Board of Directors
As of June 30, 2021, our Board of Directors consists of seven directors, six of whom were determined to be independent by the Board in its annual independence assessment. As previously announced, the Board has nominated Robin Davenport for election to the Board as an eighth director at the next annual shareholders’ meeting to be held in October 2021. Ms. Davenport also has been determined to be independent.
Composition (prior to October 2021 annual meeting)
Average Age: 64
Average Tenure (years): 8
Composition (anticipated after October 2021 annual meeting)
Average Age: 63
Average Tenure (years): 7
The Board has three standing committees:
Descriptions of the committee charters can be found by clicking on the links above.
The Board and the Nominating and Corporate Governance Committee believe that there are general qualifications that all directors must exhibit and other key qualifications and experiences that should be represented on the Board as a whole, but not necessarily by each individual director. The Board and the Nominating and Corporate Governance Committee require that each director be a recognized person of high integrity with a proven record of success in his or her field and be able to devote the time and effort necessary to fulfill his or her responsibilities to the Company. Each director must demonstrate innovative thinking, familiarity with and respect for corporate governance requirements and practices, an appreciation of multiple cultures and a commitment to sustainability and dealing responsibly with social issues. In addition, potential director candidates are interviewed to assess intangible qualities, including the individual’s ability to engage in constructive deliberations, both asking difficult questions and working collaboratively with and respecting differing views of other Board members.
The Nominating/Corporate Governance Committee annually considers the skills, experience and background that it believes are desirable to be represented on the Board and reviews each director’s skills to assess whether there are gaps that need to be filled. To assist it in this process the Committee has established a skills matrix that it uses to ensure the composition of the Board is such that the Board, as a whole, possesses those skills that the Committee has determined to be most pertinent to the Board’s fiduciary and oversight responsibilities. While the Committee, in annually considering the composition of the Board and its committees, performs a granular or “deep dive” relative to the desired skills and the actual skills possessed by each Board member, the matrix below provides a summary overview of those skills deemed most pertinent to our Board.
The Board aims to strike a balance between the experience that comes from long-term service on the Board with the new perspective that new Board members bring, while being sensitive to the benefits of gender and racial diversity. The Board also has a mandatory retirement policy, whereby no director may stand for re-election if he or she has reached the age of 75. Over the past 6 years, the Company has added 5 new directors due to Board refreshment, including Ms. Edwards, an African American female; and, with the anticipated election of Ms. Davenport in October 2021, the Company will have added 6 new directors in 7 years including 2 females.
Board Leadership Structure
The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure in order to best serve shareholders’ interests. To ensure an efficient and high-functioning board, in 2016, the Board elected our President and CEO, David Dunbar, to serve as Chair of the Board. In its determination that Mr. Dunbar should serve in this role, our Board examined several factors and believed that Board independence and management oversight were effectively maintained through the Board’s composition of independent directors, the committee system and a seasoned and engaged Lead Independent Director. A combined CEO and Chair role serves as an effective bridge between the Board and senior management and also provides strong unified leadership of the Company.
Optimal Board leadership structure may change as circumstances warrant. The Board reviews its determination annually in accordance with the Corporate Governance Guidelines. This annual review allows the Board to maintain flexibility and promote the execution of the Company’s strategy, the independent oversight of senior management and the best interests of shareholders. In the event the Board determines that a different leadership structure is in the best interests of the Company and its shareholders, the Board will consider a change.
In light of the combination of the Chairman and CEO roles, our Board maintains a strong Independent Lead Director function. The responsibilities of the Lead Independent Director include:
- Presiding at all meetings of the Board at which the Chair of the Board is not present, including all executive sessions of independent directors (which occurs at least quarterly).
- Encouraging and facilitating active participation of all directors.
- Serving as a liaison between the independent directors and the Chair of the Board on particular issues brought up by independent directors.
- Calling and leading the executive sessions of independent directors.
- Leading the Board discussions regarding the CEO’s annual evaluation and succession planning.
- Providing feedback on information flow from management to the Board.
- Advising committee chairs in fulfilling their designated roles and responsibilities.
- Being available for consultation and communication with shareholders, where appropriate and upon reasonable request.
- Performing such other functions as the Board or other directors may request.
Corporate Governance Guidelines
The Board operates pursuant to a set of Corporate Governance Guidelines (the “Guidelines”) that set forth policies and procedures for the effective performance of the Board’s duties. These Guidelines provide a flexible framework for the Board in order to assure compliance with state and federal laws and regulations and the applicable rules of the New York Stock Exchange (the “NYSE”) and to assure that the Company acts effectively and efficiently in the best interests of the stockholders.
Select topics covered by the Guidelines include (without limitation):
- Other Boards – limitation on service to no more than 3 other public company boards with out Nominating/Corporate Governance Committee approval;
- Director Independence – absent compelling circumstances, all directors other than the CEO should be independent;
- Independent Lead Director – if, as is currently the case, the CEO also serves as Chairman of the Board, the Company shall have a lead independent director whose responsibilities are spelled out in the Guidelines;
- Standing Committees – the Board shall have standing Audit, Nominating/Corporate Governance, and Compensation Committees, the members of which shall be independent;
- Annual Evaluations – the Nominating/Corporate Governance Committee maintains responsibility for administering a process for annual review of the Board, each Committee and each director;
- Mandatory Retirement Age – no director may stand for re-election if he/she has attained the age of 75 years;
- Executive Sessions – requires regular meetings of the independent directors with no member of management present (such sessions are led by the Lead Independent Director);
- Access to Advisors and Senior Management – directors have unfettered access to senior management and the ability to retain independent advisors as they deem advisable;
- Stock Ownership Guidelines – require the attainment of Company equity having a specified minimum value (5x annual retainer for directors, 5x base salary for CEO, 2X base salary for other executive officers, and 1X base salary for business unit leaders.
Anti-Hedging and Anti-Pledging Policies
The Company’s anti-hedging and anti-pledging policy prohibits all officers, directors and key employees from engaging in certain transactions involving the Company’s securities. Specifically, officers, directors and key employees are prohibited from engaging in the following transactions involving Company securities:
- short-term trading, defined as selling Standex stock within six months of purchasing Standex stock on the open market;
- short sales;
- buying or selling put or call options, or other derivative securities;
- hedging transactions, such as zero-cost collars and forward sale contracts;
- holding Standex stock in a margin account; or
- pledging Standex stock as collateral without requesting approval.