| Our Board has adopted these corporate governance guidelines, which deal with
issues such as Board duties and responsibilities, director independence and conflicts
of interest. |
CORPORATE GOVERNANCE GUIDELINES
MARCH 5, 2013
Governance Guidelines Quicklinks
CORPORATE GOVERNANCE GUIDELINES
The Board of Directors (the "Board") of Thomson Reuters Corporation (the
"Corporation") believes that sound corporate governance practices are essential
to the well-being of the Corporation and its subsidiaries (collectively,
"Thomson Reuters") and the promotion and protection of its shareholders'
interests. The Board oversees the functioning of Thomson Reuters governance
system, in part, through the work of the Corporate Governance Committee.
The Board has adopted these guidelines, which reflect Thomson Reuters commitment
to high standards of corporate governance, to assist the Board in supervising
the management of the business and affairs of Thomson Reuters as required
under applicable law and stock exchange rules and requirements.
The fundamental responsibility of the Board is to supervise the management
of the business and affairs of Thomson Reuters with a view to sustainable
value creation for all shareholders. The Board seeks to ensure fair reporting,
including financial reporting, to shareholders of the Corporation and other
interested persons as well as ethical and legal corporate conduct by maintaining
an appropriate system of corporate governance, internal control over financial
reporting and disclosure controls and procedures. The Board believes that
Thomson Reuters is best served by a board of directors that functions independently
of management and that is informed and engaged.
The Corporate Governance Committee will review these guidelines annually,
or more often if warranted, and recommend to the Board such changes as it
determines necessary and appropriate in light of Thomson Reuters needs and
legal, regulatory and other developments.
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- BOARD COMPOSITION
- Board Membership Criteria
The Corporate Governance Committee is responsible for assessing the need
for new directors, the preferred experience and qualifications for new
directors, and the skills and competencies that the Board, its committees,
individual directors and candidates should possess. The Corporate Governance
Committee recommends candidates for initial Board membership and Board
members for renomination. Recommendations are based on character, integrity,
judgment, business experience, record of achievement and any other skills
and talents which would enhance the Board and overall management of the
business and affairs of Thomson Reuters. Each director must have an understanding
of Thomson Reuters principal operational and financial objectives, plans
and strategies, financial position and performance and the performance
of Thomson Reuters relative to its principal competitors. Directors must
be able to dedicate sufficient time to carry out their duties and not assume
responsibilities that would materially interfere with or be incompatible
with Board membership. Directors who change their principal occupation
are expected to advise the Corporate Governance Committee and, if determined
appropriate by the Corporate Governance Committee, resign from the Board.
- Director Independence
The Board's composition and procedures are designed to permit it to function
independently from management and to promote and protect the interests
of all shareholders. The Board believes that, except during periods of
temporary vacancies, no fewer than half of its members should be independent.
The Board determines whether a director is independent. In determining
independence, the Board relies on the applicable definitions in National
Instrument 58-101 â€” Disclosure of Corporate Governance Practices and
the New York Stock Exchange ("NYSE") listing standards. Generally, an independent
director means a director who has been affirmatively determined by the
Board to have no "material relationship" with Thomson Reuters. In determining
the independence of directors, the Board considers all relevant facts and
circumstances, including that in the normal course of business, Thomson
Reuters provides services to, and receives services from, companies that
some of the independent directors are affiliated with.
The Board reviews the independence of all directors on an annual basis
and publicly discloses its determinations. Directors have an ongoing obligation
to inform the Board of any material changes in their circumstances or relationships
that may affect the Board's determination as to their independence.
- Board Size
The Board is currently of the view that its optimal size for effective
decision-making and committee work is 14 to 16 members, and that its size
may vary from time to time because of or in anticipation of retirements
from the Board.
All directors are elected or appointed until the next annual meeting
of shareholders or until they resign or their successor is elected or appointed.
The Board does not believe it should establish term limits or mandatory
retirement ages for its members as such limits may deprive Thomson Reuters
and its shareholders of the contributions of members who have been able
to develop, over time, valuable insights into Thomson Reuters, its strategy
and business operations.
- Majority Voting Policy
The Board has adopted a majority voting policy which provides that if
a director does not receive the support of a majority of votes cast at
the annual meeting of shareholders, the director must tender his or her
resignation, to be effective when accepted by the Board. The Corporate
Governance Committee will consider the director's offer to resign and make
a recommendation to the Board as to whether to accept it.
- Board Succession
The Corporate Governance Committee is responsible for maintaining a succession
plan for the Board that is responsive to Thomson Reuters needs and the
interests of its shareholders.
