AmeriCredit Corp. (“AmeriCredit” or the “Company”) is committed to developing effective, transparent and accountable corporate governance practices. Our corporate governance philosophy is to adopt practices that are not only fully compliant with New York Stock Exchange (“NYSE”) and other legislative requirements but that are genuinely effective - yielding a Board that is constructively and actively engaged in corporate oversight.
The Board’s primary responsibility is to oversee the affairs of the Company, to foster the creation of long-term shareholder value and to protect the Company’s best interests. The Board’s specific responsibilities include:
· Review and approval of the annual corporate budget, capital and operating plans and monitoring corporate performance against plans;
· Review and approval of major corporate actions or initiatives, such as significant acquisitions or divestitures, stock splits, or material capital expenditures;
· Providing counsel to AmeriCredit management in the development, review and approval of the corporate strategy and monitoring progress in the implementation of the strategy;
· Delegation of authority to the CEO to operate AmeriCredit in accordance with provisions of law and the corporate bylaws;
· Selecting, evaluating, compensating and if appropriate, replacing the Chief Executive Officer as well as developing plans to ensure effective and orderly development and succession of executive officers;
· Declaring dividends and approving stock repurchase programs, where appropriate; and
· Providing counsel to the CEO and, where appropriate, to senior management.
Directors are expected to attend all Board meetings and all meetings of Board committees on which they serve, having read and considered the pre-reading materials in advance of the meetings so as to arrive prepared to discuss, question, express a point of view and act on the agenda items.
Directors are expected to participate constructively in Board and committee meetings, drawing upon their individual experience, knowledge and background, as appropriate, to provide perspective and insights.
Directors are expected to keep current on relevant developments in business, governance and specific issues pertaining to AmeriCredit and its industry.
The majority of the Board of Directors of AmeriCredit will be comprised of independent directors who satisfy the independence requirements set forth in the NYSE’s listing standards, as amended from time to time. In addition, the Audit, Stock Option/Compensation and Nominating and Corporate Governance Committees of AmeriCredit will be comprised entirely of independent directors.
The Nominating and Corporate Governance Committee of AmeriCredit will review the independence of AmeriCredit’s directors on an ongoing basis to ensure that Board and Board committee composition is consistent with these guidelines and with the rules of the New York Stock Exchange and/or other applicable rules.
In determining the qualifications for members of the Board of Directors, the Nominating and Corporate Governance Committee will consider the following characteristics:
Integrity and Accountability
Character is the primary consideration in nominating and evaluating an AmeriCredit Board member. Directors should demonstrate high ethical standards and integrity in their business and personal dealings, and be willing to act on, and remain accountable for their boardroom decisions.
The ability to provide wise and thoughtful counsel on a broad range of issues. They should possess a high degree of intelligence, demonstrate prudent judgment and an awareness of the impact of their decisions on shareholders and other stakeholders.
The ability to read and understand a balance sheet, income statement and cash-flow statement and understand the use of financial ratios and other indices of financial performance.
The ability to work effectively as part of a team, valuing Board and team performance over individual performance. Openness to other opinions and willingness to listen are as important as the ability to communicate persuasively. Board members should work with each other responsibly, assertively and supportively and raise tough questions in a manner that encourages open discussion. The working relationship between members of the AmeriCredit Board and between the Board and management should be characterized by mutual respect.
The ability to provide counsel to management in developing creative solutions to problems facing the Company and in identifying innovative opportunities that can benefit the Company and its shareholders.
Commitment as demonstrated not only by attendance at Board meetings but by evident preparation and thoughtful participation in Board discussions, willingness to participate in urgent Board discussions on short notice, when applicable, and to be accessible to AmeriCredit’s senior management and other Board members, as necessary, outside of Board meetings.
The ability to provide different perspectives on issues presented to the Board. Diversity inclusive of race, gender, culture, thought and geography helps insure that different perspectives are presented.
