Zions Bancorporation Corporate Governance Guidelines
The Board of Directors (the "Board") of Zions Bancorporation (the "Company") has adopted a set of corporate governance guidelines to promote the functioning of the Board and its committees and to set forth a common set of expectations as to how the Board should perform its functions.
The size of the Board should facilitate substantive discussions of the whole Board in which each director can participate meaningfully, while allowing for a diversity of perspectives and backgrounds. The Board has determined that these objectives can be obtained with eight to twelve members. The quality, experience and balance of perspectives on the Board are more important than achieving a specific size target.
A majority of the Board shall consist of directors who neither are officers or employees of the Company or its subsidiaries (and have not been officers or employees of the Company or its subsidiaries within the previous three years) nor have a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, and who are otherwise "independent" under the rules of the Nasdaq Stock Market, Inc. ("Nasdaq"). Except during periods of transition, or in other unusual circumstances, the Board would not expect to have more than two employee directors.
The Board as a whole is responsible for selecting nominees for director (subject to the approval of a majority of the independent directors of the Board). The Nominating and Corporate Governance Committee is responsible for screening and recommending candidates. In fulfilling this role, the Nominating and Corporate Governance Committee may receive input regarding board composition and candidate recommendations from the other Board members and the Chief Executive Officer ("CEO"). Factors to be considered by the Nominating and Corporate Governance Committee in recommending candidates for Board membership include, but are not limited to:
The Board believes it is important to select its Chairman and the Company's President and CEO in the manner it considers in the best interests of the Company at any given point in time. Accordingly, these positions may be filled by one or more individuals.
It is expected that directors will retire at the annual meeting following their 72nd birthday. The Board may establish "senior" or "emeritus" director titles for retired directors, but such individuals shall not be members of the Board, nor shall they vote or be subject to any of the fiduciary obligations of directors. (Such senior or emeritus directors will, however, remain subject to the Company's Code of Business Conduct and Ethics).
It is expected that employee directors will offer their resignation from the Board at the time they resign or retire from the Company.
In recommending directors for re-election to the Board at the expiration of their terms, the Nominating and Corporate Governance Committee shall consider a director's overall effectiveness and the needs of the Board, including whether changes in employment status, health, community activity or other factors may impair a director's continuing contributions to the Board. The Board does not believe that limiting the length of a director's service on the Board serves the best interests of the Company.
Management, working with the Board, will provide an orientation process for new directors, including background material on the Company, its business plan, its risk profile and meetings with senior management. Periodically, management will present additional educational sessions for directors on matters relevant to the Company.
The Board establishes director compensation. The Executive Compensation Committee, with the assistance of outside consultants, periodically reviews the amount and composition of director compensation and makes recommendations to the Board as needed. Director compensation should be consistent with market practices and should be set at levels sufficient to attract qualified Board members.
The Board currently schedules six meetings each year, in addition to the organizational meeting held in conjunction with the Company's annual shareholders meeting. One of these six meetings will be a "Business Review Board Meeting" at which the performance and strategies of the Company's major business units can be reviewed in detail. Further meetings may be held (or action may be taken by unanimous consent) at the discretion of the Board.
The Chairman is responsible for preparing an agenda for each Board meeting. Any director may suggest items for inclusion on the agenda. Management will seek to provide to all directors an agenda and appropriate materials several days in advance of meetings, wherever possible. The Board expects that meeting agendas will include a review of the Company's financial performance, material developments, strategies and risk profile.
The Board expects that senior officers of the Company will regularly attend Board and Committee meetings, present proposals and otherwise assist in the work of the Board. Members of the Board have direct access to any of the Company's employees.
All directors are invited to contact the CEO at any time to discuss any aspect of the Company's business. The Board expects that there will be frequent opportunities for directors to meet with the CEO and other members of management in Board and committee meetings and in other formal or informal settings.
To ensure free and open discussion and communication among the independent directors of the Board, regular executive sessions will be held at which only independent directors are present. The chairman of the Executive Committee will serve as the presiding director at each such executive session.
The Company shall have at least the committees required by the rules of the Nasdaq Stock Market, Inc. At present, the Company has established the following Board Committees: the Audit Committee, the Executive Compensation Committee, the Nominating and Corporate Governance Committee, the Credit Review Committee and the Executive Committee. The Board may, from time to time, establish other committees to assist it in carrying out its duties. With the exception of the Executive Committee, whose duties are detailed in the Company's incorporating documents, the duties of each standing committee of the Board will be set forth in a committee charter, which shall periodically be reviewed and approved by the Board.
