At MasterCard we aspire to the highest standards of ethical conduct. This includes the reporting of results with accuracy and transparency; maintenance of full compliance with the regulations that govern our business.
To download the full Corporate Governance Guidelines (pdf) click on the link below:
|Corporate Governance Guidelines|
As of: September 2014
Board of Directors
The business and affairs of the Company are overseen by the Board of Directors. The Board of Director’s responsibility is to provide direction and oversight. The Board oversees the strategic direction of the Company and the performance of the Company’s business and management. The management of the Company is responsible for presenting strategic plans to the Board of Directors for review and approval and for implementing the Company’s strategic direction.
In addition to its general oversight of management, the Board of Directors also performs a number of specific functions, including:
The Board of Directors, with the assistance of the applicable committee, shall adopt a charter for each of the Nominating and Corporate Governance Committee, the Human Resources and Compensation Committee and the Audit Committee, and such charters shall comply with and include, at a minimum, those responsibilities required to be set forth therein by the rules of the New York Stock Exchange (the “NYSE”), by law or by the rules or regulations of any other regulatory body or self-regulatory body applicable to the Company.
In all actions taken by the Board of Directors, the directors are expected to exercise their business judgment in what they reasonably believe to be in the best interests of the Company. In discharging that obligation, directors may rely on the honesty and integrity of the Company’s senior executives and its outside advisors and auditors.
Number and Selection of Directors
The Board of Directors consists of not less than three and not more than fifteen directors, the exact number of directors to be determined by resolution adopted by the affirmative vote of the majority of the Board. The Nominating and Corporate Governance Committee shall consider and make recommendations to the Board of Directors concerning the appropriate size of the Board. Industry Directors (as defined in the Company’s certificate of incorporation) and directors who are officers or employees of the Company or any of the Company’s subsidiaries may serve on the Board of Directors subject to the limitations set forth in the Company’s By-Laws.
Candidates for nomination for election to the Board of Directors to fill new positions or vacancies are selected by the Nominating and Corporate Governance Committee, and recommended to the Board of Directors or stockholders for approval in accordance with the guidelines recommended by such Committee.
Each director holds office until a successor is elected and qualified, or until the director’s earlier death, resignation, removal or automatic termination. In no case shall a decrease in the number of directors remove or shorten the term of any incumbent director.
Qualification of Directors
With the exception of Industry Directors or any director who is an officer or employee of the Company or any of its subsidiaries, any person who is or has been during the prior 18 months a director, officer, employee or agent of, or represents or has represented, or is or has been during the prior 18 months otherwise affiliated with or otherwise has any business relationship that is material to such person with, a Member or Similar Person (as such terms are defined in the Certificate of Incorporation), may not serve as a director of the Company.
At least two-thirds of the members of any Executive Committee of the Board, the Audit Committee, the Human Resources and Compensation Committee or the Nominating and Corporate Governance Committee shall be Directors who are not Industry Directors, and no more than one Industry Director may serve on the Nominating and Corporate Governance Committee. No Industry Director shall participate in the process of nominating any person to serve as a director of the Company or selecting any person to serve as a director of The MasterCard Foundation. No Industry Director may serve as Chairperson of the Board. No officer or employee of the Company may serve as Chairperson of the Board of Directors unless the election or appointment of such officer to serve as Chairperson of the Board is approved by the affirmative vote of at least 75% of the entire Board of Directors.
In addition, no director shall be a trustee, officer, employee or agent of, or represent or otherwise be affiliated with, The MasterCard Foundation, or have been a director, officer, employee or agent of, or represented or been affiliated with, The MasterCard Foundation during the prior three years or otherwise have any business relationship with The MasterCard Foundation that is material to such person. No director shall be a director, regional board director, officer, employee or agent of or represent (1) an entity that owns and/or operates a payment card program competitive with the Company’s comparable card programs, as determined by the Board of Directors (a “Competitor”), or (2) an institution that is represented on any board of a Competitor.
Each director of the Company shall also serve as a director on the board of MasterCard International Incorporated.
To maintain the quality of the Board’s oversight and to protect against the possibility of damaging conflicts of interest, the Board shall have a majority of “independent” directors. No director will be considered “independent” unless the Board affirmatively determines that the director has no material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company). When making “independence” determinations, the Board shall broadly consider all relevant facts and circumstances, as well as any other facts and considerations specified by the NYSE, by law or by any rule or regulation of any other regulatory body or selfregulatory body applicable to the Company. When assessing the materiality of a director’s relationship with the Company, the Board shall consider the issue not merely from the standpoint of the director, but also from that of persons or organizations with which the director has an affiliation. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships (among others).
The Board has established the following guidelines to assist it in determining director “independence”:
The Company will disclose in its annual proxy statement its independence determination, including the basis for determining that a relationship is not material and any other pertinent information, with respect to each director standing for election.
An “immediate family member” includes a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than domestic employees) who shares such person’s home.