The core competencies of the Board as a whole should be aligned with the corporate strategy of AmeriCredit, such that expertise is resident in the Board to address significant issues that the Board will be called upon to consider as AmeriCredit implements its corporate strategy. With this in mind, the core competencies of the Board as a whole may change over time and will be reviewed regularly by the Nominating and Corporate Governance Committee. The following are the core competencies that the AmeriCredit Board as a whole should possess at this time. Each Board member should contribute knowledge, experience and skills in one or more domain:
Accounting and Finance
Among the Board’s most important responsibilities is overseeing both AmeriCredit’s long-term corporate performance and the protection of long-term value through adequate internal financial controls.
In accordance with the requirements of the NYSE, the Board shall be comprised so that, at a minimum, all members of the Audit Committee of AmeriCredit shall be financially literate and one member shall be a “financial expert” as defined in section 407 of the Sarbanes-Oxley Act.
As Board members are being asked to make key decisions about AmeriCredit’s corporate strategy and corporate performance, it is vital that the Board have one or more members with a working knowledge and understanding of AmeriCredit’s industry and the competitive environment in which the Company operates.
One of the Board’s critical responsibilities is to approve corporate strategy, provide counsel to management on the development and execution of that strategy and monitor the implementation of the Company’s strategic plan. As such, the Board should have one or more members with the ability to provide strategic insight and direction by encouraging innovation, conceptualizing key trends, reviewing the assumptions of the senior management team in strategy development, sharpening the vision and providing broad, strategic perspective.
Understanding and Fostering Leadership
AmeriCredit’s performance will ultimately be determined by the ability of the Board of Directors and the CEO to attract, motivate, energize and retain a high-performance executive team. In addition, the Board must oversee AmeriCredit’s plans for leadership development and executive succession.
Business Judgment and Management Expertise
Shareholders rely on the Board of Directors to make sensible choices on their behalf. As such, the Board should have many members with a record of making good business decisions.
Board meetings will be conducted in a manner that ensures open communication, meaningful participation and timely resolution of issues. The Chairman of the Board will ensure that adequate time is provided for full discussion of important items and that management presentations are scheduled in a manner that allows time to be available for Board discussion of any presentations made and of other relevant issues.
The Board must be given sufficient information to fully discharge its responsibilities and oversight duties. This information comes from a variety of sources - management reports, a comparison of performance to plan, financial statements, articles in various business publications, investment analysts reports, etc. Wherever feasible, Board members will receive materials concerning matters to be acted upon well in advance of the applicable meeting. They may also request additional information of management either at the meeting or prior thereto through either the Chairman or the corporate secretary.
At least quarterly, the Board will meet in an executive session attended only by the independent directors without management present. The Chair of the Nominating and Corporate Governance Committee will serve as “acting chair” and will chair the executive sessions.
If any interested parties have concerns that they wish to make known to the independent directors, they should communicate these directly to Chair of the Nominating and Corporate Governance Committee.
Board members have complete access to AmeriCredit’s senior management. Except in unique circumstances, the CEO should be advised of significant interaction with management.
Board committees comprised of independent directors retain external advisors, as appropriate, in accordance with specific business needs. If management is retaining advisors to assist the Board or any Board committee, such decisions must be known and approved by the Board or the Board committee to which the advisor will provide assistance, in advance of such retention.
Should individual directors retain their own advisors, they shall notify the Nominating and Corporate Governance Committee. Fees of professional advisors retained by individual directors shall only be reimbursed with the approval of a majority of the independent directors on the Board or, in the event that an individual director retains legal counsel and prevails in an action against AmeriCredit, the legal fees relating to such action will be reimbursed to the individual director.
It is the responsibility of the Nominating and Corporate Governance Committee to identify and recruit candidates to serve on AmeriCredit’s Board of Directors. The recruitment of candidates shall be based on the individual core competencies and core competencies of the Board as a whole outlined in these Corporate Governance Guidelines.
The Chairman of the Board is responsible for the implementation of director orientation and continuing education at AmeriCredit. The Chairman works in conjunction with the Nominating and Corporate Governance Committee on these matters.
