Director's Duties
In exercising their duties, directors may consider, and act upon their beliefs concerning, Hewitt's long-term financial and other interests, and may take into account, among other factors, the social, economic and legal effects of Hewitt's actions upon all constituencies having a relationship with Hewitt, including without limitation, its stockholders, employees, clients, suppliers, consumers, and the community at large, so long as all actions and decisions reflecting such considerations are reasonably calculated to be in the interests of Hewitt's stockholders. In discharging that obligation, directors should be entitled to rely on the honesty and integrity of Hewitt's officers, employees, outside advisors and independent auditors.
Directors are expected to read broadly about Hewitt, its competitors, and the industry (ies) in which Hewitt competes. Directors who are not otherwise retired from service as officers of their companies are expected to maintain positions in good standing within their own companies as well as in their surrounding communities.
Directors are expected to attend Board meetings and meetings of committees on which they serve, and to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. Directors are expected to review meeting materials prior to Board and committee meetings and, when possible, should communicate in advance of meetings any questions or concerns that they wish to discuss so that management will be prepared to address the same. Directors are expected to participate actively in discussions, expressing divergent points of view and drawing on their experience.
Board Meetings
- Selection of Agenda Items and Executive Sessions.
The Chairman establishes the agenda for Board meetings. Each Board member is free to suggest the inclusion of items on the agenda. Each Board member is also free to raise at any Board meeting subjects that are not on the agenda for that meeting. The full Board is regularly scheduled to meet four-six times a year. In addition, independent directors will meet at least 2 times a year, in executive session without any members of Hewitt's management, whether or not they are directors. There may, but does not need to be, a single presiding director at all executive sessions; however the directors meeting in executive session shall have to formulate and disclose the manner by which a presiding director shall be selected for each executive session. If, however, one director is chosen to preside at all executive sessions, his or her name will be disclosed in the annual proxy statement. The annual proxy statement will also disclose how interested persons may communicate with any such person or the directors who meet in executive session as a group.
- Distribution of Materials.
Hewitt shall distribute, sufficiently in advance of meetings to permit meaningful review, any written materials that are important to the Board's understanding of the agenda items and other topics to be considered at a Board meeting. In the event of a pressing need for the Board to meet on short notice or if such materials would otherwise contain highly confidential or sensitive information, it is recognized that written materials may not be available in advance of the meeting.
Director Compensation
The Compensation and Leadership Committee, in accordance with the policies and principles set forth in its charter, will recommend the form and amount of director compensation for Board membership, Committee membership, and serving as Chairperson of a Board Committee. Hewitt employees who serve as directors will receive no compensation for their service as directors, but will be compensated for their reasonable and necessary out of pocket expenses incurred in the course of their duties as directors. The Compensation and Leadership Committee will periodically review directors' fees and other compensation, including how such compensation relates to director compensation for companies of comparable size and complexity. As part of such review, the Compensation and Leadership Committee also will consider the impact that excessive director compensation could potentially have on director independence. The Compensation Committee's review will include an examination of both direct and indirect forms of compensation to Hewitt's directors, including charitable contributions to organizations with which a director is affiliated, and consulting or similar arrangements. Accepting director compensation in the form of Hewitt stock will be encouraged but not required. Changes to director compensation will be proposed by the Compensation Committee to the Board for its consideration.
Continuing Director Education
All new members of the Board participate in a formal orientation program to acquaint themselves with Hewitt's business and structure. Such program includes review of documentation of Hewitt's business and financial structure, including a review of Hewitt's history, as well as meetings with members of senior management. Ongoing, non-director members of senior management are regularly invited to meet with the Board to apprise them on Hewitt's business activities.
Assessing Board Performance
The Board, in conjunction with the Compensation and Leadership Committee, will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. The Compensation and Leadership Committee will ask all directors to comment as to the Board's performance and will report annually to the Board with an assessment of the Board's performance, to be discussed with the full Board following the end of each fiscal year. The Compensation and Leadership Committee will utilize the results of this self-evaluation process in assessing and determining the characteristics and critical skills required of prospective candidates for election to the Board and membership on various committees.
Access to Officers and Employees
Board members have complete and open access to Hewitt's Chief Executive Officer, Chief Operating Officer, Chief Administrative Officer, Chief Financial Officer, General Counsel, Manager of Internal Audit as well as Hewitt's independent advisors. Board members are encouraged to engage in discussion with other Hewitt leaders and employees. Board members who wish to have access to such other individuals should coordinate such access through the Chairman to minimize disruption to the business.
Interaction with Third Parties
The Board believes that management should speak for Hewitt and that the Chairman should speak for the Board. It is suggested that each director refer all inquiries from institutional investors, analysts, the press or clients to the Chief Executive Officer or his or her designee.
Board Authority
The Board and each committee have the power to hire independent legal, financial or other advisors as they may deem necessary, without consulting or obtaining the approval of any officer of Hewitt in advance.
Confidentiality
The Board believes maintaining confidentiality of information and deliberations is imperative. Information learned during the course of service on the Board is to be held confidential and used solely in furtherance of Hewitt's business.
