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Earlier this year your Board of
Directors unanimously determined that as a matter of good corporate
governance the Company should separate the role of its CEO from that of
the Chairman of the Board. Our experience in operating in this manner
since becoming a public company in 1992 has been very brief, but an
increasing number of public companies have adopted this model of
operation. Various reasons are advanced for the use of the
separated-versus-combined structures and both have their pros and cons.
After studying the matter at length and conferring with outside experts,
your Board concluded that at this point in time separation of the two
roles is our best path. In making this decision, we concluded that this
changed mode of operation will permit the Board to better carry out its
oversight activities as well as improve the handling of its
complementary supporting role to management as management executes the
Company’s business plan. At the same time, we feel that this change will
enhance our CEO’s ability to perform his operational management role.
As the Board’s non-executive Chairman, I will be working in every way I
can to facilitate a smooth transition to the Board’s new operating
structure. Years of working with our new CEO as a fellow director will,
I am sure, ease this task. I will, of course, be involved with the CEO
and Committee Chairmen in setting the agenda for Board meetings and will
preside at those meetings. More importantly, and from an operational
standpoint, I will be working to ensure that the responsibilities of the
Board are well understood by both the Board and management and that the
boundaries between the Board and management are clearly understood and
respected. I will use my best efforts to ensure that the Board’s
Committees operate as represented and that the Board maintains in place
a functioning process which permits the Board to assess its
effectiveness as well as that of its Committees and individual
Directors. Finally, and of equal importance to the above, I will work to
prevent the development of the so-called “boardroom atmosphere” which
was described by Warren Buffett and which, if present, would impede the
exercise by Board members of their independent judgment.
On a final note, your Board as constituted is composed of qualified
people who are drawn from different professions, businesses and
occupations. Their educational backgrounds and real-life experiences
bring to the Board the necessary skill sets to support management in
implementing the Company’s business plan while simultaneously fulfilling
the Board’s oversight responsibility in order to ensure compliance with
applicable laws and regulations as well as internal Company policy. It
is the Board’s intention over the next several months to add two members
who will bring complementary and similar skills to the Board. |
