Governance FAQs

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What do you look for in a Board member?

We look for the most qualified candidate. Breadth of experience, the ability to make independent, analytical inquiries and diversity of viewpoints are some of the items we consider. We have diversity on the board, both in terms of gender and race, and in terms of experience and views. The board’s current size is within the desired range as stated in the board’s Corporate Governance Guidelines.

Why don’t your board members have term limits?

The board maintains a retirement age of 70 for directors. The board from time to time considers whether to institute term limits but to date has concluded that term limits would result in the loss of directors who have developed, over a period of time, an in-depth understanding of the company’s technically-oriented markets, customers and competition, which makes them more capable of assessing and advising with regard to strategic objectives and operations.

Why doesn’t the board have a lead director as recommended by corporate governance experts?

The NYSE listing requirements require companies to name a lead director to chair executive sessions of the board or to describe the process by which a lead director would be chosen.

We do the latter. The lead director for a particular session will depend on the primary issue being discussed. For example, if the primary topic of the executive session were CEO pay, then the Chair of the Compensation Committee would lead. If the primary topic were a corporate governance issue, then the Chair of the Governance & Stockholder Relations Committee would lead. This approach more fully engages all directors and provides leadership opportunities for multiple independent directors.

Why doesn’t the board have an independent chairman?

The board has no fixed policy on whether the roles of chairman and chief executive officer should be separated or whether there should be an independent chairman. Instead, the board believes it is in the best position to determine the leadership structure that serves the Company best at any given time, and it should maintain the flexibility to change that structure, as it has done in the past.

Currently the board believes that having Rich serve as both CEO and chairman is appropriate. Rich’s leadership ability and concern for TI and its stockholders’ best interests have been evident to the non-management directors during Rich’s time on the board. The board is confident in Rich’s ability to effectively serve in both roles.

All non-management directors share responsibility for setting the board's agenda. A portion of each executive session is spent deciding on topics for future meetings. Each director has an equal stake in the board's actions and equal accountability to the corporation and its stockholders. This egalitarian dynamic creates an environment of equal influence and authority.

Do your Audit Committee members have "financial expertise"?

The board has determined that all members of the Audit Committee are financially literate and have financial management expertise. Each member of the Audit Committee has an understanding of generally accepted accounting principals and experience analyzing and evaluating financial statements for large, complex organizations.

Do you have a "financial expert" on the Audit Committee?

The board has designated Pam Patsley as TI's audit committee financial expert as defined by the SEC’s rules.

Early in her career Patsley served as a CPA. More recently, she was a senior executive vice president of First Data Corporation and president of its subsidiary First Data International and in those roles she had experience assessing and evaluating financial statements. She also is active in furthering her expertise by participating in a network composed of audit committee chairmen from several Fortune 500 companies.

What means do you have for someone to bring accounting and financial reporting concerns to the attention of management?

We have had an Ethics Office for almost 20 years. Through this office, any employee anywhere in the world can raise an issue on any subject and remain anonymous if they wish. The Ethics Director will involve the right people to investigate and address the issue.

In addition, we have an accounting and audit hotline that allows anyone to communicate a concern regarding an accounting, internal accounting controls or auditing matter to the Audit Committee of TI's board of directors.

Why did you allow your "poison pill" or anti-takeover measure to expire?

The board decided it was in the best interests of TI at this time. Ten years ago, when the TI plan was adopted, these types of programs were popular in corporate America. Today, they have fallen out of favor and many companies are not renewing the programs as they come due. After examining the corporate governance environment today, the board determined that a standing program of this type was not needed at this time.

Why did TI change to majority voting for directors?

The board decided to amend the company’s by-laws to change the voting standard of the election of directors from a plurality to a majority vote. Under the plurality standard, director candidates with the most votes cast for them are elected, even if the total number of votes cast is less than a majority. Under the majority standard applicable to the company’s director elections, a director must receive the affirmative vote of a majority of the shares represented in person or by proxy at an annual meeting.

The board believes the change to a majority vote standard appropriately gives stockholders a greater voice in the election of the directors of the Company.