Governance
Corporate Governance Guidelines
NDB, Inc. is committed to maintaining the highest standards of corporate governance to ensure accountability, fairness, and transparency in our relationship with all stakeholders.
Last Updated: January 2025
Overview
Establishing the foundation for ethical and effective corporate governance
These Corporate Governance Guidelines have been adopted by the Board of Directors (the "Board") of NDB, Inc. (the "Company") to assist the Board in the exercise of its responsibilities and to serve the best interests of the Company and its shareholders. These Guidelines reflect the Board's commitment to monitor the effectiveness of policy and decision making both at the Board and management level, with a view to enhancing long-term shareholder value.
Core Governance Principles
- Accountability to shareholders and stakeholders
- Transparency in operations and decision-making
- Independence and objectivity in oversight
- Ethical conduct and compliance with laws
- Long-term value creation for shareholders
Board Composition & Independence
Ensuring diverse, qualified, and independent board membership
Board Size
The Board shall consist of not less than five (5) and not more than twelve (12) directors, with the exact number to be determined by the Board based on the Company's needs and circumstances. The Board believes this range allows for diversity of experience while maintaining effective communication and decision-making.
Director Independence
A substantial majority of the Board shall be independent directors as defined by applicable laws, regulations, and listing standards. The Board shall make an affirmative determination regarding the independence of each director annually, based on all relevant facts and circumstances.
Independence Criteria: A director is considered independent if the Board determines that the 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) that would interfere with the exercise of independent judgment.
Board Diversity
The Board values diversity in its broadest sense, including diversity of professional experience, skills, education, gender, race, ethnicity, and other individual qualities and attributes. The Nominating and Corporate Governance Committee considers diversity as one of many factors in identifying and recommending director nominees.
Board Responsibilities
Defining the Board's role in oversight and strategic direction
The Board's primary responsibility is to oversee the management of the Company and, in doing so, serve the best interests of the Company and its shareholders. The Board's key responsibilities include:
Strategic Oversight
Reviewing and approving the Company's strategic plans, major corporate actions, and significant capital allocations.
Management Selection
Selecting, evaluating, and compensating the Chief Executive Officer and overseeing CEO succession planning.
Risk Management
Overseeing the Company's risk management framework and ensuring appropriate systems are in place to identify and manage risks.
Financial Oversight
Reviewing and approving financial statements, monitoring financial performance, and ensuring integrity of financial reporting.
Compliance & Ethics
Ensuring compliance with applicable laws and regulations and promoting ethical conduct throughout the organization.
Performance Monitoring
Monitoring the Company's performance against strategic objectives and holding management accountable for results.
Board Committees
Specialized committees for focused oversight and governance
The Board has established the following standing committees to assist in discharging its responsibilities. Each committee operates under a written charter approved by the Board.
Audit Committee
The Audit Committee assists the Board in fulfilling its oversight responsibilities relating to the integrity of the Company's financial statements, the Company's compliance with legal and regulatory requirements, the independent auditor's qualifications and independence, and the performance of the Company's internal audit function and independent auditors.
Key Responsibilities:
- Appointing, compensating, and overseeing the independent auditor
- Reviewing financial statements and earnings releases
- Overseeing internal controls and risk management
- Reviewing related party transactions
- Establishing whistleblower procedures
Compensation Committee
The Compensation Committee reviews and approves the Company's compensation philosophy, policies, and programs, and determines the compensation of the CEO and other executive officers.
Key Responsibilities:
- Setting executive compensation and incentive programs
- Administering equity compensation plans
- Reviewing CEO and executive officer performance
- Overseeing succession planning for key positions
- Preparing compensation discussion and analysis
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee identifies individuals qualified to become Board members, recommends director nominees, develops and recommends corporate governance principles, and oversees the evaluation of the Board and management.
Key Responsibilities:
- Identifying and evaluating director candidates
- Recommending director nominees to the Board
- Developing corporate governance guidelines
- Overseeing Board and committee evaluations
- Reviewing director independence and conflicts
Committee Composition: All members of the Audit, Compensation, and Nominating and Corporate Governance Committees must be independent directors. The Audit Committee must have at least one member who qualifies as an "audit committee financial expert" as defined by SEC regulations.
