SEAGATE TECHNOLOGY HOLDINGS PLC Corporate Governance Guidelines
The Board of Directors (the “Board”) of Seagate Technology Holdings plc (the “Company”) has adopted the following guidelines to clarify how it exercises its responsibilities. Additionally, these guidelines demonstrate that the Board has the necessary authority and practices in place to review and evaluate the Company's business operations as appropriate and to make decisions that are independent of the Company's management.
These guidelines, along with the charters of the committees of the Board, describe the Board’s framework for the governance of the Company. The Board will continue to assess the appropriateness and efficacy of these guidelines, which are subject to change as the Board deems appropriate in the best interests of the Company or as required by applicable laws and regulations. The Nominating and Corporate Governance Committee of the Board (the “Nominating and Corporate Governance Committee”) reviews these guidelines periodically and recommends changes to the Board as appropriate.
Jump to the following sections:
Board Composition/Membership Criteria
Directors with Significant Job Changes
Committees of the Board
Board and Committee Operations
Board Compensation Program
- Board Overview. The Board directs and oversees the management of the business and affairs of the Company in a manner consistent with the best interests of the Company and its shareholders. In this oversight role, the Board serves as the ultimate decision-making body of the Company, except for those matters reserved to the shareholders. The Board selects and oversees the members of senior management who are charged by the Board with conducting the business of the Company. Both the Board and management recognize that the long-term interests of the Company are advanced by responsibly addressing the concerns of other constituencies, including employees, customers, suppliers and the communities in which the Company operates. Accordingly, the directors provide oversight in the formulation of the long-term strategic, financial and organizational goals of the Company and of the plans designed to achieve those goals.
- Board Composition/Membership Criteria.
- Board Size. Consistent with the Company’s Constitution, the number of Directors which constitutes the whole Board may be not less than two, nor, subject to the shareholders increasing or reducing the upper limit, more than 12, with the actual number determined by resolution of the Board. The Nominating and Corporate Governance Committee periodically reviews the size of the Board to ensure that the current number of directors most effectively supports the Company.
- Director Independence. The Board believes that as a matter of good corporate governance, and consistent with applicable laws, rules and regulations, the Board should consist of at least a majority of independent directors, and in no event will the Board consist of less than a majority of independent directors. A director qualifies as independent for purposes of service on the Board and its committees if the Board has determined that the director meets the definition of “independent director” in the listing standards of the NASDAQ Listing Rules (“NASDAQ”). The Board is also responsible for determining affirmatively, as to each independent director, that no relationship exists which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
- Board Membership Criteria. The Nominating and Corporate Governance Committee is responsible for reviewing the qualifications of potential director candidates and recommending to the Board those candidates to be nominated for election to the Board. The Nominating and Corporate Governance Committee works with the Board to determine periodically, as appropriate, the desired Board qualifications, experience, and characteristics. The Company is committed to its value of Inclusion and the Board believes it is important to consider diversity of race, ethnicity, gender, age, education, cultural background, and professional experiences, including from non-traditional environments, in evaluating board candidates. Accordingly, when evaluating candidates for nomination as new directors, the Nominating and Corporate Governance Committee will consider the foregoing factors and seek to identify candidates that include both underrepresented races and ethnicities and different genders. If the Nominating and Corporate Governance Committee chooses to engage a search firm, it will ask such search firm to seek to identify potential candidates that include both underrepresented races and ethnicities and different genders, who also meet the other qualifications that the Nominating and Corporate Governance Committee has determined are needed. Each director candidate should possess a commitment to representing the long-term interests of the shareholders, the highest character and integrity, ability to make independent analytical inquiries, sufficient time to devote to Board matters, understanding of the Company’s business, and no conflict of interest that would interfere with performance as a director.
- Director Tenure. The Company’s shareholders elect each of the directors annually for a one-year term. Directors may also be appointed by the Board between shareholder meetings. The Board has not established term limits. While term limits offer some advantages, the Board believes that any benefit is outweighed by the disadvantage of losing experienced Directors who have developed valuable insight into the Company, its operations, strategies, plans and potential. As an alternative to term limits, the Nominating and Corporate Governance Committee reviews the qualifications and contributions of each director in considering whether they should be nominated for re-election to the Board and makes recommendations to the Board regarding whether they should stand for re-election by the shareholders. Shareholders may also nominate directors for election at the Company’s annual general meeting, and the Nominating and Corporate Governance Committee will consider these nominations. In addition, under Irish law, shareholders holding not less than 10% of the voting rights may call a shareholder meeting for the purpose of, amongst other things, considering director nominations
- Board Leadership.
