Corporate Governance

Shearman & Sterling 8 | Shareholder Engagement The INVESTOR STEWARDSHIP GROUP'S "Corporate Governance Principles For U.S. Listed Companies (2017)" provides that: The appropriate independent directors should be available to engage in dialogue with shareholders on matters of significance, in order to understand shareholders' views. THE BUSINESS ROUNDTABLE'S "Principles of Corporate Governance (2016)" states that one of the eight core "Guiding Principles of Corporate Governance" is: The board and management should engage with long-term shareholders on issues and concerns that are of widespread interest to them and that affect the company's long-term value creation. ENGAGEMENT BY BOARD MEMBERS Engagement by board members continues to be one of the most discussed issues in this area. While adoption of formal shareholder engagement policies or protocols is still in the early stages, there is increased pressure from shareholders and shareholder advocacy groups on directors to directly engage with shareholders. In its September 6, 2017 letter to 151 of its "portfolio" companies who have adopted proxy access or have received a majority vote in favor of a proxy access shareholder proposal, the New York City Comptroller (NYCC) requested that "one or more members" of each of these companies' nominating and governance committee engage with the NYCC's office to discuss board composition and refreshment. This letter from the NYCC is discussed further in the article "Boardroom Accountability Project 2.0: Focusing on Board Diversity and Refreshment" on page 24. " " " " 35% OF THE Top 100 Companies that made shareholder engagement disclosures in their 2017 proxy statements reported that board members engaged with shareholders. 58% OF THE Top 100 Companies that reported that board members engaged with shareholders indicated that their Lead Independent Director / Presiding Director / Independent Chair / Compensation Committee Chair was involved in or led such engagement. 74 26 26 15 OF OF

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