2018 Guide to Effective Proxies

2.10 Board skills matrix | 167 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES KENNAMETAL INC. KEYCORP LOWE’S COMPANIES MARSH & MCLENNAN COMPANIES, INC. PROPOSALI.ELECTIONOFDIRECTORS Thefollowingtablehighlightseachdirector’s specificskills,knowledgeandexperience.A particular director may possessadditionalskills,knowledgeor experienceeventhoughthey are not indicatedbelow. Director Skills and Experience Matrix Davis DeFeo Dur Harvey Lambert McLevish Patel Rossi Stranghoener Wunning SKILLS/ EXPERIENCE Current or recent executiveexperience X X X X X X X X X X Publiccompany finance X X X X Capitalintensiveindustry X X X X X X X X X Publiccompany executivecompensation X X X X X X X X X Legal— Litigation X X X Legal— Transactions X X X X X X X X X RiskManagement X X X X X X X X Diversity X X X X X X X X X X Government / Military X X X X X X Technology/ Engineering X X X X X X X X Sales& Marketing X X X X X X X X X X Strategic Planning X X X X X X X X X X International X X X X X X X X X X Environmental/ Health/ Safety X X X X X X X X PublicCompanyBoardExperience X X X X X X X X 8 | K ENNAMETAL I NC .2017ProxyStatement PROPOSALONE:ElectionofDirectors TheNominatingandCorporateGovernanceCommitteeutilizesamatrixapproachthattrackseachdirector’sanddirector nominee’squalitiesandqualificationsinatabularformattoassistthecommitteeinmaintainingawell-rounded,diverse,and effectiveBoard.Inaddition,thematrixapproachhelpstheNominatingandCorporateGovernanceCommitteeidentifyany qualities,qualifications,andexperienceforpotentialdirectornomineesthatwouldhelpimprovethecompositionofandadd valuetotheBoard.TheNominatingandCorporateGovernanceCommitteeseeksdirectorswhohaveheldleadership positionsinpubliccompaniesandhaveexperienceinthebankingorfinancialindustry,cybersecurity,finance,marketing, mergersandacquisitions,publiccompanyexperience,regulatorymatters,retailandsmallbusiness,andriskmanagement. Thechartbelowdescribesthequalificationsandexperienceofournon-managementdirectorswhoservedontheBoard sincethe2017AnnualMeetingofShareholders. BankingandFinancialIndustry 6Directors Wevaluedirectorswhohaveexperienceinourindustry.TheFirst Niagaramergerallowedustoincreasethenumberofdirectors withexperienceinthebankingindustry. Cybersecurity 10Directors Werelyheavilyoninformationtechnologysystemstoconductour business.Asignificantportionofouroperationsreliesonthe secureprocessing,storage,andtransmissionofpersonaland confidentialinformation,suchasthepersonalinformationofour customers.Cybersecurityexperienceisanimportantskillthatwe valueinourdirectors. Finance 9Directors Weusenumerousfinancialmetricstomeasureourperformance andarealsorequiredtomaintaincertainminimumcapitalratios. Anunderstandingoffinanceandaccountingisanimportant qualificationforourdirectors.Severalofourdirectorsqualifyas “auditcommitteefinancialexperts”underSECregulations. Marketing 5Directors Weoperateinahighlycompetitiveindustry.Aswestrivetogrow organicallyandincreaseourmarketshare,havingdirectorswho havemarketingexperienceisimportanttous. MergersandAcquisitions 10Directors Weregularlyevaluatemergerandacquisitionandstrategic partnershipopportunities.In2016,wecompletedtheFirstNiagara merger,thelargestacquisitioninKey’shistory.Wevaluedirectors whohaveexperiencewithmergersandacquisitions. PublicCompanyExperience 11Directors Asapubliccompany,wearesubjecttoregulationsbythe SecuritiesandExchangeCommissionandtheNewYorkStock Exchange.Webelievethatdirectorswhohaveheldleadership positionsinapubliccompanypossessanunderstandingofthe regulationsandconsiderationsthatareuniquetoapublic company. Regulatory 6Directors Becausewearesubjecttospecializedregulationsasafinancial