BY LAWS AND GOVERNANCE PROCEDURES AND POLICIES FOR THE BOARD OF DIRECTORS OF IPCRI
Ten Basic Responsibilities of Nonprofit Boards
IPCRI’S BOARD OF DIRECTORS INTERNAL BY-LAWS
I. Primary Responsibilities of the Board of Directors
The Board of Directors (the “Board”) of IPCRI, Ltd. (the “Company”), which is elected by the shareholders, selects the Chief Executive Officers who are charged with directing the Company's business. The primary function of the Board is therefore oversight - defining and enforcing standards of accountability that enable executive management to execute their responsibilities fully and in the interests of shareholders. Consistent with that function, the following are the primary responsibilities of the Board, which responsibilities may be delegated to one or more committees of the Board:
• Overseeing management and evaluating whether the Company's business is being effectively managed, which includes overseeing management’s efforts to implement and operate the Company’s accounting, financial and other controls;
• Selecting, regularly evaluating and planning for the succession of the Chief Executive Officer and such other members of executive management as the Board deems appropriate;
• Determining the salary and incentive compensation of the Chief Executive Officer, and determining the incentive compensation of all other officers and reviewing their salaries and making changes in such salaries as the Board deems appropriate;
• Reviewing the Company's strategic plans and objectives, including the principal risk exposures of the Company;
• Providing advice to the Chief Executive Officers and other executive management of the Company;
• Overseeing committees of the Board established for the execution of any delegated responsibilities of the Board;
• Evaluating the overall effectiveness of the Board.
In discharging their responsibilities, Directors must exercise their business judgment to act in a manner they believe in good faith is in the best interests of the Company and its shareholders. Directors are expected to attend all or substantially all annual shareholder meetings, Board meetings and meetings of the committees of the Board on which they serve. Directors are also expected to spend the time necessary to discharge their responsibilities appropriately and to ensure that other existing or future commitments do not materially interfere with their responsibilities as members of the Board.
II. Organization of the Board of Directors
A. Size and Composition
The Company's Certificate of Incorporation provides that the Board shall consist of not less than 16 members (8 Israelis and 8 Palestinians), as established by resolution of the Board.
A person who has passed his 73rd birthday will not be eligible for re-election for continued service as a Director. The Chairman and Chief Executive Officers shall discuss with a Corporate Governance and Nominating Committee whether the Board member should continue to serve in light of such changed circumstances. Nominations will be submitted to the Company Shareholders every two years or when and if positions become vacant in the interim.
C. Candidates for Board Membership
The Board is responsible for identifying candidates for Board membership. and for extending invitations to join the Board, subject to shareholder approval when required. Candidates are selected for their character, judgment, porfessional, business, political or education experience and specific areas of expertise, among other relevant considerations. The Corporate Governance and Nominating Committee is responsible for recommending to the Board a slate of nominees for election to the Board at the Annual Meeting of Shareholders and for recommending to the Board candidates to fill vacancies on the Board. Final approval of any candidate shall be determined by the full Board. Vacancies in the Board may be filled by a majority of the remaining Directors then in office.
D. Director Orientation and Education
Directors shall receive orientation materials that address the duties and obligations of a Director of the Company, the Company's history and background, compliance programs (including its Code of Business Conduct and Ethics), and recent earnings information and Securities and Exchange Commission filings. The orientation materials shall be updated periodically. In addition, the Company shall pay the reasonable expenses of attendance by a Director at director continuing education programs.
E. Frequency and Conduct of Meetings
The Board shall conduct regular meetings each year in accordance with the Company’s ByLaws and applicable law and listing standards – a minimum of one meeting every quarter. Additional meetings may be scheduled as necessary or appropriate. The Chairman and Chief Executive Officers shall prepare an annual schedule of meetings for the Board and its standing committees.
Certain matters shall be addressed by the Board at least annually. These matters shall include a review of the Company's (i) strategic plan and the principal current and future risk exposures of the Company; (ii) business and financial performance for the prior year, including a review of the achievement of strategic objectives; and (iii) the Company's compliance with applicable law. The proposed annual schedule of meetings of the Board and its standing committees shall be presented to the Board for approval.
The Chairman shall chair all meetings of the Board. The Company’s office amd budget manager and the General Counsel and Secretary shall also attend all meetings of the Board, subject to the Board's discretion to excuse one or more of these officers from all or portions of any meeting.
The Chairman and Chief Executive Officers shall establish an agenda for each meeting of the Board, which shall be sent to each Director prior to the meeting. In advance of a meeting, each Director shall review the agenda and any other materials sent to him or her regarding matters to be discussed at the meeting. Each Director may suggest the addition of any matter to a meeting agenda. Each Director may also raise at any meeting or executive session any subject that is not on the agenda for that meeting or executive session.
