Good Governance Sharpens EMC’s Competitiveness
Joe Tucci, EMC Chairman and CEO
Governance plays a prominent role at EMC and has for a long time. It helps us compete more effectively, sustain our success, and build long-term value for our shareholders.
We know that governance is only as strong as the Board of Directors behind it. At EMC, we are fortunate to have a highly experienced, well-informed, and fully engaged Board. To maintain a strong system of checks and balances, our Board takes an active role in providing oversight of and guidance to the Company’s executive management team. This approach ensures that EMC is pursuing a sound strategic direction, adjusting to changes in the external environment, assessing and managing risk, and seeing all of its opportunities for growth.
EMC currently has 12 Board members, 10 of whom are independent. All members of the Board’s Audit, Corporate Governance and Nominating, and Leadership and Compensation Committees are independent. And since January 2006, the Board has operated with an independent Lead Director, whose responsibilities include working with the Chairman to set the agenda for board meetings, presiding at executive sessions of the “non-management” Board members, and overseeing performance evaluations of the Board.
Each Board member is required to stand for election annually. This gives our shareholders the opportunity to register their views each year on the Board's overall performance and on each member's individual performance. We have also adopted a majority vote standard for the election of Directors: each incumbent Director must receive more votes cast "for" his or her election than votes cast "against" his or her election to be elected. This requirement gives our shareholders a more meaningful role in Director elections.
Our Corporate Governance Guidelines are comprehensive. They cover Board-member criteria and Director responsibilities, Lead Director responsibilities, management succession planning, selection and evaluation of the CEO, Director compensation, assessment of Board performance, and more.
In addition, shareholders have the opportunity to provide an advisory vote on executive compensation every year. In our Proxy Statement, you can find a detailed discussion of the philosophy, objectives, and design of EMC's executive compensation program. The Leadership and Compensation Committee links a substantial portion of our executives' compensation to the attainment of challenging goals that will drive EMC to achieve profitable revenue growth and market share gains. The Board and the Committee value shareholder opinion and consider shareholder views when determining executive compensation.
EMC's Board makes it easy for investors and other stakeholders to communicate directly with non-management Directors, the Audit Committee, and the Leadership and Compensation Committee. The Board is interested in the views of shareholders and other stakeholders and makes a serious effort to provide responses that are clear, candid, and timely.
Experience has shown us that good governance increases EMC's competitive power, enhances the Company's performance, and improves our ability to create more value for shareholders. And that is why EMC strives continually to improve its governance.