Governance Committee Charter
The Governance Committee (the “Committee”) acts on behalf of and with the concurrence of the Board of Directors with respect to matters relating to the composition, membership, structure and effectiveness of the Board and the Board’s governance responsibilities.
The Committee’s primary responsibilities are:
Director Qualification Standards and Nominations Process
1. Identifying Nominees. The Committee shall identify candidates for election to the Board at the annual meeting of the shareholders using a variety of means as it determines are necessary or appropriate, including recommendations of shareholders made in accordance with this process. The Committee may also solicit recommendations from current directors, management or others who may be familiar with qualified candidates, and may consider current directors for re-nomination. The Committee may, in its sole discretion, retain and terminate any search firm (and approve such search firm’s fees and other retention terms) to assist in the identification of candidates.
2. Shareholder Recommendations.
The Committee will consider candidates recommended for nomination to the Board
by shareholders of NorthWestern who hold at least one
percent (1%) of NorthWestern’s outstanding stock
(“Qualified Shareholders”). Qualified Shareholders may make such a
recommendation by submitting a completed Director Nomination Form, attached as
Schedule A hereto, at least 120 days prior to the one-year anniversary of the
date the proxy statement for the preceding annual meeting. Completed
Director Nomination Forms shall be sent to:
% Corporate Secretary
125 S. Dakota Ave.
3. Skills and Qualifications. The Committee believes there are certain minimum skills and qualifications that each director nominee must possess or satisfy, and certain other skills and qualifications that at least one or more directors must possess or satisfy. In considering candidates for director nominee, the Committee will take into account whether a candidate has skills, experience and background that add to and complement the range of skills, experience and background of existing directors.
(a) Integrity. Each director nominee must be an
individual of high personal and professional integrity and ethical character.
(b) Accomplishments. Each director nominee shall have demonstrated significant achievement in business, finance, government, education, law, technology or other fields important to the operation of NorthWestern.
(c) Business Judgment. Each director nominee must possess the ability to exercise sound business judgment on a broad range of issues.
(d) Experience and Education. Each director nominee shall have sufficiently broad experience and professional and educational background to have a general appreciation of the major issues facing public companies of a size and scope similar to NorthWestern. Such issues include corporate governance issues, regulatory obligations of a public issuer and strategic business planning.
(e) Commitment. Each director nominee shall have the willingness and ability to devote the necessary time to Board duties, including preparing for and attending meetings of the Board and its Committees.
(f) Representing Shareholders. Each director nominee must be prepared to represent the best interests of NorthWestern and its shareholders, giving consideration to the interests of NorthWestern’s customers.
(g) Industry Knowledge. At least some of the directors shall have experience and knowledge of the industry sector in which NorthWestern operates its business.
(i) Financial Literacy. At least three (3) directors who are eligible to serve on the Audit Committee of the Board shall be capable of reading and understanding financial statements. In addition, at least one (1) director who is eligible to serve on the Audit Committee of the Board shall be an “audit committee financial expert” in accordance with applicable rules of the Securities and Exchange Commission, and have experience or background resulting in “financial sophistication” as determined by the Board in its business judgment. Director nominees shall be “independent” to the extent necessary to satisfy such requirement.
4. Evaluation. The Committee shall evaluate each candidate to determine whether such candidate should be recommended to the Board as a director nominee.
(a) Qualifications. The Committee shall assemble all information regarding a candidate’s background and qualifications to determine if the candidate possesses or satisfies the minimum skills and qualifications that a director nominee must possess or satisfy or that one or more members of the Board must possess or satisfy.
(b) Board Contribution. The Committee shall evaluate a candidate’s mix of skills and qualifications and determine the contribution the candidate could be expected to make to the overall functioning of the Board.
(c) Board Composition. The Committee shall give due consideration to the overall Board balance of diversity of perspectives, backgrounds and experiences.
(d) Past Performance. With respect to current directors, the Committee shall consider past attendance at meetings and assess the participation in and contributions to the activities of the Board.
(e) Interviews and Other Input. The Committee, in its discretion, may designate one or more of its members to interview any candidate. In addition, the Committee may seek input from NorthWestern’s Chief Executive Officer or other members of NorthWestern’s management or the Board, who may, in their discretion, interview any candidate.
(f) Shareholder Recommendations. The manner in which the Committee evaluates candidates recommended by Qualified Shareholders is generally the same as candidates from other sources. However, the Committee will also seek and consider information concerning the relationship between the Qualified Shareholder and the candidate to determine if the candidate can represent the interests of all of the shareholders. The Committee will not evaluate a candidate recommended by a Qualified Shareholder candidate unless the Director Nomination Form provides that the potential candidate has indicated a willingness to serve as a director, to comply with the expectations and requirements for Board service publicly disclosed by NorthWestern and to provide all of the information required to conduct an evaluation.
5. Recommending Nominees. The Committee shall
recommend director nominees to the Board based on its assessment of overall
suitability to serve on the Board in accordance with this process.
Director Nomination Form
Name of Shareholder:
Number and Class of Shares Held by the Shareholder:
Note: If the shares are not held in the shareholder’s name, evidence that the shareholder is the beneficial owner of the shares must be provided.
Name of Candidate the Shareholder wants the Governance Committee to Consider:
Date of Submission:
Has the Candidate agreed to have his/her name submitted for consideration and to provide the Governance Committee all information needed to conduct its evaluation:
Has the Candidate agreed to abide by all of the requirements for membership on the Board of Directors set forth in the Governance Charter:
Candidate’s Contact Information:
Please attach a recent and current biography/resume of the
Candidate, outlining (at a minimum), the Candidate’s educational
history, work history, awards and accomplishments, past experience as a board
member, leadership experience, business experience, any financial training or
experience, current boards on which the Candidate serves (include public and
private boards of directors as well as charitable organizations), the
Candidate’s date of birth, current place of residence, and citizenship.
Please describe why the Shareholder believes the Candidate should be elected as a director of NorthWestern:
Please describe in detail all past and current relationships between the Candidate and the Shareholder, including any family relationship, any business relationship, any employment relationship, any charitable relationship, any investment relationship, etc.
Signature of Shareholder: