ATTPRO RRG RECIPROCAL RISK RETENTION GROUP CORPORATE GOVERNANCE GUIDELINES
The Subscribers' Advisory Committee of AttPro RRG Reciprocal Risk Retention Group (hereinafter the "SAC Board") has adopted the following guidelines to promote the effective governance of AttPro RRG Reciprocal Risk Retention Group ("Company"). The SAC Board will also review and amend these guidelines as it deems necessary or appropriate.
The SAC Board is responsible for overseeing the management of the business and affairs of the Company. The SAC Board acts as the ultimate decision-making body of the Company, except on those matters reserved to or shared with the subscribers and shareholders of the Company under the laws of the District of Columbia.
1. Director Qualifications
In choosing directors, the Company seeks individuals who have very high integrity, business savvy, shareholder orientation and a genuine interest in the Company. The Company is required to elect a majority of directors who are independent. All references to "independent directors" in these guidelines are to directors who are independent according to the criteria for independence established by Title 26-A DCMR 3775.99. The SAC Board does not have limits on the number of terms a director may serve. The SAC Board does not have any retirement or tenure policies that would limit the ability of a director to be nominated for reelection. The Executive Committee is responsible for nominating directors for election or reelection.
2. Subscribers' Advisory Committee Board Size and Committees
The SAC Board presently has three (3) members including two independent directors and one management, but not independent, director. Under the Rules and Regulations of the Company, the SAC Board has the authority to change its size, and the SAC Board will periodically review its size as appropriate. The Audit Committee of Berkshire Hathaway Inc., the ultimate controlling person of the Company and a Sarbanes-Oxley Compliant Entity, serves as the Audit Committee of the Company and satisfies the requirements of Title 26-A DCMR 3775.7 and 3775.8. The SAC Board has two additional committees (i) an Enterprise Risk Management Committee that works directly with the Company’s Audit Committee; and (ii) the Executive Committee. The Enterprise Risk Management Committee and the Executive Committee each consist of one independent director and one management, but not independent, director. The SAC Board may, from time to time, establish and maintain additional or different committees as it deems necessary or appropriate.
Each director shall be elected for a term of office to expire at the annual meeting of SAC Board next following his or her election. Despite the expiration of a director’s term, the director shall continue to serve until his or her successor is elected and qualified, or until the earlier of his or her death, resignation, disqualification or removal.
Any vacancy occurring in the SAC Board, from whatever cause arising, shall be filled by selection of a successor by a majority of the remaining independent members of the SAC Board. In the event there is only one remaining independent member of the SAC Board, the selection of a successor shall be made by the one independent member of the SAC Board and one management, but not independent, member of the Board. In the event that the vacancy or vacancies leave the SAC Board with no remaining members, no remaining independent members, or if the remaining members are unable to agree upon a successor, the vacancy may be filled by a vote of the SAC Board.
4. 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 Company and its subscribers and to conduct themselves in accordance with their duties of care and loyalty. Directors are expected to attend SAC Board meetings and meetings of the committees on which they serve, and to spend the time needed to carry out their responsibilities as directors, including meeting as frequently as necessary to properly discharge those responsibilities. Directors are also expected to review in advance all materials for the meetings of the SAC Board and the Committee(s) on which they serve.
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5. Director Access to Management and Advisors
Each director has full and free access to the officers of the Company. The SAC Board and each of its Committees has the authority to hire independent legal, financial or other advisors as it may deem to be necessary without consulting or obtaining the advance approval of any officer of the Company.
6. Subscribers’ Advisory Committee Board Meetings
The Chairman of the SAC Board is responsible for establishing the agenda for each SAC Board meeting. Each director is free to suggest items for inclusion on the agenda and to raise at any SAC Board meeting subjects that are not on the agenda for that meeting. At least once a year, the SAC Board reviews the Company’s long-term plans and the principal issues that the Company will face in the future.
7. Executive Sessions
The Executive Committee should meet on a periodic basis based solely on need. The presiding director at each executive session is chosen by the directors present at that meeting.
8. Director Compensation
Only directors who are neither an employee of the Company or an affiliate, nor a spouse of an employee, may receive compensation for serving on the SAC Board. Director fees are nominal and are limited to immediate compensation. Changes in the form and amount of director compensation are determined by the full SAC Board, taking into consideration the Company’s policy that the fees should be of no consequence to any director serving the Company. The SAC Board should critically review any amounts that a director might receive directly or indirectly from the Company, as well as any charitable contributions the Company may make to organizations with which a director is affiliated, in determining whether a director is independent. The Company does not purchase directors and officer’s liability insurance for its directors or officers.
9. Orientation and Continuing Education
All new directors receive an orientation from the President of the Company and are expected to maintain the necessary level of expertise to perform his or her responsibilities as a director. The Company does not maintain any formal orientation or continuing education programs.
10. Management Succession
Assuring that the Company has the appropriate successor to the current President in the event of his death, disability or retirement is one of the SAC Board’s primary responsibilities. The President reports annually to the SAC Board on executive management succession planning and makes available, periodically, his recommendation on succession in the event he died, became disabled or retired. The SAC Board and the Committees regularly review succession planning and the strengths and weaknesses of certain individuals currently employed by the Company or an affiliate who could succeed the President in the event of his death, disability or retirement. The Executive Committee is responsible for evaluation of the performance of the President.
11. Annual Performance Evaluation
The Executive Committee conducts an annual evaluation to determine whether the SAC Board and its Committees are functioning effectively and reports its conclusions to the SAC Board. Each of the Committees should conduct an annual evaluation of its performance relative to the requirements of the Rules and Regulations of the Company and reports its conclusion to the SAC Board. The SAC Board annually conducts a self-evaluation of its performance based in part on the reports of the Committees.
12. Public Disclosure of Corporate Governance Policies
The Company posts a copy of the current version of these guidelines on its website. Subscribers may also request a copy of the Company’s Code of Business Conduct and Ethics.