Together with the Corporation's Certificate of Incorporation and By-Laws and the charters of the committees of the Board of Directors (the "Board"), these Guidelines set forth the governance policies and procedures of The Bank of New York Mellon Corporation (the "Corporation").
These Guidelines should be considered in the context of the Corporation's Directors' Code of Conduct. Directors must comply with the Directors' Code of Conduct.
The Corporation will publish these Guidelines, Board committee charters, and the Directors' Code of Conduct on its website, and will make paper copies available upon request.
The business and affairs of the Corporation are subject to the general oversight of the Board. The Board's duties and responsibilities are described below.
The Board's primary responsibility is to oversee the management of the Corporation in the interest of the Corporation and its stockholders. Directors will perform their duties in good faith and with that degree of care that a prudent person would normally use under similar circumstances.
Directors' oversight duties and responsibilities, which, as appropriate, may be discharged through Board committees, include:
Directors are expected to attend meetings of stockholders, the Board and the committees on which they sit.
It is important that the Corporation speak to employees and outside constituencies with a single voice and that the Corporation's designated officers serve as the primary spokespersons.
The Board, through the Human Resources and Compensation Committee, will oversee management's planning for succession of senior executive officers of the Corporation, with the involvement of the other independent directors in overseeing the succession planning for the most senior executive officers. To assist in this process, the CEO will periodically prepare and distribute to the Human Resources and Compensation Committee a report on succession planning for all senior officers of the Corporation. In addition, the CEO will prepare and periodically update a short-term succession plan for the delegation of authority to specified officers of the Corporation if some or all of the senior officers should unexpectedly become unable to perform their duties.
While the Human Resources and Compensation Committee has overall responsibility for executive compensation matters, as specified in its charter, the Committee will report its preliminary conclusions with respect to the performance evaluation and compensation decisions regarding the CEO to the other independent directors in executive session and solicit their input prior to finalizing the Committee's conclusions. The Committee will also advise and discuss with the other independent directors compensation decisions regarding the President and the process utilized by the Committee.
The Board will review its performance annually, taking into account its duties and responsibilities. The Chairman of the Corporate Governance and Nominating Committee will lead the Board's annual performance evaluation.
A slate of directors will be recommended by the Corporate Governance and Nominating Committee, nominated by the Board, and submitted to a stockholder vote each year. Stockholders may propose nominees for consideration by the Corporate Governance and Nominating Committee in accordance with procedures and other requirements set forth in the By-Laws and these Guidelines.
Directors serve until the next annual meeting of stockholders or their prior death, resignation or removal.
The Board has determined that imposition of a maximum period of service is not in the interest of the Corporation or its stockholders.
The Corporate Governance and Nominating Committee will consider for nomination persons who:
As set forth in the Charter of the Corporate Governance and Nominating Committee, the criteria for selecting nominees for election as directors of the Corporation shall include, but not be limited to, experience, accomplishments, education, skills, personal and professional integrity, diversity of the Board (in all aspects of that term) and the candidate's ability to devote the necessary time to service as a Director (including directorships held at other corporations and organizations). A person who is 75 years of age or older will not be nominated for election or re-election.
In considering diversity of the Board (in all aspects of that term), the Corporate Governance and Nominating Committee will take into account various factors and perspectives, including differences of viewpoint, professional experience, education, skill and other individual qualities and attributes that contribute to Board heterogeneity, as well as race, gender and national origin.
The majority of directors will be independent in accordance with the independence standards set forth below and applicable laws and regulations, including the listing standards of the New York Stock Exchange (the "NYSE") and Item 407(a)(3) of Regulation S-K. A director will be considered independent only if the Board has affirmatively determined that the director has no direct or indirect material relationship with the Corporation that would impair his or her independent judgment.
The Board will review factors affecting independence at the time a director is nominated for election or re-election. In making independence determinations, the Board will apply the following guidelines.