- Service on Other Boards and Audit Committees
The Board does not believe that its members should be prohibited from
serving on the boards of other public companies so long as these commitments
do not materially interfere with and are not incompatible with their ability
to fulfill their duties as a member of the Board. Directors must advise
the Chairman or any Deputy Chairman in advance of accepting an invitation
to serve on the board of another public company and must indicate whether
another director of the Corporation is also a member of the board of that
public company. As a general rule, directors are not allowed to join a
board of another public company on which two or more other directors of
the Corporation serve.
Members of the Audit Committee may not serve on the audit committees
of more than two other public companies without the prior approval of the
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- BOARD RESPONSIBILITIES
Directors have a duty to act honestly and in good faith with a view to
the best interests of Thomson Reuters. In fulfilling its responsibilities,
the Board is responsible for the following matters:
- Appointment and Supervision of the Chief Executive Officer and Senior
The Board appoints and supervises the Chief Executive Officer and other
members of Thomson Reuters senior management, approves their compensation
and, as permitted by applicable law, delegates to senior management responsibility
for the day-to-day operations of Thomson Reuters.
The Board will satisfy itself that a process is in place to provide for
the development, evaluation and succession of the Chief Executive Officer
and other members of senior management. The Board maintains a position
description for the Chief Executive Officer.
The Board will satisfy itself as to the integrity of the Chief Executive
Officer and other members of senior management, including confirming that
the Chief Executive Officer and other members of senior management maintain
a culture of integrity throughout Thomson Reuters.
- Strategic Planning and Risk Management
The Board will establish and maintain Thomson Reuters mission, values,
long-term strategic goals, performance objectives and operational policies.
In this regard, the Board will:
- adopt a strategic planning process and review and approve, on an annual
basis, a strategic plan which takes into account, among other things,
the opportunities and risks of the business;
- review and approve on an annual basis a business plan developed with
management which includes rigorous but realistic goals;
- approve strategic and operational policies within which management
will operate in relation to capital expenditures, acquisitions and dispositions,
disclosure and communications, finance and investment, risk management,
human resources, internal control over financial reporting, disclosure
controls and procedures and management information systems;
- set annual corporate and management performance targets;
- confirm that a system is in place to identify the principal risks
facing Thomson Reuters and its businesses and that appropriate procedures
and systems are in place to monitor, mitigate and manage such risks;
- confirm that processes are in place for Thomson Reuters and its businesses
to address and comply with applicable legal, regulatory, corporate, securities
and other compliance matters.
- Financial Reporting and Management
The Board will:
- review and oversee the integrity of Thomson Reuters with regard to
its compliance with applicable audit, accounting and financial reporting
- approve annual financial statements and related
management's discussion and analysis;
- approve annual operating and capital budgets;
- confirm the integrity of Thomson Reuters internal controls and management
- approve Thomson Reuters dividend policy; and
- review operating and financial performance results relative to established
strategies, plans, budgets and objectives.
- Disclosure and Communications
The Board will satisfy itself that appropriate policies and procedures
are in place regarding public disclosure and restricted trading by insiders.
In this regard, the Board will periodically review Thomson Reuters corporate
disclosure policy and will confirm that a process is in place to disclose
all material information in compliance with Thomson Reuters timely disclosure
obligations and to prevent market abuse, whether by way of selective disclosure
of material information to analysts, institutional investors, market professionals
and others or otherwise.
- Corporate Governance
The Board will:
- develop Thomson Reuters approach to corporate governance, including
establishing appropriate principles and guidelines relating to corporate
governance that are specifically applicable to Thomson Reuters and practices
to facilitate the Board's independence;
- establish committees and approve their respective charters and the
limits of authority delegated to each committee;
- establish appropriate processes for the regular evaluation of the
effectiveness of the Board and its committees;
- approve the nomination of directors;
- review the adequacy and form of directors' compensation to confirm
that it is competitive and appropriately compensates directors for the
responsibilities, time commitment and risks involved in being a director
or a member of one or more Board committees, as applicable;
- arrange for non-management directors to meet at least quarterly without
management present and for independent directors to meet at least annually;
- ensure that sufficient funds are available for its effective operation
and that of its committees.
- Observance of Thomson Reuters Trust Principles
The Board will satisfy itself that Thomson Reuters observes and upholds
the Thomson Reuters Trust Principles.