Director Qualifications & Selection
Criteria for selecting and evaluating board members
Qualifications
Directors should possess the highest personal and professional ethics, integrity, and values, and be committed to representing the long-term interests of shareholders. The Nominating and Corporate Governance Committee considers the following criteria in recommending director candidates:
Professional Qualifications:
- Business or professional experience
- Industry knowledge and expertise
- Financial literacy and acumen
- Strategic thinking capabilities
- Leadership experience
Personal Attributes:
- Integrity and ethical standards
- Independent judgment
- Commitment and availability
- Communication skills
- Collaborative approach
Selection Process
The Nominating and Corporate Governance Committee is responsible for identifying, screening, and recommending candidates for Board membership. The Committee may use multiple sources for identifying candidates, including recommendations from current directors, management, shareholders, and professional search firms.
Director Orientation & Continuing Education
New directors participate in an orientation program that includes presentations by senior management on the Company's strategic plans, significant financial, accounting, and risk management issues, compliance programs, and key policies and practices. The Company encourages directors to participate in continuing education programs to maintain necessary skills and knowledge.
Term Limits & Retirement
The Board does not believe it should establish term limits or mandatory retirement ages. While term limits could help ensure fresh perspectives, they may result in the loss of directors who have developed valuable insight into the Company. The Board believes that the annual evaluation process is the appropriate mechanism for assessing director effectiveness and continued service.
Board Meetings & Executive Sessions
Ensuring effective communication and decision-making
Meeting Frequency
The Board holds at least four regular meetings per year, with additional special meetings as necessary. Board committees meet as frequently as their respective charters require or as necessary to fulfill their responsibilities.
Meeting Agenda & Materials
The Chairman of the Board, in consultation with the CEO and other directors, establishes the agenda for each Board meeting. Directors are encouraged to suggest items for inclusion on the agenda. Information and materials important to the Board's understanding of the business are distributed to directors in advance of meetings.
Executive Sessions
The independent directors meet in executive session without management present at least quarterly. The Chairman of the Board or Lead Independent Director, if applicable, presides over these executive sessions. Executive sessions provide an opportunity for independent directors to discuss matters without management present.
Director Attendance
Directors are expected to attend all Board meetings and meetings of committees on which they serve, and to spend the time needed to properly discharge their responsibilities. Directors are also expected to attend the Annual Meeting of Shareholders.
Director Compensation
Fair and competitive compensation for board service
The Compensation Committee periodically reviews director compensation to ensure it remains competitive and appropriate. Director compensation should fairly compensate directors for their work on behalf of the Company and align their interests with the long-term interests of shareholders.
Compensation Structure
Non-employee director compensation typically consists of:
- Annual cash retainer for Board service
- Additional retainers for committee chairs and members
- Equity-based compensation (stock options or restricted stock)
- Meeting fees (if applicable)
Employee Directors: Directors who are also employees of the Company receive no additional compensation for their service as directors.
Board & Committee Evaluation
Continuous improvement through regular assessment
Annual Evaluation Process
The Board and each committee conduct an annual self-evaluation to assess their effectiveness and identify areas for improvement. The Nominating and Corporate Governance Committee oversees this evaluation process.
Evaluation Areas:
- Board and committee composition and structure
- Quality and timeliness of information provided
- Meeting effectiveness and efficiency
- Board culture and dynamics
- Individual director contributions
- Relationship with management
Individual Director Assessment
The Nominating and Corporate Governance Committee considers each director's performance and continued appropriateness for Board membership when recommending director nominees for election. The Committee may request that a director not stand for re-election if it determines that the director is no longer able to fulfill their responsibilities effectively.
Management Succession Planning
Ensuring continuity of leadership and talent development
CEO Succession
The Board, working with the Compensation Committee, develops and maintains a succession plan for the CEO. The plan addresses both emergency CEO succession and succession in the ordinary course of business. The Board reviews the succession plan annually and updates it as necessary.
Senior Management Development
The Board reviews the Company's programs for management development and succession planning for key executive positions. The CEO provides the Board with recommendations and evaluations of potential successors, along with a review of development plans for high-potential employees.
Emergency Succession
The Company maintains an emergency succession plan that identifies interim successors for the CEO and other key executives in the event of an unexpected departure. This plan ensures business continuity and minimizes disruption to operations.
Code of Business Conduct & Ethics
Maintaining the highest ethical standards across the organization
The Company has adopted a Code of Business Conduct and Ethics that applies to all directors, officers, and employees. The Code addresses, among other things:
Ethical Conduct
Honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest between personal and professional relationships.
