CORPORATE GOVERNANCE PRINCIPLES
General Mills has a long-standing commitment to good corporate governance practices. These practices provide an important framework within which our Board of Directors and management can pursue the strategic objectives of General Mills and ensure its long-term vitality for the benefit of stockholders. Our corporate governance principles and practices have evolved over many years. The Corporate Governance Committee reviews them annually, and changes are recommended to the Board for approval as appropriate.
Election of Directors. Stockholders elect directors annually. The Board believes that meaningful stockholder participation is critical to the election of directors. Our directors are elected by a majority of votes cast. If an incumbent director is not re-elected, the director must promptly offer his or her resignation to the Board. The Corporate Governance Committee will recommend to the Board whether to accept or reject the resignation, and the Board will disclose its decision and the rationale behind it within 90 days from the certification of the election results. When there are more director nominees than the number of directors to be elected, the directors will be elected by a plurality of the votes cast.
Board Size. The Board periodically reviews the number of director positions with the intent of keeping the Board small enough to promote substantive discussions in which each director can actively participate, and large enough to offer a diversity of background and expertise. Our bylaws currently provide that the Board shall have no fewer than seven directors and no more than 15 directors.
Board Composition. The Corporate Governance Committee is responsible for recommending candidates for election to our Board of Directors. The Corporate Governance Committee considers the Board's overall composition when it selects candidates. Overall Board composition guidelines require expertise in fields relevant to the business of the Company; a breadth of experience from a variety of industries and professional disciplines; a diversity of gender, ethnicity, age and geographic location; and a range of tenures on the Board to ensure both continuity and fresh perspective. Final approval of director candidates is determined by the full Board, based on the recommendation of the Corporate Governance Committee.
Director Selection Criteria. Well-defined selection criteria for individual directors require independence, integrity, experience and sound judgment in areas relevant to our businesses, a proven record of accomplishment, willingness to speak one's mind and commit sufficient time to the Board, appreciation for the long-term interests of stockholders and the ability to challenge and stimulate management and to work well with fellow directors. The Corporate Governance Committee reviews whether a potential candidate meets Board and/or committee membership requirements imposed by law, regulation or stock exchange rules, determines whether a potential candidate is independent according to standards for evaluating director independence and evaluates the potential for any conflict of interest between the director and General Mills.
Other Board Service. Board members are expected to devote sufficient time and attention to carrying out their director duties and responsibilities and ensure that their other responsibilities, including service on other boards, do not materially interfere with their responsibilities as directors of the Company. Directors must inform the Chair of the Corporate Governance Committee in advance of becoming a director and/or member of the audit committee of any other public company. The Board will take into account the nature and extent of the director's other commitments when determining whether it is appropriate to nominate that individual for re-election. Subject to a determination by the Board that additional service will not impair the ability of a director to serve effectively on the Company's Audit Committee, a member of the Audit Committee should not serve on more than two other audit committees for public companies.
Director Independence Criteria. The Board believes that a substantial majority of its members should be independent, non-employee directors. The Board has established the following guidelines that are consistent with the current listing standards of the New York Stock Exchange for determining director independence:
Affiliations with the Company. Director affiliations and transactions are regularly reviewed to ensure there are no conflicts or relationships that might impair a director's independence from the Company, senior management and our independent registered public accounting firm.
Director Retirement. To ensure an appropriate balance between new perspectives and experienced directors:
The Corporate Governance Committee uses a variety of sources to identify director candidates. From time to time, the Committee retains a recruitment firm to assist in identifying, evaluating and recruiting director candidates, based on specified criteria, and pays the firm a fee for these services. Suggestions also are received from Board members and stockholders. Director candidates recommended to the Corporate Governance Committee are subject to full Board approval and election by stockholders at an annual meeting of stockholders.
