2018 Guide to Effective Proxies

2.16 Risk oversight | 227 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES S&P GLOBAL, INC. BOARDOFDIRECTORSANDCORPORATEGOVERNANCE(continued) positionofChairmanoftheBoardhasbeenheldbyanindependentdirectorsince2015.TheBoardwillcon- tinuetoperiodicallyevaluatewhetherthestructureisinthebestinterestsofshareholders. IndependentChairmanRole ✔ ApprovesagendasforBoardmeetings. ✔ ServesasaliaisonandfacilitatesdialoguebetweenindependentdirectorsandtheChiefExecutiveOfficer. ✔ KeepsindependentdirectorsinformedbetweenBoardmeetings. ✔ LeadsannualevaluationsoftheChiefExecutiveOfficerwiththeChairoftheCompensationandLeadershipDevelopmentCommittee. ✔ OverseestheNominatingandCorporateGovernanceCommittee’sadministrationofannualBoardandDirectorevaluations. ✔ Chairsexecutivesessionsofindependentdirectors. RoleofBoardofDirectorsinRiskOversight TheBoardhasoversightresponsibilityfortheCompany’sriskmanagementframework,whichisdesignedto identify,measure,assess,prioritize,mitigate,monitorandcommunicaterisksacrosstheCompany’soperations, andfosteracorporatecultureofintegrityandriskawareness. BoardofDirectors The full Board’s oversight responsibility for the Company’s overall riskmanagement framework includes: Interactingwith andmonitoring the actions being taken by seniormanagementwith respect to risk assessment and riskmitigation of the Company’s top risks. Tasking designated committees of the Boardwith certain categories of riskmanagement and evaluating regular reports from the committees on risk-relatedmatters fallingwithin each committee’s oversight responsibilities. AuditCommittee Reviewsanddiscusses withmanagement the Company’s riskmanagement process, including its risk governance frameworkand riskmanagementpractices, risks related to financial reportingand the effectivenessof the Company’s internal control environment, including technologyand cybersecurity risks,and compliancewith legal and regulatory requirements. Compensation Leadership andDevelopment Committee Assesses risks related to compensationpoliciesand practices, including incentive-related risks,and oversees risksassociated with talentmanagement and successionplanning with theNominatingand CorporateGovernance Committee. FinancialPolicyCommittee Overseesandassesses financial risks, including risks related to the Company’s financial position, capitalallocation philosophy,dividendpolicy, share repurchasepolicy, capitalexpenditure program,and the financing andpost-completion performanceof significant transactions, including acquisitions. NominatingandCorporate GovernanceCommittee Overseesandassesses risks related to theCompany’s corporategovernance practices, including reviewingemergency successionplanning,Board andCommittee performanceevaluations, andnominatingdirector independenceand related party transactions. 12 2018ProxyStatement SALLIE MAE “SLM CORP” RiskOversight The Board of Directors and its committees oversee Sallie Mae’s overall strategic direction, including setting risk managementphilosophy,toleranceandparameters,andestablishingproceduresforassessingtherisksofeachbusinessline aswell asthe riskmanagement practices themanagement teamdevelops andutilizes.Management escalates totheBoard ofDirectors anditscommittees anysignificant departures fromestablished tolerancesandparameters andreviewsnewand emerging risks. Throughout the year, the Board of Directors and its committees dedicate a portion of their meetings to reviewinganddiscussingspecificrisktopicsingreaterdetailwithseniormanagement,includingrisksrelatedtocybersecurity. TheprimaryriskoversightresponsibilitiesofeachofthestandingcommitteesoftheBoardofDirectorsareasfollows: BoardCommittee PrimaryOversightResponsibilities AuditCommittee • developmentoffinancialstatementsandperiodicpublicreports; • sufficiencyofinternalcontrolsoverfinancialreportinganddisclosurecontrols; • engagementof,andcommunicationswith,ourindependentregisteredaccountingfirm; and • operationofinternalauditfunction,staffing,andworkplan. Nominations,Governanceand CompensationCommittee • all compensation and benefits for our Chief Executive Officer, Named Executive Officers,andindependentdirectors; • equity-basedcompensationplans; • management’sadministrationofemployeebenefitplans; • managementsuccessionplanning; • confirmourincentivecompensation practicesproperlybalanceriskandrewardanddo notpromoteexcessiverisk-taking; • implement good governance policies and measures for Sallie Mae and our Board of Directors; • recommendnomineesforelectiontotheBoardofDirectors; • conductassessmentsoftheperformanceofourBoardofDirectorsanditscommittees; and • reviewrelatedpartytransactions. RiskCommittee • monitor our major risk categories, including credit, funding and liquidity, market, compliance, legal, operational, and reputational, as well as our risk management capabilities, including those related to information security, crisis preparedness, business continuity, and disaster recovery plans (which responsibilities include oversightoftheCompany’scybersecurityrisk,profileassessments,andmonitoring,as wellasreviewingtheCompany’sstrategytomitigatecybersecurityrisks); • review, approve, and authorize the terms and conditions of any loan securitization transaction,loansale,ordebttransactionofourCompanyorouraffiliates; • review our risk management framework and supporting governance structure, roles, andresponsibilitiesestablishedbymanagement; • facilitate the distribution of risk-related information provided to the Risk Committee across and among the Board of Directors and its other committees, including cybersecurityandotherinformationsecurityissues,risksandthreats;and • reviewourriskappetiteandconductregularreviewsofkeyriskmeasures. StrategicPlanningCommittee • engage the Chief Executive Officer and senior management in the strategic planning process and recommend proposals regarding the Company’s long-term strategic initiatives. PreferredStockCommittee • monitor and evaluate our business activities in light of the rights of holders of the Company’spreferredstock. 14 Total of 02 pages in section SHUTTERFLY CORPORATEGOVERNANCE recommendingthatourBoardestablishspecial committeesasmaybenecessaryordesirable fromtimetotime,recommendingpoliciesand proceduresforstockholdernominationof directors,andannuallyreviewingandevaluating thecompositionandperformanceofthe GovernanceCommittee,includingtheadequacy oftheGovernanceCommitteecharter. TheBoardhasdeterminedthateachmemberof theGovernanceCommitteeisanindependent directorunderNasdaqlistingstandards. BOARD OF DIRECTORS’ ROLE IN RISK OVERSIGHT TogetherwiththeBoard’sstandingcommittees, theBoardisresponsibleforensuringthatmaterial risksareidentifiedandmanagedappropriately. TheBoardanditscommitteesregularlyreview materialoperational,financial,compensationand complianceriskswithseniormanagement.Aspart ofitsresponsibilitiesassetforthinitscharter,the AuditCommitteeisresponsibleforreviewingwith managementourmajorfinancialriskexposures, includingreviewinganddiscussingwith managementoftheCompany’sprogramto identify,assess,manage,andmonitorpotential businessriskssuchasfinancial,operational, privacy,cybersecurityandbusinesscontinuity risks,andthestepsmanagementhastakento monitorsuchexposures,includingourprocedures andanyrelatedpolicies,withrespecttorisk assessmentandriskmanagement.Forexample, ourChiefFinancialOfficerreportstotheAudit Committeeonaregularbasiswithrespectto compliancewithourriskmanagementpolicies. TheAuditCommitteealsoperformsacentral oversightrolewithrespecttofinancialand compliancerisks,andreportsonitsfindingsat eachregularlyscheduledmeetingoftheBoard. TheCompensationandLeadershipDevelopment Committeeconsidersriskinconnectionwithits designofcompensationprogramsforour executives.TheGovernanceCommitteeannually reviewsourcorporatepoliciesandtheir implementation.Eachcommitteeregularlyreports totheBoard. CODE OF CONDUCT AND ETHICS WehaveadoptedaCodeofConductandEthics thatappliestoallofourofficers,directorsand employees.Wehavealsoadoptedanadditional writtencodeofethicsthatappliestoourprincipal executiveofficer,principalfinancialofficer, principalaccountingofficer,controllerandother employeesofthefinancedepartmentdesignated byourChiefFinancialOfficer.Thesecodesare availableonourwebsiteat http://ir.shutterfly.com/essential-governance- documents.Tosatisfythedisclosurerequirement underItem5.05ofForm8-K,anyamendmentsto thecodesorgrantofanywaiverfromaprovision ofthecodestoanyexecutiveofficerordirector, willbepromptlydisclosedonourwebsiteatthe above-referencedaddress,aswellasbyanyother meansthenrequiredbyNasdaqrulesor applicablelaw. STOCKHOLDER NOMINATIONS TO THE BOARD OF DIRECTORS TheGovernanceCommitteewillconsiderdirector candidatesrecommendedbystockholdersinthe samemannerinwhichitevaluatescandidates generally.Stockholderswhowishtorecommend individualsforconsiderationbytheGovernance Committeetobecomenomineesforelectionto theBoardatanannualmeetingofstockholders mustdosoinaccordancewiththeproceduresset forthinourBylaws.See“Whenarestockholder proposalsduefornextyear’sannualmeetingof stockholders?”aboveforadditionalinformation. Ingeneral,eachsubmissionmustsetforth:(a)as tothestockholder(1)thenameandaddressof thestockholderonwhosebehalfthesubmissionis