XM Radio 2010 Annual Report Download - page 28

GOVERNANCE OF THE COMPANY
How does the board of directors oversee our risk management process?
The board executes its oversight responsibility for risk management directly and through its committees,
as follows:
• The Audit Committee has primary responsibility for monitoring our internal audit, corporate, financial
and risk management processes and overseeing our system of internal controls and financial reporting.
The Audit Committee discusses specific risk areas throughout the year, including those that may arise
from time to time and the measures taken by management to monitor and limit risk.
• The Audit Committee receives regular reports throughout the year on matters related to risk
management. At each regularly scheduled meeting, the Audit Committee receives reports from our
(i) external auditor on the status of audit activities and findings and (ii) our executive in charge of
internal audit (who reports directly to the Audit Committee) on the status of the internal audit plan,
audit results and any corrective action taken in response to internal audit findings.
• We have a Compliance Officer who is in charge of our compliance with FCC related laws and
regulations and training and monitoring compliance with those laws and regulations. Our Executive
Vice President, General Counsel and Secretary reports to the Audit Committee throughout the year on
calls to our compliance hotline and any changes or developments in compliance matters. Each quarter,
our Chief Financial Officer reports to the board of directors on our performance and discusses how
actual performance compares to our business plan and budget. Our executive officers report regularly to
the board about the risks and exposures related to our business.
• The other committees of the board of directors oversee risks associated with their respective areas of
responsibility. For example, the Compensation Committee assesses risks associated with our compensa-
tion policies and programs for executives as well as employees generally.
• The committees report to the board of directors at every regular board meeting on the topics discussed
and actions taken at the most recent committee meeting. Our board of directors discusses the risks and
exposures, if any, involved in the matters or recommendations of the committees, as necessary.
• Our board of directors also considers specific risk topics throughout the year, including risks associated
with our business plan, operational efficiency, government regulation, physical facilities, information
technology infrastructure and capital structure, among many others. The board is informed about and
regularly discusses our risk profile, including legal, regulatory and operational risks to our business.
What are our policies and procedures for related party transactions?
We have adopted a written policy and written procedures for the review, approval and monitoring of
transactions involving the company and “related persons.” For the purposes of the policy, “related persons”
include executive officers, directors and director nominees or their immediate family members, or stockholders
owning five percent or greater of our common stock.
Our related person transaction policy requires:
• that any transaction in which a related person has a material direct or indirect interest and which
exceeds $120,000 (such transaction referred to as a “related person” transaction) and any material
amendment or modification to a related person transaction, be reviewed and approved or ratified by a
committee of the board composed solely of independent directors who are disinterested or by the
disinterested members of the board; and
• that any employment relationship or transaction involving an executive officer and any related
compensation must be approved by the Compensation Committee of the board or recommended by the
Compensation Committee to the board for its approval.
18