Under Prudential’s Corporate Governance Principles, the independent directors of the Board annually elect a Lead Independent Director for a term of at least one year, who may serve for no more than three years. I am honored that my fellow independent directors elected me to succeed Thomas Baltimore, our previous Lead Independent Director, in May 2020.
Our directors share my commitment to strong, independent leadership, Board effectiveness and oversight. In this context, I would like to share my reflections on my first year as your Lead Independent Director.
You assumed the Lead Independent Director role in a year unlike any other. How did the Board adapt to the unprecedented challenges of 2020?
Our Board was equipped to respond quickly and without interruption to the global health crisis due to our robust contingency plans and the entire Board’s dedication to providing oversight of Prudential’s strategy, risk management and business operations.
The diverse mix of our directors with broad qualifications and attributes provided a strong foundation for management and the Board to navigate through the ongoing crisis with agility and live up to our purpose to make lives better by solving the financial challenges of our changing world.
The Lead Independent Director serves annually for a term of no longer than three years. What are the qualities Prudential independent directors seek when electing a Lead Independent Director?
My fellow directors and I believe that the Lead Independent Director should:
- possess a sophisticated knowledge and understanding of the Company’s business operations. This is gained by having adequate Board tenure to have experienced a number of business cycles;
- exercise independent judgment to support the Board’s Chairman when appropriate and the fortitude to challenge his or her actions when deemed in the best interest of the Company and its shareholders;
- exhibit strong interpersonal skills and the ability to build consensus; and
- influence the Board’s culture and insist on a high standard of ethics, candor and transparency, which builds trust and confidence in the Lead Independent Director’s leadership.
What is Prudential’s Board’s role in overseeing the Company’s inclusion and diversity strategy?
Our commitment to inclusion and diversity starts with the Board. Prudential’s Board and the Corporate Governance and Business Ethics Committee have oversight of talent, inclusion and diversity, and culture. Our Board leads by example – 82% of our independent directors are diverse. Since 2015, all five of our newly elected independent directors are diverse. Additionally, the full Prudential Board evaluates the Company’s commitment to inclusion and actively suggests policy enhancements.
Recognizing that diversity is imperative to the Company’s vitality, in 2018, we instituted a long-term incentive compensation modifier for the senior vice president level and above that is subject to a performance objective intended to improve the representation of diversity among senior management. I welcome you to read the results of this diversity modifier in this proxy statement’s Compensation Discussion and Analysis section.
In 2020, with the Board’s full support, Prudential announced Nine Commitments to Racial Equity, fortifying the Company’s history of pursuing meaningful and enduring progress to advance racial equity. The Commitments and our progress are outlined in this proxy statement and Prudential’s Environmental, Social and Governance Summary Report.
How do you determine if the Board’s culture is filtering through the organization?
I believe the most effective way to gauge corporate culture is to meet directly with a company’s team members. Our directors are encouraged to engage with Prudential employees–at all levels–to gain insight regarding how employees throughout the organization are aligned with the Company’s business model, values and our culture. Prudential directors speak at our Business Resource Groups events, including the Black Leadership Forum, Juntos (LatinX employees), PRIDE (LGBTQ+ employees) and Women Empowered. I personally have spoken at a Women Empowered event and at our annual Legal, Compliance and Business Ethics offsite.
How are the Board’s committees structured to maintain independence and provide for comprehensive oversight?
Our Board Committees are comprised solely of independent directors. This structure further solidifies our commitment to perform our role with independent thought and action on behalf of our shareholders. A full list of our Board Committees, the Committees’ mandates, and members are available in this proxy statement.
Your Board will continue its focus on meeting the needs of our customers cultivating an inclusive workplace for our global employees, building a strong and sustainable future, and retaining our leading competitive position. The events of 2020 have only strengthened our culture to meet these objectives, and we have never been more confident in our ability to create long-term value for our shareholders.
Christine A. Poon
Lead Independent Director