Stockholders who wish to suggest an individual for consideration for election to our Board of Directors may submit a written nomination to the Corporate Secretary, General Mills, Inc., P.O. Box 1113, Minneapolis, Minnesota 55440, along with the stockholder's name, address and the number of General Mills shares beneficially owned; the name of the individual being recommended and number of General Mills shares beneficially owned by the candidate; the candidate's biographical information describing experience and qualifications; a description of all agreements, arrangements or understandings between the stockholder, any beneficial holder of the stock and the individual being recommended, including all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years; and the candidate's consent to serve as a director, if elected. To assist in the evaluation of stockholder-recommended candidates, the Committee may request that the stockholder provide certain additional information required to be disclosed in our proxy statement under Regulation 14A of the Securities Exchange Act of 1934.
The Committee will consider and evaluate stockholder-recommended candidates by applying the same criteria used to evaluate director-recommended candidates. If the Committee decides the candidate is suitable for Board membership, the Committee will make a recommendation to the Board of Directors for its approval to include the candidate in the slate of directors nominated for election by stockholders in the proxy statement.
Under our bylaws, stockholders may also nominate a candidate for election at an annual meeting of stockholders. Our annual meeting is typically held on the fourth Monday in September. Stockholders who intend to present a nomination at our annual meeting are required to notify the Corporate Secretary in writing and provide the information described above 90 to 120 days preceding the anniversary of the preceding year's annual stockholders' meeting. Director nominees submitted through this process will be eligible for election at the stockholder meeting, but will not be included in proxy materials sent to stockholders prior to the meeting.
These director nomination processes will not affect the rights of stockholders to request inclusion of nominees in our proxy statement pursuant to Rule 14a-11 under the Securities Exchange Act of 1934 or any successor rule regarding director nominations.
Attendance at Meetings. Directors are expected to attend all Board and committee meetings, as well as the annual stockholders' meeting, absent exigent circumstances.
Meeting Agendas and Materials. Board meeting and background materials sent to directors in advance of
meetings focus on our key strategic, leadership and performance issues.
Access to Independent Advisors and Management. The Board and its committees may engage independent outside financial, legal and other advisors as they deem necessary to provide advice and counsel on various topics or issues. Directors also have full access to officers and employees.
Board Leadership. The Chairman of the Board is appointed by the Board upon the recommendation of the Corporate Governance Committee. The Chairman leads the Board and oversees Board meetings and the delivery of information necessary for the Board's informed decision-making. The Chairman also serves as the principal liaison between the Board and our management. The Board determines whether the role of the Chairman and the CEO should be separated or combined based on their judgment as to the structure that best serves the interests of the Company. Currently, the Board believes that the positions of Chairman and Chief Executive Officer should be held by the same person as this combination has served and is serving the Company well by providing unified leadership and direction.
When the Chairman and Chief Executive Officer roles are combined, an independent director acts as the lead director and presides at all Board meetings at which the Chairman is not present, including executive sessions of the Board; sets the agenda for all executive sessions and calls meetings of the non-employee directors, as required; serves as a liaison between the Chair and the non-employee directors; approves Board meeting agendas and consults with the Chairman on information provided to the Board; approves meeting schedules to assure that there is sufficient time for discussions; acts as principle Board contact for crisis management and other significant corporate events; collaborates with the Chair of the Corporate Governance Committee to conduct Board self-evaluations; addresses issues of director performance and Board effectiveness; and serves as Board representative for consultation and direct communication with major stockholders on issues that the Board determines may not be addressed by the Chairman or other Board designees and as otherwise deemed appropriate by the Board. When the Chairman and Chief Executive Officer roles are separated, and an independent director serves as Chairman, then he or she will act as lead director.
Executive Sessions. Non-employee directors have the opportunity to meet in executive session without management directors present at each Board meeting.
CEO Performance Evaluation. At least annually, the Chair of the Compensation Committee leads an executive session of the Board where non-employee directors meet formally without management directors present to evaluate the Chief Executive Officer's performance. This executive session includes a review of the Chief Executive Officer's annual accomplishments, compensation and performance objectives for the next fiscal year. In advance of the meeting, a formal Chief Executive Officer evaluation is conducted that includes input from all non-employee directors. Following the executive session, the Chair of the Compensation Committee communicates the results of the evaluation to the Chief Executive Officer.