A director is not independent if:
For purposes of these standards, a "family member" includes a director's spouse, parents, children, siblings, mothers-in-law, fathers-in-law, sons-in-law, daughters-in-law, brothers-in-law, sisters-in-law and anyone (other than domestic employees) who shares the director's home.
A director will be deemed not to be independent if the Board finds that the director has material business arrangements with the Corporation that would jeopardize his or her judgment. In making independence determinations, the Board will review business arrangements between (a) the Corporation and the director, and (b) the Corporation and an entity for which the director serves as an officer or general partner, or of which the director directly or indirectly owns 10 percent of the equity. Such arrangements will not be considered material if:
In applying the factors listed in (a) through (d), above, the Board may consider such other factors as it may deem necessary to arrive at sound determinations as to the independence of each director, and such factors may override the conclusion of independence or non-independence that would be reached simply by reference to the enumerated facts. In such cases, the basis for independence determinations will be disclosed in the Corporation's Annual Proxy Statement.
A Lead Director shall be selected annually from among the independent directors by a majority of the independent directors.
In addition to the other duties and responsibilities of the Lead Director set forth in these Guidelines or the By-Laws of the Corporation, the Lead Director shall have the following duties and responsibilities:
The Corporation values the experience directors bring from other boards on which they serve but recognizes that such service may also entail significant time commitments, conflicts or legal issues. Directors should advise the Chairman of the Board and the CEO as well as the Corporate Secretary before accepting a position on the board of directors of another publicly traded company or making any other significant commitment to any business or governmental body beyond the primary occupations in which they were engaged at the time of their most recent election to the Board. They should accept such a position or make such a commitment only after obtaining the consent of the Corporate Governance and Nominating Committee of the Board. Upon receipt of such notice, the Chairman of the Corporate Governance and Nominating Committee shall consult with the Chairman of the Board and the CEO and the Company's General Counsel on such matters prior to the Committee's determination. It is suggested that directors usually not serve on the boards of more than three publicly traded companies in addition to the Corporation. In making its determination, the Corporate Governance and Nominating Committee may take into account any and all factors it deems to be relevant, including without limitation whether the director in question is currently employed or retired from full-time employment, the number of other public-company boards of which the director is a member, any actual or potential conflicts of interest and the director's other commitments.
The Board normally holds six regular meetings per year. Subject to notice to the contrary, regular Board meetings will be held on the second Tuesday of even numbered months.
A special meeting of non-management directors or independent directors may be held at the discretion of the Lead Director.
In the event of the death or disability of the Chairman or CEO, a special meeting of the Board will be held as soon as practical at a date and time to be determined by the Lead Director. The Lead Director will preside at such meeting.
The Chairman and CEO is responsible for the agendas for the Board meetings. In consultation with, and with input from, the Lead Director, the Chairman and CEO will prepare an agenda for each meeting and cause it to be distributed to Board members in advance of the meeting. Board members may suggest any items for inclusion on the agenda
Information and materials should be transmitted to each director, to the extent practicable, in advance of the Board meeting to which they relate. When time constraints or exceptional circumstances preclude advance distribution, written materials may be distributed at the meeting.
Non-management directors will hold an Executive Session without management at each regularly scheduled Board meeting. The Lead Director will preside over executive sessions of non-management directors. At least one such meeting each year will be attended only by independent directors.
To foster open discussions, the proceedings and deliberations of the Board are confidential. Each director will maintain the confidentiality of non-public information received from the Corporation or its advisors.
Management will communicate regularly with directors, who may also consult with other employees and independent advisors, such as independent auditors and outside counsel, as the Board or its committees deem appropriate, the fees of such advisors and the expenses of such consultation to be borne by the Corporation.
In performing his or her duties, a director is entitled to rely in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Board by any of the Corporation's officers or employees or committees of the Board, or by any such other person as to matters the director reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
The Board will have such committees as may be required by the Corporation's By-Laws — which will include all committees required by the rules of the NYSE — and may appoint such additional committees as the Board may determine to be necessary or convenient for the conduct of its responsibilities.