Board Chair. The Board generally believes that the offices of Board Chair and Chief Executive Officer (“CEO”) should be held by separate persons to aid in the 3 oversight of management, unless the Board determines it is in the best interests of the Company that the same person hold both offices. If the Board Chair is held by a person other than the CEO, the Board Chair will coordinate the activities of the non-management directors. The Board Chair is authorized to call meetings of the Board and independent directors, sets Board meeting agendas in consultation with other directors, the CEO and Corporate Secretary, chairs executive sessions of the independent directors, leads the Board’s annual CEO performance evaluation, and when requested, represents the Board with internal and external audiences including shareholders, and performs the other duties either specified in these guidelines or assigned from time to time by the Board
Lead Independent Director. If the Board Chair is not an independent director, the Nominating and Corporate Governance Committee shall nominate and the independent directors shall elect a Lead Independent Director from the Company’s independent directors at their first executive session after each annual general meeting. The Lead Independent Director coordinates the activities of the other non-management directors, presides over meetings of the Board at which the Board Chair is not present and each executive session, facilitates the CEO evaluation process, serves as liaison between the Board Chair and the independent directors, approves meeting schedules and agendas for the Board, has authority to call meetings of the independent directors, and is available for consultation and direct communication if requested by major shareholders. Service as Lead Independent Director will rotate as the Board deems appropriate
- Director service on other Boards.
Other Company Boards: Directors are required to advise the Chair of the Nominating and Corporate Governance Committee and the Company Secretary prior to joining the board of another public or private company so that any potential conflicts or other issues are carefully considered. The Chair of the Nominating and Corporate Governance Committee will review the matter with the full committee, taking into account any potential conflicts of interest as well as the impact on a director’s ability to discharge his or her duties to the Company and its shareholders. Directors are generally limited to service on five (5) public company boards including the Company’s Board. Directors who serve as CEO of another public company, are limited to service on one other public company board in addition to service on the Company’s Board and service on the board for which the director is a CEO. In addition, no member of the Audit and Finance Committee of the Board (the “Audit and Finance Committee”) may serve on the audit committee or audit and finance committee of more than three (3) public companies (including the Company) unless the Board of Directors determines that such simultaneous service would not impair the ability of such member to effectively serve on the Audit and Finance Committee. The Company expects all directors to devote sufficient time and effort to their duties as a Company Board member. Service on other boards and/or committees should be consistent with this expectation and with the Company’s conflict of interest policies set forth in (i) Section II.E below, (ii) the Company’s Code of Conduct, (iii) the Company’s Policy and Procedures Governing Related Person Transactions, and (iv) the Company’s Constitution. These factors are considered in the individual director evaluation process.
Service by CEO on Other Boards: Our CEO is limited to service on two (2) public company boards including the Company’s Board. The CEO is required to advise the Chair of the Nominating and Corporate Governance Committee and the 4 Company Secretary prior to joining the board of another public or private company so that any potential conflicts or other issues are carefully considered. The Chair of the Nominating and Corporate Governance Committee may then review the matter with the full committee, taking into account any potential conflicts of interest as well as the impact on the CEO’s ability to discharge his or her duties to the Company and its shareholders. The CEO may not serve on the board of a company at which a director of the Company serves as an officer without prior approval from the Nominating and Corporate Governance Committee.
Service by Executive Officers (other than our CEO) on Other Boards: Our Executive Officers (other than our CEO) are limited to service on one public or private company board. The Executive Officer is required to advise the Chair of the Nominating and Corporate Governance Committee and the CEO prior to joining the board of another public or private company so that any potential conflicts or other issues are carefully considered. The Chair of the Nominating and Corporate Governance Committee may then review the matter with the full committee, taking into account any potential conflicts of interest as well as the impact on the Executive Officer’s ability to discharge his or her duties to the Company. The Executive Officer may not serve on the board of a company at which a director of the Company serves as an officer without prior approval from the Nominating and Corporate Governance Committee
- Conflicts of Interest. Directors are expected to avoid any action, position or interest that conflicts with the interests of the Company or gives the appearance of a conflict. If an actual or potential conflict of interest develops or if a transaction constitutes a “related person transaction,” the director will report all facts regarding the matter to the Chair of the Nominating and Corporate Governance Committee and the Company Secretary. If a director has a personal interest in a matter before the Board, the director must disclose the interest to the Board and the Company Secretary, excuse himself or herself from discussion, and abstain from voting, on the matter.