Corporate Governance Procedures. The Corporate Governance Committee has responsibility for corporate governance and Board organization and procedures. The Corporate Governance Committee actively monitors and discusses evolving corporate governance trends. It reviews our corporate governance practices in light of those trends and implements those practices that it determines are in the best interests of the Company and consistent with our long-standing commitment to good corporate governance practices.
Board Evaluations. A formal Board evaluation covering Board operations and performance, with a written evaluation from each non-employee director, is conducted annually to enhance Board effectiveness. Recommended changes are considered by the full Board. In addition, each Board committee conducts an annual self-evaluation.
Director Orientation and Education. New directors participate in an orientation program that includes discussions with senior management, background materials on our strategic plan, organization and financial statements and visits to our facilities. Management and outside experts regularly make presentations to the Board on issues relevant to our industry and business, corporate governance trends and other topics of interest to the directors. We encourage each director to participate in continuing educational programs that are important to maintaining a director's level of expertise to perform his or her responsibilities as a Board member, and we reimburse directors for the cost of attending these programs.
Director Code of Conduct. The Board expects all directors, officers and employees to act with the highest standards of integrity and adhere to our policies and applicable code of conduct. Directors also are required to follow our Director Code of Conduct. The Corporate Governance Committee of the Board annually reviews and oversees compliance with the Director Code of Conduct.
Stockholder Representation. Each director is expected to represent the interests of all stockholders, and not those of any particular stockholder or any special interest group.
Director Compensation. A substantial portion of director compensation is linked to our stock performance, and directors can elect to receive their entire Board remuneration in stock and stock-related compensation. Directors are expected to keep all of the net shares they receive as compensation until they own shares equal in market value to at least five times their annual retainer. The Compensation Committee is responsible for periodically reviewing Board compensation and recommending changes.
Performance-Based Compensation. The Board supports and oversees employee compensation programs that are closely linked to business performance and emphasize equity ownership, including stock ownership targets, for key management employees.
Stockholder Communications. Senior management meets regularly with major institutional investors and stockholders, and reports to the Board on analyst and stockholder views of General Mills. We annually engage with these investors' policy and proxy voting teams in order to address concerns on issues such as emerging governance and executive compensation practices.
Advisory Vote on Compensation.In order to augment the existing year-round program of investor communication and interaction, the Board will sponsor an advisory vote on the Company's executive compensation at every annual meeting of the stockholders.
The Board's role in risk management
Committee performance and operations
Committee Assignment and Rotation. All Board committees, except the Executive Committee, are composed
entirely of independent, non-employee directors.
Our Audit Committee is made up of independent, non-employee directors. Each member is an independent director under our guidelines and as defined by the New York Stock Exchange listing standards for Audit Committee membership. Each member also meets the independence standards for audit committee membership under the rules of the Securities and Exchange Commission. The Committee:
Our Compensation Committee is made up of independent, non-employee directors under our guidelines and as defined by the New York Stock Exchange listing standards. The Committee:
Corporate Governance Committee
Our Corporate Governance Committee is made up of independent, non-employee directors under our guidelines and as defined by the New York Stock Exchange listing standards. The Committee:
When appointed by the Board, the Committee:
The Board has not appointed an Executive Committee for fiscal 2009.
Our Finance Committee is made up of independent, non-employee directors under our guidelines and as defined by the New York Stock Exchange listing standards. The Committee:
Public Responsibility Committee
The Public Responsibility Committee is made up of independent, non-employee directors under our guidelines and as defined by the New York Stock Exchange listing standards. The Committee:
Communications with the Board
Interested parties may directly contact any of our directors, any committee of the Board, the Board's non-employee directors as a group, the lead director, or the Board generally, by writing to them at General Mills, Inc., P.O. Box 1113, Minneapolis, Minnesota 55440 or via e-mail at email@example.com. The Board of Directors has instructed the Corporate Secretary to distribute communications to the director or directors, after ascertaining whether the communications are appropriate to duties and responsibilities of the Board. The Board has requested that the Corporate Secretary not forward the following types of communications: general surveys and mailings to solicit business or advertise products; job applications or resumes; product inquiries or complaints; new product suggestions; or any material that is threatening, illegal or does not relate to the responsibilities of the Board.
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