made;(2)theclassandnumberofoursharesthat aredirectlyorindirectlybeneficiallyownedby suchstockholderasofthedateofthesubmission; (3)anyderivativepositioninoursecurities beneficiallyheldbysuchstockholderasofthe dateofthesubmission;(4)anyperformance- relatedfeesthatsuchstockholderisentitledto, basedonanyincreaseordecreaseinthevalueof oursharesorderivativeposition,ifany,asofthe dateofthesubmission;and(5)arepresentation whethersuchstockholderintendstodelivera proxystatementand/orformofproxytoholders ofasufficientnumberofsharestoelectthe nomineeornomineessubmitted;and(b)asto eachpersonwhomthestockholderproposesto nominateforelection(1)allinformationrelatingto suchpersonthatisrequiredtobedisclosedin solicitationsofproxiesforelectionofdirectors, includingsuchperson’swrittenconsenttobeing namedinsuchproxystatementasanomineeand toservingasadirectorifelected;and(2)a statementwhethersuchperson,ifelected,intends totender,promptlyfollowingsuchperson’s election,anirrevocableresignationeffectiveupon suchperson’sfailuretoreceivetherequiredvote forre-electionatthenextmeetingatwhichsuch personwouldfacere-electionandupon acceptanceofsuchresignationbytheBoardof Directors,inaccordancewithourCorporate 2018 PROXY STATEMENT 19 SPARTANNASH COMPANY CORPORATE GOVERNANCE PRINCIPLES (cont’d) The Board engages in self-evaluation annually, using two processes in alternate years. In one year, the Board evaluates and assesses Committee performance and overall Board performance. In alternate years, the Board conducts a peer review process of individual directors. The Board believes that these processes help promote a culture of objective and robust discussion and deliberation. The Board of Directors’ Role in Risk Oversight Management of risk is the direct responsibility of the Company’s senior leadership team. The Board of Directors is responsible for overseeing the Company’s risk management and risk mitigation. In its oversight of the Company’s risk-management process, the Board seeks to ensure that the Company is informed and deliberate in its risk-taking. The Company’s primary mechanisms for risk management are the Company’s enterprise risk management program (“ERM”), its internal audit program, strategic review sessions held between the Board and management, and the Company’s external audit by an independent accounting firm. The Board of Directors continuously analyzes the Company’s strategic plan and objectives with management. As part of this process, the Board and management identify and assess strategic risks attendant to initiatives such as acquisitions and divestitures, major investments, financings and capital commitments. The Board implements its risk oversight function both as a whole and through Committees, which meet regularly and report back to the full Board. In particular: • The Audit Committee oversees risks related to the Company’s financial statements, the financial reporting process, accounting and legal matters. The Audit Committee oversees the Company’s internal audit and ethics programs, including the Company’s Code of Conduct. On a regular basis, the Audit Committee members meet independently with the Company’s head of internal audit and representatives of the independent auditing firm and the Company’s Chief Financial Officer. • The Compensation Committee evaluates the risks and rewards associated with the Company’s compensation philosophy and programs. The Compensation Committee reviews and approves compensation programs with features that mitigate risk without impairing the overall incentive nature of the compensation. The Compensation Committee also reviews senior leadership succession planning. • The Nominating and Corporate Governance Committee regularly reviews the Company’s governance structure and practices to promote the long-term interests of shareholders. Board Leadership Structure The Nominating and Corporate Governance Committee and the Board of Directors periodically evaluate the leadership structure of the Board of Directors in light of a variety of factors that the Board considers important, including the Company’s current Board composition, the experience and skills of our management team, continuity of leadership, and other factors. The Board of Directors, upon the recommendation of the Nominating and Corporate Governance Committee, has determined that at this time it is in the best interests of the Company and its shareholders to separate the roles of Chief Executive Officer and Chairman of the Board in recognition of the differences between the two roles. The Chief Executive Officer is responsible for 13 SpartanNash Company Proxy Statement