Corporate Governance

Shearman & Sterling Director Self-Evaluation Process | 13 FAST FACTS The typical hallmarks of a robust director self-evaluation process are individual interviews of directors, the use of a third-party facilitator (who often conducts individual director interviews) and individual director evaluations. The particular disclosures made by companies with respect to this topic varied considerably and were generally not overly specific. Some companies mentioned that the individual director evaluations were conducted on a peer-to-peer basis, while others mentioned that they conducted a 360-degree review process. Several companies also indicated that their directors completed self-assessments. Top 100 Companies disclosed that individual director evaluations were conducted in 2017. 21 THIRD-PARTY FACILITATOR'S ROLE The Top 100 Companies took varied approaches in describing the tasks performed by the third-party facilitator. Many companies described this role in general terms, stating that the third party "assisted with," "facilitated" or "brought an outside perspective to" the process. Several companies were more specific about the tasks performed by the third-party facilitator, disclosing that the third party conducted interviews with directors, compiled the results of written questionnaires completed by directors and / or synthesized the results of the process. INDIVIDUAL DIRECTOR INTERVIEWS Companies disclosed a wide variety of practices in this area. Most commonly, companies disclosed that individual director interviews were conducted solely by the lead independent director, and several companies disclosed that the lead independent director was one of the interviewers. In addition to the lead independent director, companies disclosed that interviews were conducted by a third party, the nominating and governance committee chair, the general counsel or the corporate secretary. 19 30 Top 100 Companies disclosed that they retained a third- party facilitator in 2017 (33% of companies that made detailed disclosure). Top 100 Companies disclosed that individual director interviews were conducted (52% of companies that made detailed disclosure).

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