Board of Director Guidelines
Retirement Age & Term Limits – It is the policy of the Board that a Director will retire at the end of the month in which the Director turns age 75. There is no specified term limit that a Director may serve. The Board’s self evaluation process described within these guidelines is an important factor in determining a Board member’s tenure.
Board Compensation – A Director who is also an officer of the Company shall not receive additional compensation for service as a Director.
The Nominating and Corporate Governance Committee is responsible for recommending to the Board the compensation and benefits for non-management Directors. Changes in Board compensation must be approved by the full Board.
The Company believes that this compensation should (a) be fair with regard to the work required in light of the Company’s size and scope, (b) align Directors’ interests with the long-term interests of stockholders by encouraging increased ownership of the Company’s stock through deferred compensation, options to purchase Company stock or similar compensation, (c) be simple, transparent and easy for stockholders to understand.
In order to maintain independence, no member of the Audit Committee may receive, either directly or indirectly, any form of compensation from the Company other than the fees paid to the Directors for service on the board, or a pension or other deferred compensation for prior service.
All non-management Directors are reimbursed for travel expenses related to attending Board, committee or Company business meetings. Travel arrangements can be made by the Company.
Attendance – Attendance at Board meetings is a priority; therefore, Board members are expected to attend all Board meetings and meetings of the committees on which they serve. In the event the Director is not able to attend the meeting in person, he or she may attend by teleconference; however, this should be the exception.
Confidentiality – Each Director has a fiduciary responsibility to maintain the confidentiality of information received as part of his or her service as a Director.
Chairmanship – The Board requires the separation of the offices of Chairman and CEO. The Board selects the Chairman in a manner that is in the best interests of the Company. The Chairman is a non-employee. The CEO is an employee.
Stock Ownership Guidelines - The Board supports the position that Directors should own a meaningful number of shares in the Company. Non-employee Directors are expected to own shares of PFB common stock at least equivalent to three times the cash portion of their annual retainer within three years of being elected.
Other Directorships – PFF Bancorp, Inc. limits to three the number of boards of publicly held companies on which its board members may serve, including their service on the PFF Bancorp, Inc. Board of Directors. Currently, none of the Company’s Directors serve on another publicly traded company board. Directors are expected to advise the Chairman of the Board and the Chairman of the Nominating and Corporate Governance Committee in advance of accepting any other publicly traded company directorship. The Company does have a policy that limits the number of audit committees of other publicly traded companies on which its audit committee members may serve to one.
The Company encourages its officers and Directors to participate in community organizations; therefore, directorships on “not for profit” boards of directors are supported so long as these boards and activities do not present unreasonable demands upon a Director’s time and availability that impair the Director’s service on the Company’s Board.
Access to Management, Other Employees and Outside Resources – Board members have complete access to the Company’s senior management and employees. Any meetings or contacts that a Director wishes to initiate may be arranged directly or through the office of the Corporate Secretary. It is assumed that Board members will use judgment to ensure that such contact is not disruptive to the operations of the Company. In addition, the Board and its Committees have the authority to hire independent legal, financial or other advisors at any time and of their own choosing, at the expense of the Company.
Board members may also request the attendance at Board meetings of management or employees who can provide additional insight into items being discussed.
Communication with Non-Management Members of the Board of Directors – The Board believes that management should speak for the Company; therefore, it is recommended that a Director should refer all inquiries from institutional investors, analysts, and shareholders to the Chief Executive Officer, Chief Financial Officer or Chief Operating Officer. An employee, officer or other interested party who wishes to communicate with non-management members of the Board of Directors may do so by directing the communication to the Corporate Secretary. Confidential messages will be delivered by the Corporate Secretary to the Director and will be held in strict confidence.
Selection of Chief Executive Officer – The Board is responsible for selecting the Company’s Chief Executive Officer. The Board considers, among other things, the candidate’s integrity, experience, understanding of the Company’s business, knowledge, skills, leadership qualities, and reputation in the business community.
Evaluation of the Chief Executive Officer – It is the responsibility of the Employee Compensation and Benefits Committee to oversee the evaluation process for the Chief Executive Officer.
View Compensation Committee Report (2003 Proxy Statement)
CEO / Management Succession Planning – Annually, the Board will discuss, approve and maintain a succession plan for the Chief Executive Officer that addresses both emergency situations and ordinary course of business. The plan should include an assessment of the experience, performance, skills and planned career paths for possible successors to the CEO. Annually, the Chief Executive Officer will conduct a succession planning session with the Board to present succession plans for certain key officers.
Meetings of Non-Management Directors – Once each quarter, the regularly scheduled Board meeting includes an executive session of all non-management Directors.
Board Meetings – There are twelve (12) regularly scheduled meetings of the Board each year with at least one meeting scheduled each month. The meetings are ordinarily held on the fourth Wednesday of each month. Directors are expected to attend in person or by teleconference on an exception basis. Special meetings of the Board may be called from time to time. The Board expects senior management of the Company to regularly attend its meetings. The General Counsel and Corporate Secretary also regularly attend Board meetings.
The Corporate Secretary prepares a “Board of Directors Master Agenda” which sets forth items to be considered by the Board at each of its regular meetings. The Chairman and/or CEO may adjust the agenda to include items not on the master agenda. Board members are free to suggest the inclusion of additional items on the agenda, and are free to raise, at the meeting, subjects that are not specifically on the agenda.
Committee Meetings - Committee meetings are set according to a schedule determined at the annual organizational meeting. All Directors, whether or not members of the Committee, are free to attend any Committee meetings except that management directors may not attend the executive session of non-management Directors. Directors are expected to attend in person or by teleconference on an exception basis.
The agenda for each Committee is prepared by the Chair of the Committee in consultation with members of the Committee, advisors and staff. The agenda, materials and minutes for each Committee are available to all Directors.
Distribution of Materials – Appropriate written materials are distributed sufficiently in advance of the meetings to allow for meaningful prior review by the Directors. The material should be clear, concise and consistent with the need for an understanding of the issue presented.
Strategic Planning Sessions – At least once each year, the Board meets with members of senior management to review and approve the Company’s strategic and long-range plans.
Approval of Annual Budgets and Operating Plans – Members of senior management update the Board on a regular basis regarding the Company’s performance relative to its budget and plan. At the start of the new fiscal year, the Board reviews and approves the operating budget and financial plan.