Additional “Independence” Requirements for Audit and Compensation Committee Membership
No director may serve on the Audit Committee or Human Resources and Compensation Committee of the Board unless such director meets all of the criteria established for audit committee or compensation committee service, as applicable, by the NYSE and/or (as applicable) the Sarbanes-Oxley Act, any other law and any other rule or regulation of any other regulatory body or self-regulatory body applicable to the Company.
Diversity of Directors
To the extent practicable and subject to the Board of Directors’ fiduciary duties, the Nominating and Corporate Governance Committee shall seek to foster diversity on the Board when nominating directors for election (other than the Chief Executive Officer, to the extent such officer shall be nominated) by taking into account geographic diversity to reflect the geographic regions in which the Company operates in a manner approximately proportional to its business activity, as well as diversity of age, gender, race, ethnicity and cultural background, and shall endeavor to have a Board of Directors representing a range of leadership and other experiences relevant to the Company’s global activities.
In order for any incumbent director to become a nominee of the Board for further service on the Board, such person must submit an irrevocable resignation, contingent on (i) that person not receiving a majority of the votes cast in an election that is not a Contested Election (as defined in the By-Laws) and (ii) acceptance of that proffered resignation by the Board. In the event an incumbent director fails to receive a majority of the votes cast in an election that is not a Contested Election, the Nominating and Corporate Governance Committee or such other committee designated by the Board pursuant to the By-Laws, shall make a recommendation to the Board as to whether to accept or reject the resignation of such incumbent director, or whether other action should be taken. The Board shall act on the proffered resignation, taking into account the committee’s recommendation within ninety (90) days following certification of the election results. The committee in making its recommendation and the Board in making its decision each may consider any factors and other information that they consider appropriate and relevant.
An incumbent director who fails to receive a majority of the votes cast in an election that is not a Contested Election and who tenders his or her resignation pursuant to the By-Laws shall remain active and engaged in Board activities while the Nominating and Corporate Governance Committee and the Board decide whether to accept or reject such resignation, or whether other action should be taken; provided, however, it is expected that such incumbent director will not participate in any proceedings by the Board or any committee thereof regarding whether to accept or reject such director’s resignation, or whether to take other action with respect to such director.
Term Limits and Retirement
In accordance with its charter, the Nominating and Corporate Governance Committee oversees an annual review of the performance of the Board of Directors and each committee of the Board of Directors. This review includes an examination of the composition of the Board of Directors as a whole and of each of its committees; an assessment of directors’ skills and areas of expertise; consideration of any changes in a director’s responsibilities since the director was last elected to the Board of Directors; and such other factors as may be determined by the Committee to be appropriate. The results of the Committee’s review of the Board of Directors and each committee are reported to the Board.
Board of Directors Meetings
Directors are expected to attend, and actively participate in, Board of Directors
meetings and meetings of committees on which they serve, and to spend the time
needed and meet as frequently as necessary to properly discharge their
responsibilities as directors. Information and materials that are important to a
director’s understanding of the business to be conducted at a Board of Directors or
committee meeting shall be distributed to the directors prior to the meeting, in
order to provide time for review beforehand. The Chief Executive Officer, in
consultation with the Chairperson of the Board (if not the same person) and
Corporate Secretary, determines the business to be conducted at each Board of
Directors meeting. Each director is free to suggest items for inclusion on the
agenda or to raise subjects that are not on the agenda for that meeting but that are
appropriate for the Board of Directors to address. The independent and nonmanagement
directors are afforded a regular opportunity to meet in executive
session (and, in the case of independent directors, at least annually), or more
frequently upon request of any independent or non-management director.
The chair of each committee, generally in consultation with the committee
members and management, determines the frequency and length of committee
meetings consistent with any requirements set forth in the committee’s charter.
The chair of each committee, in consultation with other members of the committee
and/or senior management of the Company, determines the business to be
conducted at committee meetings. The agenda for each committee meeting is
distributed to all committee members prior to the meeting.
Non-Employee Director Ownership Guidelines; Hedging/Pledging Prohibitions
Change in Director’s Other Responsibilities
The Board of Directors expects any director who has a material change in his or her other responsibilities, including retiring from his or her present employment, changing job responsibility in any significant way, becoming employed, retained or affiliated with any competitor of the Company or experiencing a significant change in his or her personal circumstances that reasonably may have an adverse effect on the director’s reputation or the reputation of the Company, to offer to the Chief Executive Officer, Chairperson of the Board, General Counsel or Corporate Secretary, to resign from the Board of Directors. Upon receipt of such offer, the Nominating and Corporate Governance Committee will promptly evaluate whether the Board of Directors should accept the resignation. The evaluation will be based upon a review of the appropriateness of such director’s continued service taking into account the changed responsibility. The Nominating and Corporate Governance Committee will also review whether the director continues to satisfy the Board of Directors’ qualifications for service and, as applicable, director independence standards.