- Board Responsibilities.
- Review and Approve the Company’s Strategic Direction, Annual Operating Plan and Major Corporate Actions. The Board and the senior management team discuss, and, where appropriate, the Board approves major long-term strategies, financial and other objectives and plans, and major corporate actions. The Board reviews and approves an operating plan for the Company and is also expected to review significant political, regulatory and economic trends and developments that may have an impact on the Company.
- Monitor the Company's Performance. The Board monitors the Company’s performance against its operating plan and against the performance of its peers. On a periodic basis, the Board reviews the Company’s financial performance with a particular focus on peer and competitive comparisons. These reviews include the views of management, as well as those of key investors and securities analysts
- Evaluate the Performance of the Company and the CEO. The non-management directors periodically meet separately to evaluate the Company’s direction and performance and to discuss the individual performance and compensation of the CEO following an evaluation by the Compensation Committee of the Board (the “Compensation Committee”). The results of this evaluation are provided to the CEO.
- Review and Approve CEO and Senior Management Succession Planning. The Board understands the importance of orderly succession planning within the Company. The Board performs an annual assessment of the CEO’s and senior managements’ succession planning and the development plans in place to prepare potential successors. The Board also evaluates the contingency plans for interim succession for the CEO and Chief Financial Officer (“CFO”) in the event of an unexpected occurrence.
- Advice and Counsel to Management. AAdvice and counsel to management occurs both through formal Board and Board committee meetings and through informal, individual directors’ contacts with the CEO and other members of management at various levels throughout the Company.
- Oversee Ethical and Legal Compliance. The Board, directly and through its Committees, oversees ethical and legal compliance by ensuring that the processes are in place for maintaining integrity throughout the Company – including the integrity of the financial statements and the integrity of compliance with laws and ethics and with the Company’s Senior Financial Officer Code of Ethics (“Code of Ethics”).
- Loyalty and Ethics. In their roles as directors, all directors owe fiduciary duties to the Company including a duty to act in the best interest of the Company. The Company has adopted a Code of Conduct and directors are expected to adhere to the Code of Conduct.
- Oversee Risk Management. The Board, directly and through its Committees, oversees the Company’s enterprise risk management processes and programs, including those for financial and operational risks, assesses various risks facing the Company including those pertaining to cybersecurity, data privacy, product security and the Company’s computerized information system controls, reviews strategies for risk mitigation, and at least two times per year reviews the steps the Company’s management is taking or has taken to monitor and control risk within risk appetite guidelines
- Directors Who Change Their Present Employment or Business Affiliation. Upon a change of a Director’s principal employment or business affiliation, the Director shall promptly inform the Chair of the Nominating and Corporate Governance Committee in writing of this change with a copy sent to the Company Secretary. The Nominating and Corporate Governance Committee shall assess the appropriateness of such non-employee director remaining on the Board and shall recommend to the Board whether to request that such non-employee director tender his or her resignation. If determined by the Nominating and Corporate Governance Committee, such non-employee director is expected to promptly tender his or her resignation from the Board and all committees thereof in writing to the Chair of the Nominating and Corporate Governance Committee. Directors who are also Seagate employees are expected to offer their resignation from the Board at the same time they leave active employment with the Company, which shall be subject to acceptance by the Board.
- Committees of the Board. The Board oversees all decisions of major importance at the Company. To assist it in governing issues in greater depth, the Board has established three standing committees: the Audit and Finance Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Members of the Audit and Finance, Compensation and Nominating and Corporate Governance Committees must meet the independence standards set forth by NASDAQ and other regulatory standards applicable to such committees, as determined by the Board. Each committee reports to the Board. The Board may add additional committees or disband additional committees from time to time as it deems advisable for purposes of fulfilling its primary responsibilities (all committees of the Board, the “Committees” and individually, a “Committee”).
The Board also considers periodic rotation of committee members and chairs, taking into account the benefits of continuity and experience, and applicable legal, regulatory and stock exchange listing requirements. A director may serve on more than one committee.
Additionally, each committee periodically conducts a review and evaluation of the performance of such committee and its members, including the committee’s compliance with its charter. The Company publishes the committee charters on its website.
- Board and Committee Operations.