Legal Compliance
Compliance with applicable governmental laws, rules, and regulations, including insider trading laws and anti-corruption regulations.
Financial Integrity
Full, fair, accurate, timely, and understandable disclosure in reports and documents filed with regulatory authorities and in public communications.
Confidentiality
Protection of confidential information and proper use of Company assets and resources for legitimate business purposes only.
Reporting Violations
The Company maintains procedures for employees and others to report concerns about violations of the Code or other unethical or illegal conduct. Reports may be made anonymously through the Company's whistleblower hotline. The Company prohibits retaliation against anyone who reports concerns in good faith.
Conflicts of Interest
Identifying and managing potential conflicts appropriately
Policy
Directors and officers must avoid conflicts of interest between their personal interests and the interests of the Company. A conflict of interest occurs when an individual's private interest interferes, or appears to interfere, with the interests of the Company.
Disclosure Requirement: Directors and officers must promptly disclose to the Board any situation that may involve a conflict of interest. The Board, excluding any interested director, will determine whether a conflict exists and how to address it.
Related Party Transactions
The Audit Committee reviews and approves or ratifies all related party transactions in accordance with the Company's Related Party Transaction Policy. A related party transaction is any transaction in which the Company participates and in which a director, executive officer, or their immediate family members has a direct or indirect material interest.
Outside Directorships
Directors should advise the Chairman of the Board and the Chair of the Nominating and Corporate Governance Committee before accepting an invitation to serve on another public company board or audit committee. The Company recognizes that service on other boards can provide valuable experience and perspectives, but directors must ensure they have sufficient time to fulfill their responsibilities to the Company.
Stock Ownership Guidelines
Aligning director and executive interests with shareholders
Director Stock Ownership
To align the interests of directors with those of shareholders, the Board has established stock ownership guidelines for non-employee directors. Directors are expected to accumulate and maintain ownership of Company stock with a value equal to a specified multiple of their annual cash retainer.
Compliance Period: Directors have five years from the date of their initial election to the Board to achieve the required ownership level. Until the ownership requirement is met, directors are required to retain a specified percentage of net shares acquired through equity compensation.
Executive Stock Ownership
The Company maintains stock ownership guidelines for executive officers to ensure their interests are aligned with long-term shareholder value creation. The required ownership levels are expressed as a multiple of base salary and vary by position, with higher multiples for more senior executives.
Insider Trading Policy
The Company maintains an Insider Trading Policy that prohibits directors, officers, and employees from trading in Company securities while in possession of material non-public information. The policy also prohibits hedging transactions, short sales, and certain other transactions involving Company securities.
Stakeholder Communications
Maintaining open and transparent dialogue with stakeholders
Shareholder Communications
The Board believes that management speaks for the Company. Individual directors may, from time to time, meet or otherwise communicate with shareholders, but it is expected that such communications would occur with management present. Shareholders who wish to communicate with the Board may do so by writing to the Corporate Secretary, who will forward appropriate communications to the Board or individual directors as appropriate.
Public Disclosure
The Company is committed to providing timely, accurate, and complete disclosure of material information to shareholders and the public in accordance with applicable laws and regulations. The Board oversees the Company's disclosure controls and procedures to ensure the integrity of public communications.
Annual Meeting
The Company's Annual Meeting of Shareholders provides an important opportunity for shareholders to ask questions of directors and management. Directors are encouraged to attend the Annual Meeting to be available to answer shareholder questions.
Review & Amendments
Ensuring guidelines remain current and effective
Annual Review
The Nominating and Corporate Governance Committee reviews these Guidelines annually and recommends changes to the Board as appropriate. The Guidelines are also reviewed in response to significant changes in regulatory requirements, best practices, or the Company's circumstances.
Amendment Process
These Guidelines may be amended by the Board at any time. Any waivers of these Guidelines for directors or executive officers may be made only by the Board or a Board committee and must be promptly disclosed to shareholders as required by applicable laws and regulations.
Document Availability
These Corporate Governance Guidelines, along with the charters of the Board's committees and the Company's Code of Business Conduct and Ethics, are available on the Company's website at www.ndb.technology/governance. Printed copies are available to shareholders upon request.
Questions or Concerns
If you have questions about these Corporate Governance Guidelines or wish to report concerns about corporate governance matters, please contact: