Corporate Governance Guidelines
Adopted December 29, 2017
The Board of Directors (the “Board”) of Liberty Latin America Ltd. (the “Company”) has adopted these Corporate Governance Guidelines as a framework for Board governance over the affairs of the Company for the benefit of its shareholders.
1. Roles of Management and the Board
The Company’s officers and employees, underthe direction of its Chief Executive Officer and the oversight of the Board, conduct the Company’s business with the goal of enhancing the long‐term value of the Company for the benefit of its shareholders. The Board is elected by the shareholders to oversee the management of the Company and to help assure that the interests of the shareholders are served.
2. Board Composition
Underthe Company’s Bye‐Laws,the number of directors ofthe Company should not be less than three or such greater number as 75% ofthe Board may approve.Also,the Company is to have a staggered board comprised of three classes, with each class having, as nearly as possible, a number of directors equal to one‐third of the total number of directors (subject to the rights of holders of any class of preferred shares which the Company may issue in the future). The Board currently believes that the optimal number of members of the Board is between six and twelve.
Candidates for nomination or re‐election to the Board will be identified by the Nominating and Corporate Governance Committee and recommended to the Board for approval.
Each director should meet the qualifications for Board membership set forth in Paragraph 3 below.
A majority of the Board will consist of directors who are independent, as determined in accordance with the corporate governance listing standards of The NASDAQ Stock Market, Inc. and the associated interpretative materials. Annually, the Board will review all relevant relationships of directors to determine whether directors meet such governance listing standards and are otherwise independent.
3. Director Qualification
Candidates for nomination or re‐election to the Board should possess the following qualifications, among others:
4. Director Responsibilities
The business and affairs of the Company will be managed under the direction of the Board in accordance with applicable law. The core responsibility of the directors is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its shareowners. Directors must fulfill their responsibilities consistent with their fiduciary duties to the shareowners, in compliance with all applicable laws and regulations. Directors will also, as appropriate, take into consideration the interests of other stakeholders, including employees and the members of communities in which the Company operates.
The Board provides advice and counsel to the Chief Executive Officer and other senior officers of the Company. The Board oversees the proper safeguarding of the assets of the Company, the maintenance of appropriate financial and other internal controls and the Company's compliance with applicable laws and regulations and proper governance.
To promote the discharge of this responsibility and the efficient conduct of the Board’s business, the Board has developed a number of specific expectations of directors.
5. Presiding Director; Meetings of Independent Directors
The Board will have a Presiding Director to preside over private sessions of the independent directors. The role of Presiding Director will rotate annually (between annual meetings of shareholders) among the Chairperson of the Compensation Committee, Nominating and Corporate Governance Committee and Audit Committee. The Presiding Director will discuss with the independent directors prior to each regularly scheduled Board meeting the need for a private session. In any event, the independent directors will meet in private session at leasttwice each year.
6. Director Access to Management
Each director will have unabridged access to senior management and other employees of the Company in order to become and remain informed about the Company’s business and for any other purpose relevant to the fulfillment of the responsibilities of a member of the Board.
7. Reporting Violations or Other Concerns
Anyone who wants to report a concern relating to the Company’s Code of Business Conduct or the Company’s accounting, internal accounting controls or auditing matters may communicate that concern directly to the Audit Committee of the Board or to any one or more of the non‐employee directors of the Company. Any such communication may be confidential or anonymous and may be made by mail, phone or fax or via a web‐based reporting system, in each case to the address, phone or fax numbers or website address specified in the “Code of Business Conduct” available on the Company’s website. Questions or concerns relating to accounting, internal controls, 4 auditing or officer conduct will be sent to the Chairman of the Audit Committee and any other non‐ employee director designated by the Board to receive such questions or concerns and at the same time will be reviewed and addressed by one or more members of management in the same way that other concerns are addressed by the Company. The status of all outstanding concerns addressed to non‐ employee directors will be reported to the Chairman of the Audit Committee on a regular basis. The Chairman of the Audit Committee (or any other non‐employee director designated by the Board) may direct that a matter be presented to the Board, the Audit Committee or another committee designated by the Board and may direct that various actions, including the retention of one or more outside advisors or counsel, be taken to assure that a concern is properly addressed.
8. Retention of Advisors
The Board may engage the services of independent consultants or advisors, at the Company's expense.
9. Director Compensation
The Board should annually review the form and amount of all types of compensation to be paid by the Company to or on behalf of members of the Board, including, without limitation, cash fees, equity incentives and contributions to charities at the behest of Board members. Board compensation should be customary, reasonable and competitive, as determined by the Board. Directors who are employees of the Company will not receive additional compensation for service on the Board or any committee of the Board. SuchDirectors may, however, have a portion oftheir base salary designated as being received.
10. Non‐Employee Director Equity Ownership Guidelines
Non‐employee members of the Board are encouraged to have an appropriate level of equity ownership in the Company in orderto align their economic interests with those of the other shareholders of the Company. As a guideline, each non‐employee director should own equity securities of the Company equal in value to at least $100,000 within three years of first being elected or appointed to the Board. Equity securities for this purpose include vested shares and share units that are deferred pursuant to any applicable deferred compensation plan and vested stock options and share appreciation rights. Vested stock options and share appreciation rights will be valued for this purpose at fifty percent (50%)
11. Orientation of New Directors
The Board or the Nominating and Corporate Governance Committee may develop and oversee an orientation program for new members of the Board. The orientation program should provide new directors with comprehensive information about the Company's business, performance, policies and procedures and the responsibilities and expectations of members of the Board.
12. Continuing Education
The Company will facilitate the participation of all Board members in continuing education programs, atthe expense ofthe Company,that are relevantto the business and affairs ofthe Company and the fulfillment of the directors' responsibilities as members of the Board.
13. Management Evaluation and Succession Planning
The Compensation Committee shall review and approve annually the corporate goals and objectives relevant to the compensation of the CEO and shall evaluate annually the CEO's performance in light of those goals and objectives.
The Board or an independent committee of the Board as the Board may designate from time to time, will develop a succession plan for selecting a successor to the Chief Executive Officer, both in the event of an emergency and in the ordinary course of business. The succession planning should include an assessment of the experience, performance and skills of possible successors. The succession plan will be reviewed at least annually by the Board.
Each year, the Board will conduct a self‐evaluation to determine whether it is functioning effectively. In connection with the annual self‐evaluation, the Chair of the Nominating and Corporate Governance Committee will be responsible for seeking from each director his or her evaluation of the performance of the Board. The Board will discuss these evaluations and determine what, if any, action should be taken to improve its performance.
The Board believes that the policies and procedures described in these Corporate Governance Guidelines should remain flexible to facilitate the Board's ability to respond to changing circumstances and conditions in fulfilling its responsibilities to the Company and its shareholders. Accordingly, the Board reserves the right to amend these Corporate Governance Guidelines or grant waivers hereunder, from time to time. Any such amendment or waiver will be disclosed if required by and in accordance with applicable securities laws and regulations and the Corporate Governance Rules of The NASDAQ Stock.
1 "Related party transaction" refers to any transaction which the Company would be required to disclose pursuant to Item 404 of Regulation S-K of the U.S. securities laws.