institution,wefinditvaluabletohavedirectorswithknowledgeof bankingregulations.OurBoardalsobenefitsfromhavinga directorwhoisaformerbankregulator. RetailandSmallBusiness 4Directors Weprovidebankingproductstoourcustomers,includingsmall businesses,throughournetworkofbranchesandATMs.We believethatdirectorswithretailandsmallbusinessexperience providevaluableinsightintoourretailbranchnetwork. RiskManagement 7Directors EffectivelymanagingriskandrewardisoneofKey’sstrategic priorities.InlightoftheBoard’sroleinoverseeingrisk managementandunderstandingthemostsignificantrisksfacing Key,havingdirectorswithriskmanagementexperienceis importanttous. TheNominatingandCorporateGovernanceCommitteeiscontinuallyintheprocessofidentifyingpotentialdirector candidates,andindividualBoardmembersareencouragedtosubmitanypotentialnomineetotheChairoftheNominating andCorporateGovernanceCommittee.Shareholdersmayalsosubmitpotentialdirectornomineesbyprovidingappropriate priorwrittennoticetotheSecretaryofKeyCorp.TheNominatingandCorporateGovernanceCommitteewillconsider suggestionsbyshareholdersconcerningqualifiedcandidatesforelectionasdirectors.Page64ofthisproxystatement includesimportantinformationforshareholderswhointendtosubmitadirectornominationforthe2019AnnualMeetingof Shareholders. 2 Board of Directors and Committees (Continued) Director Skills and Experience The chart below identifies the five principal skills that the Directors and Governance Committee considered for each director when evaluatingthat director’s experience and qualifications to serve as a director. In addition, the chart provides descriptions for each area of expertise. Additionalinformation about each director’s background, business experience and other matters, as well a description of how each individual’s experience qualifies him or her to serve as a director of the Company is provided under the heading “Item 1—Election of Directors” beginning on page 13. Skills and Experience Mr.Anderson Mr.Fanjul Mr.Glaser Mr.Hanway Ms.Hopkins Ms.LaRoche Mr.Mills Mr.Nolop Mr.Oken Mr.Schapiro Mr.Yates Mr.Yost Leadership Businessandstrategicmanagement experiencefromserviceina significantleadershipposition,such asachiefexecutiveofficer,chief financialofficerorothersenior leadershiprole. ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ Financial Backgroundandexperiencein finance,accounting,banking, capitalmarkets,financialreporting oreconomics. ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ Industry ExperienceintheCompany’s businessesandindustries, includinginsurance,insuranceand reinsurancebrokerage, consulting andhealthcare. ‹ ‹ ‹ ‹ ‹ ‹ International Internationalbackground orglobal experience,includingingrowth markets. ‹ ‹ ‹ ‹ ‹ ‹ ‹ Technology Experienceintechnology, innovationorcybersecurity, particularlyasaseniorexecutive. ‹ ‹ ‹ CorporateGovernance & Responsibility Experiencewithgovernance principlesorcorporate responsibilityinitiatives,including sustainabilityanddiversityand inclusion. ‹ ‹ ‹ ‹ ‹ GovernmentRelations & Regulatory Experiencewithgovernmentrelations, regulatorymattersorregulated industriesandpoliticalaffairs. ‹ ‹ ‹ ‹ ‹ ‹ RiskManagement Experienceinriskmanagement, strategicplanningorcompliance. ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ ‹ 6 Marsh&McLennanCompanies,Inc. NoticeofAnnualMeetingand2018ProxyStatement Proposal1:ElectionofDirectors IDENTIFYINGANDEVALUATINGDIRECTORNOMINEES TENUREOF INDEPENDENTDIRECTORS DIVERSITY BOARDSKILLS 6 2 10+ 6-9 1-5 5 YEARS AVERAGE 9 CURRENT ORFORMER CEOS CULTURALDIVERSITY LEADERSHIP 1 HISPANIC 2 AFRICAN- AMERICAN 3 WOMEN 2 FINANCIALEXPERTISE WEUSEABROADSETOFFINANCIALMETRICSTO MEASUREOURPERFORMANCE,ANDACCURATE FINANCIALREPORTINGANDROBUSTAUDITINGARE CRITICALTOOURSUCCESS.WESEEKTOHAVEA NUMBEROFDIRECTORSWHOQUALIFYASAUDIT COMMITTEEFINANCIALEXPERTS,ANDWEEXPECT ALLOFOURDIRECTORSTOHAVEANUNDERSTANDING OFFINANCEANDFINANCIALREPORTINGPROCESSES. 