The Corporation will comply fully with all legal and regulatory requirements concerning the composition, responsibilities and procedures applicable to any committee of the Board, including those applicable to the Audit, Corporate Governance and Nominating, and Human Resources and Compensation Committees.
Each of the Audit Committee, the Corporate Governance and Nominating Committee, and the Human Resources and Compensation Committee, and any other committee required by legal or regulatory requirements, will be composed of at least three members, and all members of these committees will be independent directors.
Independent Directors are expected to serve on one or more committees of the Board.
Directors serving on certain Board committees may also be required to have other qualifications as specified in the relevant committee charters. In particular, members of the Audit Committee must meet all applicable independence requirements and must satisfy the NYSE requirements for (i) financial literacy and (ii) accounting or related financial management expertise; in addition, at least one Audit Committee member will qualify as an "Audit Committee Financial Expert" under the SEC's rules.
The Corporate Governance and Nominating Committee will periodically consider possible changes in committee assignments while maintaining flexibility, so that each committee includes directors with the requisite expertise and experience to fulfill its duties and responsibilities, and will recommend changes in committee assignments to the Board as it deems appropriate.
The agenda for each regular meeting of all standing committees of the Board will be furnished to all directors in advance of the meeting. All directors are invited to make suggestions to the committee chairman for additions to the agenda or to request that an item from a committee agenda be considered by the Board. Directors not serving on a committee who have a particular interest in an agenda item for that committee are encouraged to express their views to the committee chairman. The chairman of each committee will report regularly to the Board on matters discussed and actions taken by the committee.
There will be an annual evaluation (which may be a self-evaluation) of the performance of all standing committees of the Board, the results of which will be reported to the full Board.
Each newly elected director will participate in an orientation program that will include a review of the Corporation's financial position and recent financial results, risk management program, internal audit program, compliance program, Directors' Code of Conduct, Code of Conduct for employees, business plan (focused on key businesses and business objectives), and Board procedures as presented by the Corporation's Chairman, CEO, President, Chief Financial Officer, General Counsel, Chief Risk Officer, Chief Auditor, Director of Human Resources, Secretary, and other senior executives.
The directors will receive additional information about these subjects through their regular meetings, meeting materials, presentations at meetings, and copies of corporate organizational documents, periodic filings, and significant presentations made to analysts and investors.
The Secretary of the Corporation is authorized to open and review any mail or other correspondence received that is addressed to the Board or any individual director unless the item is marked "Confidential" or "Personal." If so marked and addressed to the Board, it will be delivered unopened to the Lead Director. If so marked and addressed to an individual director, it will be delivered to the addressee unopened. If, upon opening an envelope or package not so marked, the Secretary determines that it contains a magazine, solicitation or advertisement, or is of a general nature not specifically related to the Corporation's business, the contents may be discarded.
The Corporation will maintain, and will publish on its website and in its annual proxy statement, a method for interested parties to communicate with the non-management directors as a group or with the Lead Director.
Compensation for non-management directors' services may include annual cash retainers, shares of the Corporation's common stock, deferred stock units or options on such shares; meeting fees; fees for serving as a committee chairman or Lead Director; and fees for serving as a director of a subsidiary of the Corporation. The Corporation will also reimburse directors for their reasonable out-of-pocket expenses, using the principles set forth in the Corporation's policy on executive officer travel and entertainment. Directors are reimbursed for their travel expenses not exceeding, in the case of air fare, the first-class commercial rate. In addition, corporate aircraft and charter aircraft may be used for directors in accordance with the Corporation's Aircraft Policy. Directors will also be reimbursed as provided above for reasonable out-of-pocket expenses (including tuition and registration fees) relating to attendance at seminars and training sessions relevant to their service on the Board and in connection with meetings or conferences which they attend at the Corporation's request.