- Board Meetings and Director Attendance. The Company’s Board meets at least quarterly, but meets more often as determined necessary. The Board Chair presides at meetings of the Board, or in his or her absence, the Lead Independent Director presides. Each director is expected to attend both scheduled and special meetings (and, in no event, fewer than 75% of the meetings), except if unusual circumstances make attendance impractical. A director who is unable to attend a Board or committee meeting should notify the Board or committee Chair and the CEO in advance of the meeting. Directors are also expected to make an effort to attend the annual general meeting.
- Board Meeting Agendas. The Board Chair establishes a preliminary agenda for each Board meeting. Any director may request items to be included on the agenda. The Board Chair and / or the Lead Independent Director approves the final draft agenda prior to each quarterly Board meeting.
While the Board believes that a carefully planned agenda is important for effective Board meetings, the agenda is flexible enough to accommodate new developments. Ample time is scheduled for each Board meeting for full discussion of important matters. Agendas, in addition to including financial and operating reports, include other reports, such as current issues that could affect the Company’s short- and/or long-term strategy and business, critical measures and comparisons, and other types of presentations that could enhance a director’s perspective on various matters. Management presentations are scheduled to permit a substantial portion of Board meeting time to be available for discussion and comments.
- Executive Sessions. To promote free and open discussion and communication among the independent directors, the Board and each Committee reserves time at each regular Board or Committee meeting, respectively, but no less than twice per year, for the non-employee directors to meet in executive session without management directors or other management present. “Non-employee directors” 7 are all directors who are not Company employees, including both independent directors and such directors who are not independent directors by virtue of a material relationship, former status or family membership, or for any other reason. In addition, if the non-employee directors include directors who are not independent directors, the Board will reserve time at each regular Board meeting, but no less than twice per year, for the independent directors to meet in executive session without non-independent directors and management present. If the Board Chair is not an independent director, the Lead Independent Director chairs executive sessions.
- Information Flow to the Board. Board members receive agendas and other information in advance of Board meetings so they will have an opportunity to prepare for discussion of the items at the meeting, unless timing considerations or the sensitive nature of an issue require that materials be presented only at the Board meeting. Each director is expected to review this information in advance of the meeting to facilitate the efficient use of meeting time. In preparing this information, management strives to ensure that the materials distributed are as concise as possible yet give directors sufficient information to make informed decisions. Management will make appropriate personnel available to answer any questions a director may have about any aspect of the Company’s business.
Information to the Board is provided from a variety of sources, including management reports, a comparison of performance to operating and financial plans, reports on the Company’s share performance and operations prepared by third parties, and articles from various business publications.
As appropriate, significant items requiring Board approval may be reviewed in one or more meetings and voted upon in subsequent meetings, with the intervening time being used for clarification and discussion of relevant issues.
- Regular Attendance of Non-Directors at Board Meetings. Company senior executives report to the Board on their respective areas of responsibility as requested by the Board. At times, other Company personnel are asked to make specific presentations to the Board.
- New Director Orientation. The Company’s new directors are required to attend an orientation session, which includes receiving and reviewing extensive materials relative to the Company’s business and operations including, but not limited to, financial statements and corporate structure and governance. Incumbent directors are invited to attend such orientation meetings. To familiarize themselves with the Company’s manufacturing processes, new directors are encouraged to visit a Company design center and manufacturing facility, as reasonably practicable and within a reasonable amount of time after joining the Board. Reasonable and appropriate travel and other expenses related to new director orientations will be reimbursed by the Company.
- Ongoing Director Education. The Company is supportive of its directors visiting the Company’s design centers and manufacturing facilities, attending outside director education programs, and will, upon authorization of the Company Secretary reimburse directors for their reasonable expenses related to such.
- Reimbursement for Director Travel. The Company will reimburse directors for reasonable travel expenses in connection with their attendance at Board meetings, 8 any Board Committee meetings and general meetings of the Company. All other travel expenses must be pre-approved by the CEO, Board Chair or the Lead Independent Director.
- Evaluations. The Board, through the Nominating and Corporate Governance Committee and the Compensation Committee, oversees the process for the evaluation of the Board and the CEO on a periodic basis. The Board Committees each conduct periodic self-evaluations and the Nominating and Corporate Governance Committee will be responsible for overseeing the process for this evaluation. The responses are reviewed with the Nominating and Corporate Governance Committee and the Board. The Nominating and Corporate Governance Committee also periodically considers the mix of skills and experience that directors bring to the Board and assesses whether the Board has the necessary tools to perform its oversight function effectively.