AmeriCredit will develop and regularly review an orientation program for new Board members that will include formal and informal sessions with other directors and senior executive officers and may include attendance at meetings of committees of which the newly elected director is not a member, so as to gain familiarity with the work of these Board committees and the issues they are addressing. The goal of AmeriCredit’s orientation program will be to integrate new directors to the Board so that they can quickly become sufficiently knowledgeable about AmeriCredit to contribute meaningfully to Board discussions and decision-making.
The focus of continuing education for AmeriCredit directors will be on practicality - developing educational opportunities that directors find meaningful and useful. These may range from educational sessions specific to issues confronting AmeriCredit and its industry to sessions covering corporate governance trends and issues.
The Nominating and Corporate Governance Committee of the Board is responsible for reviewing directors’ compensation levels and practices and making recommendations to the full Board with respect to directors’ pay. The goal of AmeriCredit’s directors’ compensation program is to fairly and adequately compensate Board members for their service to AmeriCredit and its shareholders. At the same time, the Committee seeks to ensure that the level of director pay is not so significant or excessive as to compromise director independence.
In determining an appropriate level of director pay, the Committee considers:
· The time commitment required of AmeriCredit directors to effectively fulfill their responsibilities and duties to shareholders;
· Director compensation levels and practices at comparable companies; and
· The proportion of directors’ compensation to be provided in AmeriCredit stock or other equity-based vehicles that would serve to align the interests of AmeriCredit directors with AmeriCredit shareholders.
Each director is expected to own stock in the Company, having a value that, by the third anniversary of the adoption of these guidelines or his or her election to the Board, whichever is later, equals twice the director’s annual retainer then in effect. The willingness of an individual to acquire and maintain an equity interest in AmeriCredit shall be discussed with any new nominees for the AmeriCredit Board of Directors by the Nominating and Corporate Governance Committee prior to his or her nomination.
A portion of the directors’ fees and committee fees may be paid in AmeriCredit stock to facilitate the accumulation of an equity interest in the Company.
The selection of the Chief Executive Officer, oversight of the CEO’s performance in leading the Company, motivation and appropriate compensation of the CEO to reflect performance and planning for succession are among the Board’s most important functions.
The Stock Option/Compensation Committee conducts the annual evaluation of the CEO’s performance in light of AmeriCredit’s goals and objectives. The Nominating and Corporate Governance Committee has primary responsibility to ensure that CEO succession planning is conducted by the Board. The full Board of Directors determines the selection of the CEO.
The Nominating and Corporate Governance Committee works with the CEO to ensure that a comprehensive plan is in place at AmeriCredit to develop executives capable of assuming effective corporate leadership. The plan includes specific developmental initiatives that may include educational programs, playing a significant role in the review and development of strategy for a business unit or the Company as a whole and the achievement of specified operational goals or milestones. The CEO annually provides the Nominating and Corporate Governance Committee with an assessment of senior management and of their potential to succeed him or her. The CEO also provides the Nominating and Corporate Governance Committee with an assessment of persons considered potential successors to certain senior management positions. At least once a year, the Nominating and Corporate Governance Committee and the CEO shall update the full Board on progress against the leadership development and succession plans. The Board may recommend changes to the leadership development and succession plans, as appropriate.
The Nominating and Corporate Governance Committee also works with the CEO to ensure that an effective plan is in place for executive succession in the event of an emergency situation. The full Board is updated on this plan at least once a year.
The Stock Option/Compensation Committee will work with the CEO to design and implement a comprehensive annual evaluation process for senior executives officers.
The Nominating and Corporate Governance Committee will oversee and facilitate a comprehensive self-evaluation of the Board of AmeriCredit and each of the Board committees on an annual basis to determine whether the Board and its committees are functioning effectively and to identify any areas to further enhance Board and committee operations.
The Nominating and Corporate Governance Committee will oversee a director peer review process as part of the annual re-nomination review process and for the ongoing professional development of Board members.