- Approval of Certain Other Matters
The Board must itself approve those matters which may not be delegated
by the Board under applicable corporate law including, among others, the
issuance of securities (except in the manner and on terms authorized by
the Board), the declaration of dividends, the repurchase or redemption
of shares and matters relating to the adoption, repeal or amendment of
the by-laws of the Corporation. The Board may also reserve to itself the
right to approve certain matters notwithstanding the delegation to senior
management of the authority to manage the business of Thomson Reuters.
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- PRINCIPAL SHAREHOLDER
As of the date hereof, The Woodbridge Company Limited ("Woodbridge"), a
private company that is the primary investment vehicle for members of the
family of the late First Lord Thomson of Fleet, is the principal shareholder
of the Corporation. Woodbridge's primary investment is its investment in
the Corporation. It actively monitors Thomson Reuters as a principal shareholder.
In its involvement with Thomson Reuters, Woodbridge focuses principally on
the following matters:
- corporate governance, including the effectiveness of the Board;
- the appointment of the Chief Executive Officer and other members of senior
management and related succession planning;
- the development of the long-term business strategy of Thomson Reuters
and assessment of its implementation; and
- capital strategy.
With its substantial equity investment in the Corporation, Woodbridge considers
that its interests as a shareholder are aligned with those of all other shareholders.
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The Board will in each year elect from among its members a Chairman who
is not the Chief Executive Officer or otherwise a member of senior management.
The Chairman is principally responsible for overseeing the operations and
affairs of the Board. The Board maintains a position description for the
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- DEPUTY CHAIRMAN
The Board may in each year elect from among its members one or more Deputy
Chairmen who are not the Chief Executive Officer or otherwise members of
Any Deputy Chairman is responsible for assisting the Chairman in fulfilling
his duties and for performing additional duties requested by the Board.
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- LEAD INDEPENDENT DIRECTOR
The Board may in each year elect a Lead Independent Director from among
its members who have been determined to be independent.
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The Board will appoint an individual to act as the Secretary.
The Secretary is responsible for assisting the Chairman and any Deputy
Chairman in managing the operations and affairs of the Board and for performing
additional duties requested by the Chairman, any Deputy Chairman or the Board
or any of its committees. The Secretary reports directly to the Chairman
and any Deputy Chairman.
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- BOARD COMMITTEES
The Board carries out its responsibilities directly and through the following
committees and such other committees as it may establish from time to time:
the Audit Committee, the Corporate Governance Committee and the Human Resources
All committees are comprised solely of directors who are not members
of management and who are selected by the Board on the recommendation of
the Corporate Governance Committee. Thomson Reuters believes it is appropriate
for directors who are affiliated with Woodbridge to serve on committees
apart from the Audit Committee and the Board has approved the Corporation's
reliance on the "controlled company" exemption in the NYSE listing standards
to do so. Members of the Audit Committee must be independent and are subject
to the additional requirements that they may not (i) accept directly or
indirectly any consulting, advisory, or other compensatory fee from Thomson
Reuters, other than director and committee fees and pension or other forms
of deferred compensation for prior service (provided such compensation
is not contingent in any way on continued service), or (ii) be an "affiliated
person" of Thomson Reuters (within the meaning of applicable law). Each
member of the Audit Committee must be "financially literate" (within the
meaning of applicable law).
The Audit Committee, Corporate Governance Committee and the Human Resources
Committee are each chaired by an independent director who is selected by
the Board on the recommendation of the Corporate Governance Committee.
The chair of each committee is responsible for determining the agenda,
frequency and conduct of committee meetings. The Board maintains a position
description for the committee chairs.
Each committee has its own charter that sets out its responsibilities
and duties, qualifications for membership, procedures for committee member
removal and appointment and reporting to the Board. On an annual basis,
each committee's charter is reviewed by both the committee itself and the
Corporate Governance Committee and is also reviewed and approved by the
Board. Copies of each charter are posted on the Thomson Reuters website.
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- BOARD AND COMMITTEE MEETINGS
Board meetings are scheduled in advance at appropriate intervals throughout
the year. In addition to regularly scheduled Board meetings, additional
Board meetings may be called upon proper notice at any time to address
specific needs of Thomson Reuters. The Board may also take action from
time to time by unanimous written consent. A Board meeting may be called
by the Chairman, any Deputy Chairman, the Chief Executive Officer or any
Each committee meets as often as it determines is necessary to fulfill
its responsibilities. A meeting of any committee may be called by the chair
or any other member of the committee, the Chairman, any Deputy Chairman,
the Chief Executive Officer or the Secretary.
