The following guidelines have been approved by the Board of Directors of Wyeth (the “Corporation”) to provide an overall framework of corporate governance for the Corporation and, generally, document the policies and practices under which the Corporation has conducted its corporate affairs for many years. The Corporation acknowledges that the field of corporate governance is continuously evolving and these written guidelines will be subject to further development following a review of various aspects of corporate governance principles annually or more frequently as deemed necessary or appropriate.
There are five key Committees of the Board of Directors, the Executive Committee, the Audit Committee, the Compensation and Benefits Committee, the Corporate Issues Committee, and the Nominating and Governance Committee. During the intervals between meetings of the Board of Directors, the Executive Committee performs all the duties and may exercise all the powers of the Board in the management of the property and business of the Corporation except such duties and powers as are by law, the Certificate of Incorporation or the By-Laws of the Corporation reserved to the Board of Directors. The charters of the other Committees of the Board of Directors, which set forth their purposes, responsibilities and duties, are published on the Corporate Governance page of the Internet website of the Corporation at www.wyeth.com. The memberships of the Audit Committee, the Compensation and Benefits Committee, the Corporate Issues Committee, and the Nominating and Governance Committee are comprised solely of independent directors. Members of the Audit Committee may not simultaneously serve on the audit committees of more than three public companies including that of the Corporation.
The Board of Directors has adopted written Criteria and Procedures for Candidate Selection for the Board of Directors which are published on the Corporate Governance page of the Internet website of the Corporation at www.wyeth.com.
Information with regard to serving on the Board of Directors, benefits, and obligations are provided to candidates for membership on the Board. An orientation is provided to new Board members, customized to the needs and prior experience of each new Board member. A Board Handbook is provided to each Director and updated as necessary. Each new Director is required to attend at least one director education program from among the programs offered by various institutions which have been identified by the Nominating and Governance Committee. All other Directors are encouraged to participate in continuing education programs as appropriate. Directors are also encouraged to participate in the director site visitation program in which Directors may visit the major facilities of the Corporation worldwide.
Each person serving as a Director must devote the time and attention necessary to fulfill the obligations of a Director. In addition, it is essential that non-management Directors remain independent from management by avoiding real or apparent conflict of interest relationships. Therefore, upon becoming aware of any matter (affecting them or their immediate family or otherwise) that could impact the Director’s ability to be deemed independent in accordance with Section II.b hereof, each such Director is to promptly consult with the Corporation regarding such potential conflicts of interest including, but not limited to, the acceptance of a new directorship. Ordinarily, Directors should not serve on more than four other boards of public companies in addition to the Board of the Corporation.
A Director whose primary profession or employment changes or who becomes aware of a relationship which would deem any non-management Director as not independent following his or her election to the Board is to offer not to stand for re-election at the next election following such change. Whether or not such offer will be accepted by the Board will be based on the recommendation of the Nominating and Governance Committee.
The date of mandatory retirement from Board membership is the last day of the calendar month in which the Director reaches 72 years of age.
A Director who is also an employee of the Corporation may not serve on the Board of Directors following his or her departure from full-time employment by the Corporation.
Responsibility for providing assistance to the Board rests with the internal organization of the Corporation. However, the Board and Board Committees will have access to management at or outside of Board or Committee meetings and also may seek, as each may deem necessary, legal or other expert advice from sources independent of management, at the expense of the Corporation. The Audit, Compensation and Benefits, and Nominating and Governance Committees have the sole authority to retain, set the fees of, and terminate, respectively, the independent auditors, compensation consultants, and executive search firms.
Wyeth management is the primary contact with institutional
investors, the investing community, the media, etc. On occasion,
Directors may be asked by the Board or management to have direct contact with
others outside the Corporation in their capacities as Directors.
The independent directors of the Wyeth Board of Directors, as determined in accordance with Section II hereof, shall elect a Lead Director at such times when there is a Chairman of the Board of Directors who does not qualify as an independent director (as determined in accordance with Section II hereof), for such term and to perform such duties as specified by the Board of Directors and outlined in the Wyeth Charter of the Lead Director of the Board of Directors, which may be amended from time to time by the Board of Directors on the recommendation of the Nominating and Governance Committee of the Board of Directors.
The Chairman of the Board prepares Board meeting agendas based on discussions with Directors and management and business issues that arise. Annotated draft agendas for Board meetings are sent to Board members in advance of each meeting. Committee agendas are prepared based on the responsibilities and duties set forth in the Charter of each respective Committee, expressions of interest by Committee members and recommendations of management. Committee agendas are sent to Committee members in advance of each Committee meeting.
Information and materials regarding items requiring Board or Board Committee approval are distributed in advance of the respective meeting unless there are countervailing considerations such as confidentiality for its being held until the day of the meeting. Other information and materials are distributed in advance of the meetings or otherwise when important to the Board’s or the Committee’s understanding of a topic or issue, to facilitate discussion or generally to assist each Board member in fulfilling his or her fiduciary obligation to the Corporation and its shareholders. If a matter is particularly important, Board or Board Committee approval may be sought at a meeting subsequent to initial presentation. Following the meeting, confidential materials are returned to or left with the Corporation.
Non-management Directors meet without management at regularly scheduled executive sessions as part of Board meetings. One half of all such executive sessions each year will address topics pre-determined by the Board of Directors at the beginning of each year, in addition to such timely issues as may come before the executive session. These executive sessions are chaired on a rotating basis by the Chairmen of each of the Board Committees. In addition, at least one executive session per year shall be attended by independent directors only.
At least once each year, the Board of Directors shall hold an in-depth strategic planning meeting at which issues relating to the future direction of the Corporation will be analyzed and reviewed.
Each non-employee Director is required to hold at least five times the value of the annual cash Board service retainer payable for Board service in Wyeth stock and/or units while serving as a director of the Corporation. Directors shall have five years to attain this ownership threshold. Shares or units held by a Director under any deferral plan shall be included in calculating the value of ownership to determine whether this minimum ownership requirement has been met.
Trading in securities by Directors of the Corporation is governed by the Wyeth Securities Transactions Policy.
The Nominating and Governance Committee has the responsibility for recommending to the Board the amount and form of annual retainer, meeting fees, and other compensation and benefits to be paid or made available to Directors. Board compensation is designed to directly compensate Board members for service and not to create any real or apparent conflicts of interest. An independent study is undertaken biennially at the direction of the Nominating and Governance Committee to assist the Committee in its evaluation of Director compensation.
The Board plans for the succession to the position of Chief Executive Officer as well as certain other senior management positions. The Chief Executive Officer provides the Board with an annual assessment of each key senior manager and identifies potential successors to certain senior management positions.
The Board, in consultation with the Nominating and Governance Committee, conducts an annual review and evaluation of the functioning of the Board and of the independence of each non-management member of the Board. The Board, in consultation with the Nominating and Governance Committee, conducts an annual evaluation of the functioning of each of the Board Committees, which shall include a review of the annual self-evaluation made by each of the Committees.
Effective as of January 22, 2009, as amended by the Board of Directors on January 22, 2009, amended by the Board of Directors on November 20, 2008, amended by the Board of Directors on January 27, 2006; amended by the Board of Directors on January 27, 2005; amended by the Board of Directors on March 4, 2004; adopted by the Board of Directors on June 25, 2003, subject to final approval delegated to the Chairman of the Nominating and Governance Committee to approve changes conforming to the final New York Stock Exchange Corporate Governance Rules; approved by the Chairman of the Nominating and Governance Committee on November 20, 2003