PNC’s corporate governance structure assists the Board of Directors in overseeing PNC’s business and in fulfilling the board’s fiduciary duties. The board supports a governance structure that is appropriate for PNC’s business and strategic objectives, transparent to the public and PNC’s stakeholders, and flexible enough to accommodate a dynamic environment. We regularly review and enhance our governance processes and policies. To help convey this philosophy, the board has adopted and disclosed corporate governance guidelines, as well as policies on director and executive stock ownership. Our corporate governance guidelines can be found at pnc.com/ corporategovernance. In accordance with these guidelines:
Under the above guidelines, the board has appointed a lead independent director and determined that all of our directors are independent under applicable rules with the exception of our chairman and CEO. The corporate governance guidelines outline the annual director assessment process, which includes an evaluation of independence, as well as a consideration of the skills, qualifications and experience of the board.
While PNC has not adopted specific minimum qualifications for its directors, several board-approved criteria are considered when evaluating each director, as well as new candidates for nomination to the board.
Through application of these criteria, the Board is composed of directors possessing a broad range of skills, experience and personal characteristics that result in a diverse Board of Directors.
Our board has four standing committees that meet on a regular basis: Audit, Nominating and Governance, Personnel and Compensation, and Risk.
We have a standing Executive Committee that meets, if needed, to act on behalf of our board. We also have a Technology Subcommittee of our Risk Committee to facilitate board-level oversight responsibilities with respect to technology risk, technology risk management, cybersecurity, information security, business continuity and significant technology initiatives and programs. We also have a Compliance Subcommittee of our Risk Committee to facilitate board-level oversight of compliance risk, significant compliance-related initiatives and programs, and the maintenance of a strong compliance risk management culture.
In 2017, PNC held 11 board meetings. PNC also held regular meetings for its Audit, Nominating and Governance, Personnel and Compensation, and Risk committees, as well as its Technology and Compliance Subcommittees. The Executive Committee did not meet in 2017. Each director attended at least 75 percent of the total meetings held by the board and the committees and subcommittees on which he or she served.
To succeed in a highly competitive environment, PNC must attract, motivate, retain and reward employees who are crucial to our business success. We have designed an effective and balanced compensation program that is aligned with our risk management standards.
The board’s Personnel and Compensation Committee, composed entirely of independent directors, maintains clear independence from management when evaluating the executive compensation program and making compensation decisions. We make public disclosure of and decisions regarding our executive compensation program clear and understandable. PNC’s executive compensation philosophy is based on a few core principles:
In November 2017, PNC joined organizations around the country for the annual National Conversation on Board Diversity, an event in which senior executives explore the impact of gender diversity in nonprofit and corporate boardrooms. The event is organized by 2020 Women on Boards, a campaign established in 2010 to increase the percentage of women serving on U.S. company boards to 20 percent or greater by 2020.
The Pittsburgh chapter of 2020 Women on Boards engaged PNC to offer a workshop that would provide women with advice and feedback on the skills they need to become board-ready. This workshop featured a panel moderated by PNC Chief Diversity Officer Marsha Jones, who led a discussion with PNC panelists, including two board members, the company’s head of Retail Distribution, and the company’s general counsel and chief administrative officer.
Women in leadership are integral to successful corporate governance, and this is a matter of commitment for PNC. Today, we have more women serving on our board and more women on our Executive Committee than at any other point in our company’s history. But like institutions across the country, we have more work to do in the area of gender diversity.
Recognizing the value and impact of sustainable business practices, PNC’s Board of Directors has oversight of the company’s CSR program and regularly discusses related initiatives, as well as risks and opportunities. The Board of Directors receives annual environmental, social and governance updates, including those on the PNC Foundation, talent and diversity, cybersecurity, political contributions, environmental lending practices and the Community Reinvestment Act.
In 2017, PNC’s corporate governance guidelines were expanded to include a provision that the Board is responsible for overseeing PNC’s most important CSR policies, programs and strategies.
While PNC has not adopted minimum qualifications for its directors, we have Board-approved criteria which are considered evaluating each director, as well as new candidates for nomination to the Board. Through application of these criteria, the Board is composed of directors possessing a broad range of skills, experience and personal characteristics that result in a diverse Board of Directors.
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