10 BUSINESSDEVELOPMENT/M&A WESEEKDIRECTORSWITHBUSINESSDEVELOPMENTAND ACQUISITIONEXPERTISEASWECONTINUETOGROWOUR BUSINESS INTHEEVOLVINGOMNI-CHANNELRETAIL ENVIRONMENT. 11 RETAIL ASANOMNI-CHANNELRETAILER,WESEEKDIRECTORS WHOPOSSESSANUNDERSTANDINGOFFINANCIAL, OPERATIONALANDSTRATEGIC ISSUESFACINGLARGE RETAILCOMPANIES. 7 BRANDMARKETING DIRECTORSWITHRELEVANTEXPERIENCE IN CONSUMERMARKETINGORBRANDMANAGEMENT PROVIDE IMPORTANT INSIGHTSTOOURBOARD. 7 GLOBALBUSINESS DIRECTORSWITHBROAD INTERNATIONALEXPOSURE PROVIDEUSEFULBUSINESSANDCULTURAL PERSPECTIVESTOOURBOARD. 6 IDENTIFYING AND EVALUATING DIRECTOR NOMINEES BoardNominationProcess TheNominatingandGovernanceCommittee,inconsultationwiththe ChairmanoftheBoardandChiefExecutiveOfficer,reviewseachdirector’s continuationontheBoardpriortohisorherrenominationtoserveonthe Board.TheNominatingandGovernanceCommitteeevaluateswhetheror notthedirector,baseduponhisorherskills,background,expertiseand contributiontotheBoard,iscapableofsupportingLowe’spresentand futureneeds.Aftertheevaluationofadirector,theChairpersonofthe NominatingandGovernanceCommitteeandtheChairmanoftheBoard informeachdirectorunderconsiderationoftheCommittee’sdecision. Additionally,withtheassistanceofanindependentsearchfirm,the NominatingandGovernanceCommitteeconductstargetedsearchesto identifywell-qualifiedcandidateswhomayhavedifferentskillsor backgroundsneededfortheCompanytoexecuteitsstrategicvision.Ifan independentsearchfirmisused,theNominatingandGovernance Committeeretainsthesearchfirmandapprovespaymentofitsfees. TheNominatingandGovernanceCommitteewillconsidernominees recommendedbyshareholders,anditsprocessfordoingsoisnodifferent thanitsprocessforscreeningandevaluatingcandidatessuggestedby directors,managementoftheCompanyorthirdparties.See“Shareholder Proposalsforthe2018AnnualMeeting”elsewhereinthisProxyStatement forthetimeframeforshareholderstoprovidenoticeofanynominationsof personsforelectiontotheBoardofDirectors. BoardCommitment TheBoardunderstandsthesignificanttimecommitmentinvolvedwith servingontheBoardanditscommittees,andittakesstepstoassessthatall directorsanddirectornomineeshavethetimenecessarytofulfilltheir duties.OurNominatingandGovernanceCommitteeandBoardonly nominatecandidateswhotheybelievearecapableofdevotingthenecessary timetosuccessfullymeettheirduties,takingintoaccountprincipal occupations,membershipsonotherboardsandotherresponsibilities. DirectorsmustadviseourChairmanoftheBoardandLeadDirectorpriorto joiningtheboardofanotherpubliccompany,oranyassignmenttotheaudit orcompensationcommitteeoftheboardofdirectorsofanypubliccompany ofwhichsuchdirectorisamember.Inaddition,directorsmustofferto resignfromtheBoardasaresultofchangestotheirprincipaloccupation, subjecttofurtherconsiderationbytheNominatingandGovernance Committee.TheNominatingandGovernanceCommitteeassessesdirectors’ timecommitmenttotheBoardthroughouttheyear,includingthroughthe annualself-evaluationprocess,anditdeterminedthatallofthedirector nomineesclearlydemonstratedthenecessarytimecommitmentinvolvedin servingonourBoardanditscommittees. Further,theNominatingandGovernanceCommitteeregularlyassesses andcloselymonitorsshareholders’viewsontheappropriatenumberof publiccompanyboardsonwhichdirectorsmayserve.Inconnectionwithits reviewin2016,theNominatingandGovernanceCommitteeconsidered: inputfromourshareholdersduringourengagementdiscussion;voting policiesofthemajorproxyadvisoryfirms;corporategovernanceguidelines adoptedbyotherpubliccompanies;boardtrendsatpeercompanies;and advicefromoutsideadvisors. NOTICEOFANNUALMEETINGANDPROXYSTATEMENT2017 7