the chair of the audit committee. In addition, the Company has regular internal management
disclosure committee meetings, maintains a Code of Business Conduct and Ethics, product quality standards
and processes and a variety of other policies and procedures designed to control and minimize risk.
Management communicates routinely with the board of directors, board committees and individual directors
on the significant risks identified and how they are being managed. Directors are free to, and often do,
communicate directly with senior management on these and other risk-related topics.
The board of directors implements its risk oversight function both as a whole and through delegation to
board committees, which meet regularly and report back to the full board. All committees play significant
roles in carrying out the risk oversight function. The board and its committees’ risk oversight function
includes the following:
• The board of directors monitors and evaluates the effectiveness of the Company’s internal controls
and the enterprise risk management program at least annually and the audit committee does so at
least quarterly. At audit committee meetings, the committee reviews our risk management policies
and processes and material risk exposures in depth, including financial risk exposures facing our
business, in addition to monitoring our compliance with legal and regulatory requirements. Audit
committee meetings generally include extensive discussion between the committee members and
our internal and external auditors, legal advisors and operational leads regarding the material risks
identified by these parties in their capacities as advisors to or leaders of LeapFrog, and how we plan
to address them. In addition, such reviews include evaluating the effectiveness of our risk
management processes and how to improve them, if necessary.
• The full board of directors engages in extensive discussions with our executive team on a regular
basis concerning the risks facing the Company and how best to manage them. Board of directors
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 to the board of directors regarding our approach to material
risks, both at meetings and in regular informal discussions, and takes extensive guidance from the
board of directors in decision-making with respect to such matters.
• The board of directors and audit committee generally review the disclosures in our Annual Report
on Form 10-K, including the risk factors. The audit committee reviews the Annual Report on
Form 10-K in detail and also reviews and discusses with management the disclosures in our
Quarterly Reports on Form 10-Q and holds extensive discussions with management concerning
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