The Nominating and Corporate Governance Committee provides recommendations to the Board on the composition and leadership of each of the committees. The membership of the Executive Committee will consist of the chairpersons of each of the other standing Board committees, the CEO and such other directors as the Board may designate from time to time. The chairman of the Executive Committee will consist of an independent director selected by the Board and rotated periodically.
All directors, whether members of a committee or not, are invited to make suggestions to a committee chair for additions to the agenda of his or her committee or to request that an item from a committee agenda be considered by the Board. Each committee chair will give regular reports of his or her committee's activities to the Board.
The chairpersons of each of the Board Committees are elected by the Board, with the chairpersonship to be rotated periodically.
Each of the Nominating and Corporate Governance Committee, the Audit Committee and the Executive Compensation Committee shall be composed of directors who are not officers or employees of the Company or its subsidiaries (and have not been officers or employees of the Company or its subsidiaries within the previous three years), who do not have relationships which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, and who are otherwise "independent" under the rules of the Nasdaq. A director may serve on more than one committee for which he or she qualifies.
At least annually, the Board shall review with the CEO a succession plan addressing the policies and principles for selecting a successor to the CEO and other key executives, both in an emergency situation and in the ordinary course of business. The succession plan should include an assessment of the experience, performance, skills and planned career paths for possible successors to the CEO.
A major responsibility of the Board is to monitor the performance of the CEO, and in consultation with the CEO, the performance of other key executive officers. The Executive Compensation Committee conducts an annual performance review and reports its findings to the Board.
The Executive Compensation Committee evaluates the performance of the CEO and other key executives against the Company's goals and objectives, and makes recommendations to the independent directors of the Board concerning the compensation, including short and long-term incentives, of the CEO and other key executives. The members of the Board who are independent directors determine the compensation, including short and long-term incentives, of the CEO and other key executives.
The business and affairs of the Company shall be managed by or under the direction of the Board in accordance with Utah law. In performing their duties, the primary responsibility of the directors is to exercise their business judgment in the best interests of the Company. The Board has developed a number of specific expectations of directors to promote the discharge of this responsibility and the efficient conduct of the Board's business.
All directors should make every effort to attend the six regularly scheduled meetings of the Board, meetings of committees of which they are members and the organizational meeting held in conjunction with the Company's annual shareholders' meeting; provided, however, that members may attend such meetings by telephone or video conference if necessary to mitigate conflicts.
Each director should be sufficiently familiar with the business of the Company, including its strategy, financial statements, capital structure, business risks and competition, to facilitate active and effective participation in the deliberations of the Board and of each committee on which he or she serves. Upon request, management will make appropriate personnel available to answer any questions a director may have about any aspect of the Company's business. Directors should also review the materials provided by management and advisors in advance of the meetings of the Board and its committees and should arrive at meetings prepared to discuss the issues presented.
In their roles as directors, all directors owe a duty of loyalty to the Company. This duty of loyalty mandates that the best interests of the Company take precedence over any interests possessed by a director. The Company has adopted a Code of Business Conduct and Ethics (the "Code"), including a compliance program to enforce the Code. Certain portions of the Code deal with activities of directors, particularly with respect to transactions in the securities of the Company, potential conflicts of interest, the taking of corporate opportunities for personal use, and competing with the Company. Directors should be familiar with the Code's provisions in these areas and should consult with the Company's counsel in the event they have questions about any of the Company's policies with respect to these matters.
The Company values the experience directors bring from other boards on which they serve, but recognizes that those boards may also present demands on a director's time and availability and may present conflicts of interest or legal issues. Directors should advise the chair of the Nominating and Corporate Governance Committee and the CEO before accepting membership on other boards of directors or other significant commitments involving affiliation with other businesses or governmental units.
Management speaks for the Company. Inquiries from institutional investors, the media, employees and others should be referred to the CEO or other appropriate officers of the Company. Individual directors may from time to time meet with various constituencies of the Company, but the Board expects that this would be done only with concurrence of the Board or the CEO.
At least annually, management should report to the Board on the Company's charitable contribution activities. Recognizing the potential for conflicts of interest, members of the Board should refrain from soliciting charitable financial contributions from the Company for causes in which they are personally involved.
The proceedings and deliberations (as well as any materials provided in connection therewith) of the Board and its committees are confidential. Each director shall maintain the confidentiality of information received in connection with his or her service as a director.