Board meetings are held in a manner and at a location determined by the
Chairman and meetings of each committee are held in a manner and at a location
determined by the committee chair. The Board generally meets at least once
a year at the offices of one of Thomson Reuters businesses so that directors
may meet operating management and develop a deeper understanding of a particular
The Chairman establishes the agenda for each Board meeting in consultation
with any Deputy Chairman, any Lead Independent Director, the other directors,
the Secretary and the Chief Executive Officer. Any director may propose
the inclusion of items on the agenda or at any Board meeting raise subjects
that are not on the agenda for that meeting.
Committee chairs establish the agenda for each committee meeting. Any
committee member may propose the inclusion of items on the agenda or at
any committee meeting raise subjects that are not on the agenda for the
- Meetings of Non-Management and Independent Directors
To facilitate the Board's independence, non-management directors meet
as a group after each Board meeting without management present. Non-management
directors may also meet without management present at such other times
as appropriate. Any Deputy Chairman, any Lead Independent Director or the
Chair of the Corporate Governance Committee will chair these meetings and
inform management of their substance to the extent that action is appropriate
or required. At least annually, the independent directors meet separately.
Any Lead Independent Director (or if none has been elected, the Chair of
the Corporate Governance Committee) chairs these meetings and informs the
Chairman of the substance of these meetings to the extent that action is
appropriate or required.
- Distribution of Information
Information that is important to the Board's understanding of the business
and its meeting agenda is distributed to the Board before it meets. Sensitive
subject matters may be discussed at a meeting without written materials
being distributed in advance or at the meeting. The Board periodically
receives reports on the operating activities of Thomson Reuters, as well
as reports on certain non-operational matters, including corporate governance,
insurance, pensions and treasury matters. Thomson Reuters maintains a secure
intranet site for directors, which is used to distribute information and
to foster communication among directors and between directors and Thomson
Reuters senior management.
- Preparation, Attendance and Participation
Each director is expected to prepare adequately for and attend all meetings
of the Board and any committee of which he or she is a member. A director
who is unable to attend a Board or committee meeting in person may participate
by telephone or teleconference.
Procedures for Board meetings are determined by the Chairman unless otherwise
determined by the by-laws of the Corporation or a resolution of the Board.
Procedures for committee meetings are determined by the chair of the
committee unless otherwise determined by the by-laws of the Corporation
or a resolution of the committee or the Board.
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- DIRECTOR COMPENSATION
Compensation for directors of the Corporation is designed to attract and
retain highly talented, committed and experienced directors. The Board believes
that directors must be competitively compensated, taking into account the
size and complexity of Thomson Reuters. The Corporate Governance Committee
is responsible for reviewing directors' compensation to ensure that it is
competitive and consistent with the responsibilities, time commitment and
risks associated with being an effective director and, to this end, periodically
reviews directors' compensation in the marketplace.
Non-management directors have the option to receive all or any portion
of their annual retainer in the form of deferred share units, common shares
of the Corporation or cash. If a director elects to receive any portion of
his or her annual retainer or other compensation in the form of common shares,
the amount (net of withholding taxes) is used to buy common shares on the
open market. If a director elects to receive deferred share units, units
representing the value of the common shares are credited to the director's
account based on the market value of a share. Deferred share units are paid
to the director by December 15 of the calendar year following termination
of Board service. Payment will be made in common shares or cash (net of withholding
taxes), based on the market value of the common shares on the date prior
to the payment date. Deferred share units also accumulate additional units
based on notional equivalents of dividends paid on the Corporation's common
shares. The Board believes that this plan further aligns the interests of
directors with the interests of other shareholders.
The Chairman, any Deputy Chairman and any Lead Independent Director receive
an annual retainer. The Chief Executive Officer does not receive additional
compensation for serving as a director.
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- REIMBURSEMENT OF EXPENSES
Directors are reimbursed by Thomson Reuters for reasonable travel and out-of-pocket
expenses incurred in connection with their duties as directors. The Corporate
Governance Committee periodically reviews expenses submitted for reimbursement.
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- SHARE OWNERSHIP GUIDELINES
The Board believes that meaningful share ownership by directors and senior
executive officers is in the best interest of Thomson Reuters because it
further aligns the interests of directors and senior executive officers with
those of its shareholders.
Directors are encouraged to hold common shares of the Corporation and/or
deferred share units having a value equal to at least three times the amount
of the annual directors' retainer by the later of (i) five years from the
date of their initial election or appointment to the Board and (ii) January
- Senior Executive Officers
The Chief Executive Officer is expected to hold common shares of the Corporation
and/or deferred share units having a value equal to at least five times
his or her annual base salary. The other senior executive officers of the
Corporation are expected to hold common shares of the Corporation and/or
deferred share units having a value equal to a multiple of their annual
base salary depending on their position with the Corporation.