The Corporate Governance and Nominating Committee will periodically review director compensation and make recommendations to the Board. Such compensation should be consistent with market practice and should align directors' interests with those of long-term stockholders while not calling into question directors' objectivity.
Unless and until amended by the Board on the recommendation of the Corporate Governance and Nominating Committee, the compensation of non-management directors for service on the Board and on standing committees of the Board shall be as follows:
In addition, non-management directors who are members of any special committee of the Board will receive a per meeting fee of $1,800, and each non-management director will receive an annual stock award in an amount to be determined by the Board on the recommendation of the Corporate Governance and Nominating Committee. On the recommendation of the Corporate Governance and Nominating Committee, the Board may also approve other fees for non-management directors, including retainers for the chairman of any special committee of the Board.
By the fifth anniversary of their service on the Board, directors are required to maintain ownership of shares of the Corporation's common stock with a market value of at least five times the annual cash retainer.
Management may exercise any and all authorities as set forth in the By-Laws. Management is authorized to implement plans, make expenditures, and acquire or dispose of assets consistent with the annual operating plan and the annual capital expenditures plan approved by the Board.
All expenditures for fixed assets (whether purchased or leased and whether to be paid directly by the Corporation itself or through any subsidiary) should be authorized in the annual capital expenditures plan approved by the Board. Any such expenditure that would, either individually or when aggregated with related transactions, exceed one percent of the total shareholders' equity of the Corporation as shown on the most recently published balance sheet must be approved by the Board.
All acquisitions and dispositions of assets (whether by the Corporation itself or through any subsidiary) — other than (i) acquisitions and dispositions in the normal course of business, (ii) acquisitions and dispositions of assets that are being or have been acquired through foreclosures or other proceedings on account of loans previously made and (iii) acquisitions of the stock or assets of other entities (addressed below) — that would, either individually or when aggregated with related transactions, exceed one percent of the total shareholders' equity of the Corporation as shown on the most recently published balance sheet, and all acquisitions or other capital commitments that would represent the Corporation's entry into a significant new line of business, must be approved by the Board.
If approved by the CEO, acquisitions (either through the Corporation or any subsidiary) of the stock or assets of other entities may be made, without specific approval by the Board, in an amount not to exceed, in any such case, one percent of the total shareholders' equity of the Corporation as shown on the most recently published balance sheet, provided, however, that Board approval must be obtained if the acquisition represents the Corporation's entry into a significant new line of business.
If approved by the CEO or the Chief Financial Officer ("CFO"), capital contributions to new or existing subsidiaries of the Corporation may be made, without specific approval by the Board, in an amount per transaction not to exceed two percent of the total shareholders' equity of the Corporation as shown on the most recently published balance sheet, provided, however, that Board approval must be obtained if the capital contribution represents the Corporation's entry into a significant new line of business. Extensions of credit may be made by the Corporation to new or existing subsidiaries of the Corporation, without specific approval by the Board, upon such terms and conditions as the CEO, the President, the CFO, the Controller, the Treasurer, any Senior Vice Chairman, any Vice Chairman or any Senior Executive Vice President of the Corporation (the "Authorized Officers") or any other person designated in writing by any Authorized Officer may in his or her discretion approve. Notwithstanding the foregoing, Board approval shall not be required for internal reorganizations involving solely and exclusively the Corporation and/or one or more of its subsidiaries unless such internal reorganization would result in a material change in the overall risk profile of the Corporation and its subsidiaries taken as a whole. Management shall report to the Board on such internal reorganizations at the next regular meeting of the Board following completion of any such internal reorganization.
Expenditures, consideration, payments and other amounts referred to in this section include the total of all payments to be made or received and the liabilities to be assumed, directly or indirectly.
Management may exercise any and all additional authorities as the Board may from time to time approve by resolutions duly adopted.
Approved: December 10, 2013