Board of Directors' Corporate Governance Principles
As amended December 4, 2009
The Board of Directors (the “Board”) is elected by the stockholders of Amgen Inc. (the “Company”) to serve their interests in the conduct of the Company’s business. The Board is responsible for selecting management, in particular the Chief Executive Officer, and for ensuring that the long-term interests of stockholders are advanced by the Company’s management in the operation of the business. The Board will also abide by the measures set forth in the Directors’ Code of Conduct, adopted by the Board December 12, 2006, as a guide to the high ethical and legal standards expected of its members.
The Company’s system of corporate governance emphasizes the Board’s independence and strengthens its ability to evaluate corporate and management performance. These corporate governance principles have been approved and adopted by the Board and provide the framework for the governance of the Company.
1. To be effective as a
working group, the Board should consist of no more than fourteen (14) members,
but no less than nine (9), of which no more than two (2) may also be employees
or officers of the Company.
2. The Governance and
Nominating Committee, composed solely of directors who qualify as independent
under Nasdaq listing requirements, has the responsibility of advising the Board
on all board governance matters, including recommending the composition, role,
structure and procedures of the Board; recommending the appointment,
composition and responsibilities of the committees of the Board; and
identifying and presenting qualified candidates for election and re-election as
3. The Audit Committee and
the Compensation and Management Development Committee also consist solely of
directors who qualify as independent under Nasdaq listing requirements. In
addition, all members of the Audit Committee shall qualify as independent under
Securities and Exchange Commission rules, and all members of the Compensation
and Management Development Committee shall qualify as “outside directors” under
the requirements of Section 162(m) of the Internal Revenue Code of 1986, as
amended, and as “non-employee directors” within the meaning of Rule 16b-3 of
the Securities Exchange Act of 1934, as amended.
4. The Compensation and
Management Development Committee annually evaluates the performance of the CEO
and executive management for purposes of determining executive compensation.
5. Each Board committee
shall adopt and maintain a written charter that shall be reviewed periodically
by such Committee under the oversight of the Governance and Nominating
Committee and approved by the Board. The Board will designate the Chair of each
6. At least annually the
Board will review the performance of the Company’s CEO, and management
development and succession planning.
7. Compensation for
executive officers is linked to share price performance, operating objectives
and other factors, including adherence to the Company’s code of conduct.
8. The schedule and length
of Board meetings allow sufficient time for in-depth discussions, analysis and
9. Independent directors
meet privately on a regular basis. The Chair of the Governance and Nominating
Committee presides at such meetings.
10. The Board meeting is
designed to encourage interaction between directors and the Company’s
11. The Board and its
committees have ready access to management and the authority to retain independent
advisors and counsel as the Board or such committee deem advisable. The
Compensation and Management Development Committee has the sole authority to
hire and terminate compensation advisors for senior management compensation
review. The Audit Committee has the sole authority to hire and terminate the
outside auditors. The Governance and Nominating Committee has the sole
authority to hire and terminate search firms to identify director candidates
and compensation advisors on directors’ compensation.
12. In the event an incumbent
director up for re-election at a stockholder meeting fails to receive a
majority of affirmative votes in an uncontested election, the Board shall
adhere to the director resignation policy as provided in Amgen’s Bylaws.
13. Board members who are
newly appointed shall receive orientation and education about the Company, its
business and its financial operations and about the functioning of the Board.
Continuing education shall be provided for all members of the Board and shall include
such topics as critical issues affecting the Company and its industry overall,
and directors’ roles and responsibilities (including general and legal guiding
14. Directors should limit
the number of for-profit boards on which they serve in order to ensure that
such service does not interfere with the director’s ability to fulfill his or
her duties as a member of the Board. A director who is currently serving as the
Company’s CEO should not serve on more than four public company boards. No
director should serve on more than six public company boards. Directors should
notify the Chair of the Governance and Nominating Committee prior to accepting
an invitation to serve on a public company board or private company board to
permit the Governance and Nominating Committee to evaluate the relationship for
a potential conflict of interest and to confirm that the director continues to
have time available to perform his/her duties to the Company.
15. Directors should not
enter into, without the prior approval of the disinterested members of the
Board, any transaction or relationship with Amgen in which they will have a
financial or personal interest (either directly or indirectly, such as through
a family member or other person or organization with which they are
associated), or any transaction or situation which otherwise involves a
conflict of interest.
16. If any actual or
potential conflict of interest arises for a director, or a situation arises
giving the appearance of an actual or potential conflict, the director shall
promptly inform the Chairman of the Board or the Chair of the Governance and
Nominating Committee. The Board, after consultation with counsel, will take
appropriate steps to identify the actual or apparent conflicts and ensure that all
directors voting on an issue are disinterested with respect to that issue. All
directors will recuse themselves from any discussion or decision so found to
affect their personal, business or professional interests.
17. Directors’ compensation
is reviewed periodically and includes cash and stock-based incentives. Board
members who are also employees of the Company shall not be separately
compensated for their service on the Board.
18. Directors retire from the
Board on the day of the Annual Meeting of Stockholders following their 72nd
birthday. Members of the Board who are also employees of the Company will
retire from the Board coincident with their retirement as full time employees
of the Company.
19. All directors shall offer
their resignation to the Chair of the Governance and Nominating Committee upon
any significant change in their principal business or professional affiliation
or responsibility, including a change in their principal occupation. The
Governance and Nominating Committee shall determine whether to accept the
resignation based on what it believes to be in the best interests of the
Company and its stockholders.
20. The Board shall evaluate,
no less than annually, the Company’s compliance and reporting systems.
21. The Board reviews its
performance on an annual basis.
22. The Board sets the corporate governance principles and reviews them at least annually.