2003 Governance Charter: CCL
CORPORATE GOVERNANCE GUIDELINES
1. Director Qualifications
The Boards of Directors (the "Boards") of Carnival Corporation and Carnival plc (the "Companies") shall, within the applicable time periods, satisfy the requirements of the rules of the New York Stock Exchange requiring that a majority of the members of the Boards satisfy the independence criteria set forth in those rules. The Nominating & Governance Committee is responsible for reviewing with the Boards, on an annual basis, the requisite skills and characteristics of new Board members as well as the composition of the Boards as a whole. This assessment will include members' qualification as independent, as well as consideration of diversity, age, skills, and experience in the context of the needs of the Boards. The Boards shall make an affirmative determination as to whether any prospective independent director has material relationships with either of the Companies (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Companies). The Boards may adopt and disclose categorical standards to assist it in making determinations of independence in accordance with the rules of the New York Stock Exchange. Nominees for directorship will be selected by the Nominating & Governance Committee in accordance with the policies and principles in its charter. The invitation to join the Boards should be extended by the Boards themselves, by the Chairman of the Nominating & Governance Committee and the Chairman of the Boards.
The Boards presently have 14 members. It is the sense of the Boards that a size of 12 to 16 is appropriate. However, the Boards would be willing to expand the Boards to accommodate an outstanding candidate.
The Boards do not believe they should establish term limits. While term limits could help insure that there are fresh ideas and viewpoints available to the Boards, they hold the disadvantage of losing the contribution of directors who have been able to develop, over a period of time, increasing insight into the Companies and their operations and, therefore, provide an increasing contribution to the Boards as a whole. As an alternative to term limits, the Nominating & Governance Committee will review each director's continuation on the Boards every three years. This will allow each director the opportunity to conveniently confirm his or her desire to continue as a member of the Boards.
2. Director Responsibilities
The basic responsibility of the directors is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Companies and their shareholders. The directors are authorized to operate and carry into effect the agreements and deeds entered into in connection with the formation of the dual listed company structure between the Companies. Subject to applicable law, nothing done by any director in good faith pursuant to such authority and obligations shall constitute a breach of the fiduciary duties of such director to the Companies or their shareholders. The directors shall, in addition to their duties to each of the Companies, be entitled to have regard to interests of the shareholders of each of the Companies as if the Companies were a single entity. In discharging that obligation, directors should be entitled to rely on the honesty and integrity of the Companies' senior executives and their outside advisors and auditors. The directors shall also be entitled to have the Companies purchase reasonable directors' and officers' liability insurance on their behalf, to the benefits of indemnification to the fullest extent permitted by law and the Companies' organizational documents and any indemnification agreements, and to exculpation as provided by the laws of the Companies' jurisdiction of incorporation, state law and the Companies' organizational documents.
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. Information and data that are important to the Boards' understanding of the business to be conducted at a Board or committee meeting should generally be distributed in writing to the directors before the meeting, and directors should review these materials in advance of the relevant meeting.
The Boards have no policy with respect to the separation of the offices of Chairman and the Chief Executive Officer. The Boards believe that this issue is part of the succession planning process and that it is in the best interests of the Companies for the Boards to make a determination when they elect a new chief executive officer.
The Chairman will establish the agenda for each Board meeting. Each Board member is free to suggest the inclusion of items on the agenda. Each Board member is free to raise at any Board meeting subjects that are not on the agenda for that meeting. The Boards will review the Companies' long-term strategic plans and the principal issues that the Companies will face in the future during at least one Board meeting each year.
The non-management directors will meet in executive session at least quarterly. The director who presides at these meetings will be chosen by the non-management directors, and his or her name will be disclosed in the annual proxy statement.
The Boards believe that management speaks for the Companies. Individual Board members may, from time to time, meet or otherwise communicate with various constituencies that are involved with the Companies. But it is expected that Board members would do this with the knowledge of the management and, absent unusual circumstances or as contemplated by the committee charters, only at the request of management.
3. Board Committees
The Boards will have at all times an Audit Committee, a Compensation Committee and a Nominating & Governance Committee. All of the members of these committees will be independent directors under the criteria established by the New York Stock Exchange. Committee members will be appointed by the Boards upon recommendation of the Nominating & Governance Committee with consideration of the desires of individual directors. Committee assignments and the designation of committee chairs should be based on the director's knowledge, interests and areas of expertise. The Boards do not favor mandatory rotation of committee assignments or chairs. The Boards believe experience and continuity are more important than rotation. Committee members and chairs should be rotated only if rotation is likely to increase committee performance.
Each committee will have its own charter. The charters will set forth the purposes, goals and responsibilities of the committees as well as qualifications for committee membership, procedures for committee member appointment and removal, committee structure and operations and committee reporting to the Boards. The charters will also provide that each committee will annually evaluate its performance.
The Chairman of each committee, in consultation with the committee members, will determine the frequency and length of the committee meetings consistent with any requirements set forth in the committee's charter. The Chairman of each committee, in consultation with the appropriate members of the committee and management, will develop the committee's agenda. At the beginning of the year each committee will establish a schedule of agenda subjects to be discussed during the year (to the degree these can be foreseen). The schedule for each committee will be furnished to all directors.
The Boards 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 the Companies in advance.
The Boards may, from time to time, establish or maintain additional committees as necessary or appropriate.
4. Director Access to Officers and Employees
Directors have full and free access to officers and employees of the Companies. Any meetings or contacts that a director wishes to initiate may be arranged through the CEO or the Secretary or directly by the director. The directors will use their judgment to ensure that any such contact is not disruptive to the business operations of the Companies and will, to the extent not inappropriate, copy the CEO on any written communications between a director and an officer or employee of the Companies.
The Boards welcome regular attendance at each Board meeting of senior officers of the Companies. If the CEO wishes to have additional personnel of the Companies attend on a regular basis, this suggestion should be brought to the Boards for approval.
5. Director Compensation
The form and amount of director compensation will be determined by the Compensation Committee in accordance with the policies and principles set forth in its charter, and the Compensation Committee will conduct an annual review of director compensation. The Compensation Committee will consider that directors' independence may be jeopardized if director compensation and perquisites exceed customary levels, if the Companies make substantial charitable contributions to organizations with which a director is affiliated, or if the Companies enter into consulting contracts with (or provides other indirect forms of compensation to) a director or an organization with which the director is affiliated.
6. Director Orientation and Continuing Education
The Nominating and Governance Committee will maintain orientation programs for new directors and continuing education programs for all directors.
7. CEO Evaluation and Management Succession
The Compensation Committee will conduct an annual review of the CEO's performance, as set forth in its charter. The Boards of Directors will review the Compensation Committee's report in order to ensure that the CEO is providing the best leadership for the Companies in the long- and short-term.
The Nominating & Governance Committee will make recommendations to the Boards with respect to potential successors to the CEO. All members of the Boards will work with the Nominating & Governance Committee to evaluate potential successors to the CEO. The CEO should at all times make available his or her recommendations and evaluations of potential successors, along with a review of any development plans recommended for such individuals.
8. Annual Performance Evaluation
The Boards of Directors will conduct an annual self-evaluation to determine whether they and their committees are functioning effectively. The Nominating & Governance Committee will receive comments from all directors and report annually to the Boards with an assessment of the Boards' performance. This will be discussed with the full membership of the Boards following the end of each fiscal year. The assessment will focus on the Boards' contribution to the Companies and specifically focus on areas in which the Boards or management believe that the Boards could improve.