- Other Committee Qualifications. The qualifications of individual Committee members are reviewed annually for compliance with the regulatory requirements, if any, mandated for the members of each particular Committee. The Nominating and Corporate Governance Committee recommends the members of the Committees to the Board and the Board appoints Committee members and Committee chairs in accordance with applicable law and according to criteria set forth in the applicable Committee charter and other criteria that the Board determines to be relevant to the responsibilities of each Committee.
- Committee Agendas. The Committee chairs and appropriate members of management, in accordance with the Committee’s charter and, as appropriate, in consultation with the Committee members, will determine the frequency and length of the Committee meetings. The Committee Chair, in consultation with management, prepares Committee agendas. Annual recurring events for each Committee are generally circulated each year and used as preliminary agenda items. All Committee members are free to include additional items on an agenda. Committee chairs will summarize Committee discussions and actions with the full Board.
- Access to Outside Advisors and Management. The Board and its Committees have the right, at any time, to obtain advice, reports or opinions from external financial, legal, accounting or other advisors or consultants at the Company’s expense to assist them in their duties to the Company and its shareholders. Board members will also have access to all members of management and employees of the Company, as needed to fulfill their duties..
- Communications with Directors. The annual general meeting provides an opportunity each year for the shareholders to ask questions of, or otherwise communicate directly with, members of the Board on matters relevant to the Company. In addition, shareholders and other interested parties may communicate with any or all of our directors, including the Board Chair, Lead Independent Director and/or the non-management or independent directors as a group, by transmitting correspondence by mail or by email as follows:
Board of Directors (or named Director)
c/o Company Secretary
38/39 Fitzwilliam Square
Dublin 2 Ireland
The Company Secretary shall transmit communications as soon as practicable to the identified director addressee(s), unless there are legal or other considerations that mitigate against further transmission of the communication, as determined by the Company Secretary. In that regard, certain items that are unrelated to the duties and responsibilities of the Board will not be forwarded by the Company Secretary, such as:
- business solicitations or advertisements;
- junk mail and mass mailings;
- new product suggestions;
- product complaints;
- product inquiries;
- resumes and other forms of job inquiries;
- spam; and
In addition, material that is unduly hostile, threatening, illegal or similarly unsuitable will be excluded, with the provision that the Board or individual directors so addressed are advised of any communication withheld for legal or other considerations as soon as practicable.
- Reporting of Concerns Regarding Accounting, Internal Controls or Auditing Matters. The Audit and Finance Committee has procedures in place to receive, retain and treat complaints received regarding accounting, internal accounting controls or auditing matters and to allow for the confidential and anonymous submission by anyone of concerns regarding questionable accounting or auditing matters. These procedures, including the contact information for the Ethics Helpline may be found on the Company’s website at http://www.seagate.com/about/investors/, under the “Ethics Helpline” tab.
- Interaction with Press and Others. The Board believes that management speaks for the Company. Each director should refer all inquiries from the press or others regarding the Company’s operations to management. Individual directors may, from time to time at the request of the management, meet or otherwise communicate with various constituencies that are involved with the Company. If comments from the Board are appropriate, they should, in most circumstances, come from the Board Chair or the Lead Independent Director. All external communications must be in compliance with the Company’s External Communications Policy 06-1060.
- Board Compensation Program. The Company attempts to maintain a fair and straightforward compensation program at the Board level, which is designed to be competitive with compensation programs from comparable companies.
- Director Compensation
The Company’s Compensation Committee reviews, recommends and administers the policies that govern the level and form of director compensation, with oversight from the independent directors and approval by the Board. The Company’s employees will not receive additional compensation for their service as directors.
The Company’s Compensation Committee believes that a substantial portion of the total director compensation package should be in the form of the Company ordinary shares and share equivalents in order to better align the interests of the Company’s directors with the long-term interests of its shareholders.
- Share Ownership
The Company has adopted Officer and Director Share Ownership Guidelines (“Guidelines”) requiring ownership (i) by non-employee directors of ordinary shares valued at four (4) times his or her annual cash retainer, measured quarterly based on the quarter closing share price and (ii) by the Company’s CEO, CFO and other Section 16 officers of ordinary shares in an amount equal to an applicable target value based on a multiple of annual salary. The Board periodically reviews and updates the Guidelines as the Board deems appropriate.
These guidelines should be interpreted and construed in the context of all applicable laws, the Company’s Constitution and other corporate governance documents.
The Company is committed to continuously reviewing and updating our policies, and the Company therefore reserves the right to amend these guidelines at any time, for any reason, subject to applicable law.
As adopted by the Board effective as of May 18, 2021.