1. Board Size
It is the sense of the Board of Directors (Board) that constituting the Board at between seven and thirteen members is about the right size. This range provides diversity of thought and experience without hindering effective discussion or individual accountability. However, the Board may be willing to expand to a somewhat larger size to accommodate the availability of one or possibly more outstanding candidates.
2. Director Tenure and Retirement Age
It is the sense of the Board that term limits should not be established, and it is the policy of the Board that no Director should stand for reelection unless otherwise approved by the Nominating and Corporate Governance Committee and the Board.
3. Directors Who Change Their Present Job Responsibility
Management Directors are expected to submit a letter of resignation at the time of retirement from active employment with Nelnet, Inc. (the Company), or when transferring from a senior management position in the Company, other than as a result of promotion.
Subject to the following paragraph, non-Management Directors (i.e., Directors who are not Company officers whether or not they also qualify as “independent” Directors) are expected to submit a proposed letter of resignation under the following circumstances:
- when a Director retires from their principal business organization or other activity with which they were identified at the time of election to the Board;
- whenever a Director's affiliation or position of principal employment changes after election to the Board; and
- whenever the health or physical condition of a Director prevents them from satisfactorily fulfilling the responsibilities of the position
It is the sense of the Board that a non-Management Director who retires or experiences a change in the position they held when most recently elected to the Board should not necessarily leave the Board. There should, however, be an opportunity for the Nominating and Corporate Governance Committee to review, and to make a recommendation to the Board with respect to, the continued appropriateness of such non-Management Director's Board membership under these circumstances.
4. Independence of Directors
It is the policy of the Board that a majority of Board members, and all members of the Audit Committee, People Development and Compensation Committee, and Nominating and Corporate Governance Committee, are “independent” Directors in accordance with the requirements of the New York Stock Exchange (NYSE) and other applicable laws, rules, and regulations. A Director is not qualified as an “independent” Director unless the Board has affirmatively determined, pursuant to applicable legal and regulatory requirements, that such Director has no material relationship with the Company (either directly or as a partner, shareholder, or officer of an organization that has a relationship with the Company). The Board may adopt general standards to assist it in making such independence determinations. The Board discloses the basis for its determination of Director independence in the Company's annual proxy statement, or, if the Company does not file an annual proxy statement, in the Company's annual report on Form 10-K, filed with the U.S. Securities and Exchange Commission (SEC), in accordance with applicable legal and regulatory requirements. Compliance with the definition of “independent” Director is reviewed annually by the Nominating and Corporate Governance Committee.
5. Number of Directorships
It is the sense of the Board that Directors should not be limited from simultaneously serving on other public company boards. However, before accepting an invitation to serve on the board of another public company, each Director should consider whether such acceptance interferes with their responsibilities as a Director of the Company and should advise the Chair of the Board and the Chair of the Nominating and Corporate Governance Committee of any planned acceptance. Based on this notification, the Nominating and Corporate Governance Committee considers and either approves or denies permission for such Director to accept the invitation to serve on the Board of a public company.
6. Board Membership Criteria
The Nominating and Corporate Governance Committee is responsible for evaluating, and periodically reviewing with the Board, the appropriate mix of skills and characteristics required of Board members in the context of the perceived needs of the Board at a given point in time and shall periodically review and update the criteria as deemed necessary.
The following criteria are considered in selecting candidates for the Board:
- independence;
- wisdom;
- integrity;
- understanding and general acceptance of the Company's corporate philosophy;
- valid business or professional knowledge and experience that can bear on the Company's and the Board's challenges and deliberations;
- proven record of accomplishment with excellent organizations;
- inquiring mind;
- willingness to speak one's mind;
- ability to challenge and stimulate management;
- future orientation;
- willingness to commit time and energy; and
- diversity.
Consistent with past practices, the Board is committed to a strong and diverse membership and to a thorough process to identify those individuals who can best contribute to the Company's continued success. As part of this process, the Nominating and Corporate Governance Committee continues to take all reasonable steps to identify and consider for Board membership all candidates, including women and people of color, who satisfy the business needs of the Company at the time of appointment. The Nominating and Corporate Governance Committee seeks candidates with a broad diversity of experience, professional skills, and backgrounds. The Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. The Company believes the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge, and abilities that allow the Board to fulfill its responsibilities. Nominees are not discriminated against on the basis of race, gender, religion, national origin, sexual orientation, disability, or any other basis proscribed by law.
7. Selection of Directors
The Board is responsible for selecting Director nominees for election to the Board and for filling vacancies on the Board and newly created Directorships that may occur between annual meetings of shareholders. The Nominating and Corporate Governance Committee is responsible for identifying individuals qualified to serve on the Board and recommending that the Board select Director nominees for election to the Board and to fill vacancies and newly created Directorships. The Nominating and Corporate Governance Committee also considers proposals for nominees for Director from shareholders, which are made in writing to the Secretary of the Company in compliance with the bylaws of the Company, state corporation law, and SEC rules.
8. Chair of the Board
The Board has no policy respecting the need to separate or combine the offices of Chair of the Board and Chief Executive Officer of the Company. It is the sense of the Board that it should be free to make this choice any way that seems best for the Company at a given point in time.