The Chief Executive Officer and the other executive officers of the Corporation
do not have a deadline by which to meet the share ownership guidelines.
They are, however, expected to retain a specified percentage of the common
shares of the Corporation that they acquire (after applicable tax withholdings)
through option exercises and the vesting of restricted share units until
they have met the share ownership guidelines. The Chief Executive Officer
is currently expected to retain 100% of the common shares of the Corporation
that he or she acquires and the other executive officers of the Corporation
are expected to retain 50% of the common shares of the Corporation that
they acquire, until they meet the share ownership guidelines.
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- DIRECTOR ORIENTATION AND CONTINUING EDUCATION
New directors receive orientation materials describing the Thomson Reuters
business, its corporate governance structure and related policies and information.
New directors also have meetings with the Chairman, any Deputy Chairman,
any Lead Independent Director, Chief Executive Officer and Chief Financial
Officer and other executive officers, including the heads of Thomson Reuters
major businesses. Early in their tenure, new directors are provided with
the opportunity to visit major facilities and meet with operating management.
The Corporate Governance Committee is responsible for confirming that procedures
are in place and resources are made available to provide directors with appropriate
continuing education opportunities. Directors may attend continuing education
programs at Thomson Reuters expense.
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- BOARD ACCESS TO MANAGEMENT AND ADVISORS
The Board has complete access to members of Thomson Reuters management and
directors are encouraged to raise any questions or concerns directly with
management. The Board and its committees may invite any member of senior
management, employee, outside advisor or other person to attend or report
at any of their meetings.
In carrying out their duties, the Board and any of its committees may at
any time retain an outside advisor at the expense of Thomson Reuters and
have the authority to determine the advisor's fees and other retention terms.
Individual directors may retain an outside advisor at the expense of Thomson
Reuters subject to notifying the Corporate Governance Committee in advance.
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- PERFORMANCE ASSESSMENTS
The Board, acting through the Corporate Governance Committee, annually reviews
the effectiveness of the Board and each Board committee in fulfilling their
responsibilities and duties. The form of the Corporate Governance Committee's
annual review and assessment may vary from year to year, but is designed
to solicit constructive feedback on the performance of the Chairman, any
Deputy Chairman, any Lead Independent Director, the chair of each of the
Board committees and individual directors.
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- CODE OF BUSINESS CONDUCT AND ETHICS
The Board has adopted a Code of Business Conduct and Ethics. The Board expects
all directors, officers and employees of Thomson Reuters to conduct themselves
in accordance with the highest ethical standards and to adhere to the Code.
Any waiver of the Code for directors or executive officers may only be made
by the Board or one of its committees and will be disclosed by Thomson Reuters
to the extent required by law, regulation or stock exchange rules and requirements.
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- PROHIBITION ON PERSONAL LOANS
Thomson Reuters does not extend or maintain credit, arrange for the extension
of credit, or renew an extension of credit, in the form of a personal loan
to or for any director or executive officer.
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- INDEMNIFICATION AND INSURANCE
Directors are indemnified by the Corporation to the extent permitted by
applicable laws and regulations.
The Corporation maintains insurance for the benefit of its directors and
officers against any liability incurred by them. The amount and terms of
the insurance coverage are dependent upon prevailing market conditions and
practices with the objective of adequately protecting directors and officers
from such liability.
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- CONFLICTS OF INTEREST
Each director is required to inform the Board of any potential or actual
conflict of interest he or she may have with Thomson Reuters. A director
who has a conflict of interest in a matter before the Board or a committee
must not attend any part of a meeting during which the matter is discussed
or participate in any vote on the matter, except where the Board or the committee
has expressly determined that it is appropriate for him or her to do so.
To avoid potential conflicts of interest, interlocking directorships are
not allowed. Interlocking directorships occur where a member of senior management
of the Corporation serves on the board or as a trustee of a company or institution
that employs a director of the Corporation.
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- TO CONTACT THE BOARD AND ITS COMMITTEES
The Board welcomes input and comments from shareholders of the Corporation.
You may contact one or more members of the Board or its committees by writing
to the Secretary to the Board at:
Board of Directors of Thomson Reuters Corporation
c/o Deirdre Stanley, Executive Vice President, General Counsel and Secretary
Thomson Reuters Corporation
3 Times Square
New York, New York 10036
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