Seagate Technology Corporate Governance Guidelines
The Board of Directors (the “Board”) of Seagate Technology 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, elected by shareholders, 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.
- Board Composition/Membership Criteria. The following describes how the Company determines the size of its Board and membership criteria.
- Board Size and Independence. Consistent with the Company’s Articles of Association, 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 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 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.
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 NASDAQ independence definition includes a series of objective tests, such as that the director is not an employee of the Company, or any parent or subsidiary of the Company, and has not engaged in various types of business dealings with the Company. 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, expertise and characteristics. The Nominating and Corporate Governance Committee will consider candidates’ professional experience, understanding of business and financial issues, ability to exercise sound judgment, diversity, leadership, and achievements and experience in matters affecting business and industry. Each director candidate should possess the highest character and integrity, experience and understanding of strategy, sufficient time to devote to Board matters, and no conflict of interest that would interfere with performance as a director. 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.
Chairperson of the Board. The Board generally believes that the offices of Chairperson and CEO should be held by separate persons, to aid in the oversight of management, unless it is in the best interests of the Company that the same person hold both offices.
Lead Independent Director. If the Chairperson of the Board 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 Chairperson of the Board is not present and each executive session, facilitates the CEO evaluation process, serves as liaison between the Chairperson of the Board 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.
- Service by Directors on Other Boards and Other Audit Committees.
Other Public Company Boards: Directors are required to advise the Chairperson of the Nominating and Corporate Governance Committee prior to joining the board of another public company so that any potential conflicts or other issues are carefully considered. Directors are generally limited to service on four (4) public company boards, in addition to service on the Company’s Board. Directors who currently serve as CEO of another public company are limited to service on one (1) public company board, in addition to service on the Company’s Board. In addition, no member of the Audit Committee of the Board (the “Audit Committee”) may serve on the audit 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 Committee. The Nominating and Corporate Governance Committee will specifically consider the impact on a director’s ability to discharge his or her duties to the Company and advise the Board. 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 the Company’s conflict of interest policies set forth in (i) Section II.E below, (ii) the Company’s Business Conduct Policy, (iii) the Company’s Policy and Procedures Governing Related Person Transactions, and (iv) the Company’s Articles of Association. These factors are considered in the individual director evaluation process.
Service by CEO on Other Boards: Our CEO is limited to service on one public company board, in addition to service on the Company’s Board. The CEO is required to advise the Nominating and Corporate Governance Committee prior to accepting an invitation to serve on the board of another public company. 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 Nominating and Corporate Governance Committee prior to accepting an invitation to serve on the board of another public or private 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 Chairperson of the Nominating and Corporate Governance Committee. If a director has a personal interest in a matter before the Board, the director must disclose the interest to the Board, excuse himself or herself from discussion, and abstain from voting, on the matter.
- Board Responsibilities. Shareholders elect the Board to oversee management and see that the interests of the shareholders are being served. Specifically, the Board performs several valuable functions described below.
- 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 CFO in the event of an unexpected occurrence.
- Advice and Counsel to Management. Advice 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 seeing 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 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 Ethics and directors are expected to adhere to the Code of Ethics.
- 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 his or her principal employment or business affiliation, a non-employee director shall promptly inform the Chairperson 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 so requested, such non-employee director is expected to promptly tender his or her resignation from the Board and all committees thereof in writing to the Chairperson 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 Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Members of the Audit, Compensation and Nominating and Corporate Governance Committees must meet the independence standards set forth in the NASDAQ Listing Rules 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.
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 four times per year in regularly scheduled meetings, but meets more often if necessary. The Chairperson of the Board presides at meetings of the Board, if present, or in his 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 Chairperson 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 Chairperson establishes a preliminary agenda for each Board meeting. Any director may request items to be included on the agenda. 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, also 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 reserves time at each regular Board meeting, 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” 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 Chairperson of the Board 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 stock 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 soon as reasonably practicable and within a reasonable amount of time after joining the Board. The Company reimburses new director orientation travel expenses.
- Ongoing Director Education. The Company is supportive of its directors attending outside director education programs, and will, upon authorization of the Chairperson of the Nominating and Corporate Governance Committee, reimburse directors for their reasonable expenses related to attendance at appropriate outside director education programs.
- Reimbursement for Director Travel. The Company will reimburse directors for reasonable travel expenses in connection with their attendance at Board meetings, any Board committee meetings, general meetings of the Company, or otherwise in connection with the business of the Company. All other travel expenses must be pre-approved by the Chairperson of the Board or the Lead Independent Director.
- Evaluations. The Board, through the Nominating and Corporate Governance Committee and 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 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 chairpersons 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 chairpersons 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 Chairperson, 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 chairpersons will summarize committee discussions and actions with the full Board.
- Outside Advisors and Access to Management. The Board and its committees have the right, at any time, to retain outside financial, legal, accounting or other advisors or consultants at the Company’s expense to assist in their duties to the Company and its shareholders. Board members also have free access to all members of management and employees of the Company, as necessary and appropriate in order to ensure that directors can ask any questions and receive all information necessary to perform 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 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:
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.
- 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
- Reporting of Concerns Regarding Accounting, Internal Controls or Auditing Matters. The Audit 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 Chairperson of the Board or the Lead Independent Director. All external communications must be in compliance with Policy 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 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 Board encourages directors to own shares of the Company. The Company has adopted Officer and Director Share Ownership Guidelines (“Guidelines”) requiring ownership 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. 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 Articles of Association 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.