While resignation may not be appropriate in all the foregoing instances, the Board of Directors believes that it would be desirable at that time to consider, through the Nominating and Corporate Governance Committee, the appropriateness of the Director’s continued service.
In the event that a director elects to join another public company board of directors or a fourth or more public company audit committee, such director will notify the Chief Executive Officer, Chairperson of the Board, General Counsel or Corporate Secretary in advance of accepting such appointment. In such event, the number of other public company boards and the number of other public company board audit committees on which a director may serve shall be subject to a case-by-case review by the Nominating and Corporate Governance Committee in order to ensure that each director is able to devote sufficient time to carry out his or her duties as a director.
Code of Conduct and Supplemental Code of Ethics
The Company does not make personal loans to any director or executive officer of the Company, or to immediate family members of any director or executive officer of the Company.
Board of Directors Confidentiality
Each director is expected to keep confidential any confidential or proprietary information relating to the Company that has been furnished to or acquired by the director in connection with his or her service as a director. No director may disclose any material, non-public information concerning the Company, unless required to do so by law or as authorized by the Board of Directors.
The Company has adopted Whistleblower Procedures, which establish a process for the receipt, retention, investigation and action on complaints and concerns from employees, stockholders and others regarding (1) accounting, internal accounting controls and auditing matters, (2) possible violations of, or noncompliance with, applicable legal and regulatory requirements, (3) possible violations of the Company’s Supplemental Code of Ethics for the Chief Executive Officer and senior officers or (4) retaliatory acts against anyone who makes such a complaint or assists in the investigation of such a complaint. The Audit Committee has assigned the General Counsel of the Company, who is the Company’s chief compliance officer, to initially receive, on behalf of the Audit Committee, and to investigate such complaints. The General Counsel is responsible for keeping a written docket of all complaints received under the Whistleblower Procedures and summarizing the nature of the complaint and other relevant information. The General Counsel will report any recent developments of items listed on the docket in reasonable detail to the Chairperson of the Audit Committee (or the full Audit Committee, if the Chairperson of the Audit Committee so directs) at, or in advance of, each regularly scheduled meeting of the Audit Committee (other than meetings convened principally to review the Company’s periodic reports under the Securities Exchange Act of 1934, as amended) or more frequently, if warranted. The Whistleblower Procedures are intended to enable employees, stockholders and others to make confidential, anonymous complaints and protect employees that make complaints from retaliatory action.
Third-Party Communications with Non-Management Directors
The Board has established the following procedures in order to facilitate communications between the Board and the stockholders of the Company and other interested parties. These procedures will be summarized on the Company’s public website and otherwise publicly disclosed as required pursuant to the rules and regulations of the NYSE and other applicable law.
Communications with the Board of Directors
Stockholders and other interested parties may contact any member (or all members) of the Board (including, without limitation, the director that presides over the executive sessions of non-management directors, or the non-management directors as a group), any Board committee or any chair of any such committee by mail or electronically. To communicate with the Board, any individual directors or any group or committee of directors, correspondence should be addressed to the Board or any such individual directors or group or committee of directors by either name or title. All such correspondence should be sent by e-mail to firstname.lastname@example.org or by mail to MasterCard Incorporated, Board of Directors c/o the Office of the Corporate Secretary, 2000 Purchase Street, Purchase, NY 10577.
The Company’s Corporate Secretary, or in his or her absence, another member of the Company’s Law Department, will open all communications received for the sole purpose of determining whether the contents represent a message to the directors. All correspondence that is not in the nature of advertising, promotions of a product or service, or is not trivial, irrelevant, unduly hostile, threatening, illegal, patently offensive or similarly inappropriate will be forwarded promptly to the addressee.
If correspondence reflects a complaint or concern that involves (1) accounting, internal accounting controls and auditing matters, (2) possible violations of, or non-compliance with, applicable legal and regulatory requirements, (3) possible violations of the Company’s Supplemental Code of Ethics for the Chief Executive Officer and senior officers or (4) retaliatory acts against anyone who makes such a complaint or assists in the investigation of such a complaint, the correspondence will be forwarded to the chair of the Audit Committee. If no particular director is named, such communication will be forwarded, depending on the subject matter, to the chair of the Audit, Human Resources and Compensation or Nominating and Corporate Governance Committee, as appropriate.
Communications Related to Whistleblower Procedures
Anyone who has concerns regarding (1) accounting, internal accounting controls and auditing matters, (2) possible violations of applicable legal and regulatory requirements, (3) possible violations of the Company’s Supplemental Code of Ethics for the Chief Executive Officer and senior officers or (4) retaliatory acts against anyone who makes such a complaint or assists in the investigation of such a complaint, may communicate these concerns by writing to the attention of the Audit Committee Chairperson at the address listed below:
Employees shall report such complaints or questions in accordance with the Company’s Whistleblower Policy. The Company prohibits any employee from retaliating or taking any adverse action against anyone who in good faith makes a complaint or provides assistance in resolution of a complaint.