The Secretary of the Company or other designated person shall record minutes of all meetings of the Board, meetings of committees of the Board and meetings of shareholders. Minutes for all meetings of the Board and committees of the Board shall be submitted for approval at a subsequent Board or committee meeting. With respect to any matter, a Director voting against a proposal may ask to have his or her dissent recorded in the minutes of the meeting, and the Secretary shall do so.
II. Committees of the Board of Directors
There shall be three standing committees of the Board: Audit, Finance & Budget, and Nominating. Each standing committee shall have the authority and responsibilities provided for in the Company's By laws, the resolutions creating such committees and the applicable charter. From time to time, the Board may designate ad hoc committees in conformity with the Company's By Laws. The Board shall have the authority to disband any ad hoc or standing committee when it deems it appropriate to do so, provided that the Company shall at all times have such committees as may be required by applicable law or listing standards.
Each of the standing committees shall have a written charter, which shall be approved by the full Board and state the purpose and responsibilities of such committee. Committee charters shall be reviewed not less frequently than annually to reflect the activities of each of the respective committees, changes in applicable law or regulation and other relevant considerations, and proposed revisions to such charters shall be subject to approval by the full Board.
The committees shall conduct regular and special meetings in accordance with their respective charters and applicable law and listing standards. To the extent practicable, information regarding matters to be considered at committee meetings shall be distributed to committee members a reasonable period of time before such meetings.
A. Audit Committee
The purpose of the Audit Committee is to assist the Board in fulfilling its oversight responsibility relating to (i) the integrity of the Company's financial statements and financial reporting process and the Company's systems of internal accounting and financial controls; (ii) the performance of the internal auditing function; (iii) the annual independent audit of the Company's financial statements, the engagement of the independent auditors and the evaluation of the independent auditors' qualifications, independence and performance; (iv) the compliance by the Company with legal and regulatory requirements, including the Company's disclosure controls and procedures; (v) the evaluation of enterprise risk issues; and (vi) the fulfillment of the other responsibilities set out herein. The Audit Committee shall direct the production of the report of the Audit Committee required to be included in the Company's annual proxy statement.
B. Finance and Budget Committee
The purpose of the is to review the budget of the Company designed by the CEO’s, to make recommendations to the Board to approve an agreed to budget; to determine fiscal policies that will be approved by the Board including the level of compensation to personnel.
C. Nominating Committee
The purpose of the Corporate Governance and Nominating Committee is to identify individuals qualified to become members of the Board, to recommend to the Board nominees for each annual meeting of shareholders and nominees for election to fill any vacancies on the Board and to address related matters. The Corporate Governance and Nominating Committee shall also make recommendations to the Board with respect to corporate governance matters and be responsible for leading the annual review of the Board's performance.
III. Additional Operative Guidelines for the Board of Directors
A. Access to Management, Management Information and Counsel
Management shall be responsive to requests for information from Board members. The Chairman and Chief Executive Officers may invite members of management to make presentations at Board meetings in order to provide particular insights into aspects of the Company's business or to provide individuals with exposure to the Board for purposes of management development.
The Board and the committees thereof, as more particularly provided in their respective charters, shall be entitled, at the expense of the Company, to engage such independent legal, financial or other advisors as they deem appropriate, without obtaining the approval of any officer of the Company, with respect to any matters subject to their respective authority.
B. Evaluation of Board of Directors
The Corporate Governance and Nominating Committee shall oversee the evaluation of the Board. In discharging this responsibility, the Corporate Governance and Nominating Committee shall solicit comments from all Directors and report annually to the Board on the results of the evaluation. The Corporate Governance and Nominating Committee also shall assist the Board with the evaluation of the key committees of the Board, including recommending criteria for such evaluations.
C. Revisions to these Governance Guidelines
The Corporate Governance and Corporate Governance and Nominating Committee periodically shall evaluate these Corporate Governance Guidelines and recommend to the Board such revisions as it deems necessary or appropriate.
BOARD MEETINGS GUIDELINES
Order of business--[per agenda circulated in advance]
Only members and guests recognized by the Chair may speak.
Motions and Voting
Generally, before any item can be discussed, there should be a motion made and seconded. Once a motion has been seconded, discussion will follow. After discussion, one of four things can happen:
Motions must be clear and concise. A motion to "improve fund-raising" would be vague and discussions could meander. However, a motion to "sponsor a benefit golf tournament" is specific and could be effectively discussed and acted on.
Make general board meetings more productive by use of committees and rely on committee reports as a basis for action. Committees can sort through minutiae and come forward with a well-developed proposal for the whole board to consider. Committees can also be a development pool for future board members.
The Chair of the meeting is responsible for maintaining order. On procedural questions, the Chair's ruling will be determinative and final.