Order from us for quality, customized work in due time of your choice.
Introduction
The analysis of corporation cannot be complete without approaching such a significant governance instrument as the board of directors. In simple terms the board of directors is an elected or assigned body of members who are given the authority and the responsibility to manage the corporation (Mancuso 47). Additionally, the responsibilities of the board include the vision and the mission of the company and the protection the interests of shareholders (Joyce and Woods 320). Within the rise of the recent corporate scandals, Enron being the most popularized, the interest to corporate governance has raised drastically. In that regard, the responsibilities of the board in reporting procedures were heavily emphasized. Despite the raised controversy, it can be stated that the role of the board cannot be overestimated in leading the strategic direction of the company.
In the light of the aforementioned, this paper analyzes the board of Edwards Lifesciences Corporation (EW), a global leader in the science of heart valves and hemodynamic monitoring (Edward Lifesciences Corporation About Edwards ), and a top constituent by market capital of the S&P 1000 index, compiled by Standard & Poors. The paper will provide an overview of the board in Edwards Lifesciences in terms of selection, background, and duties and responsibilities.
The Board
As of 2010, the board of directors in Edwards Lifesciences consists of eight directors, divided into three classes as follows:
Class I
-
Robert A. Ingram
-
William J. Link
-
Wesley W. von Schack
Class II
-
John T. Cardis
-
David E.I. Pyott
Class III
-
Mike R. Bowlin
-
Barbara J. McNeil
-
Michael A. Mussallem
Michael Mussallem serves as the Chairman of the Board of Directors and the Chief Executive Officer (CEO) since 2000, and is the only director of the board who is not independent. Other than the CEO, the criteria for directors independence are followed in accordance with NYSE rules, in which the majority of directors should be independent (Edwards Lifesciences Corporation Proxy Statement for the 2010 Annual Meeting of Stockholders 13).. Under NYSE independence criteria implies that [n]o director qualifies as independent under the NYSE rules unless the Board of Directors affirmatively 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) (13).
Selection
The directors selection procedure is performed through election, where the board nominates a director in one of their meetings to serve for a particular term. Accordingly, such nomination is based on the recommendations of the board of directors and is voted on by the companys stockholders, where each stockholder eligible to vote on a matter submitted to a stockholder vote shall be entitled to one vote, in person or by proxy, for each share of common stock entitled to vote held by such stockholder (Edwards Lifesciences Corporation Governance Guidelines ). The criteria, according to which the potential new board members are selected, invited and recommended, are developed by the Compensation and Governance Committee, who is also responsible for recommending the nominees for director, the annual determination and review of the directors independence, and recommending the compensation to be paid for the directors for their board service (Edwards Lifesciences Corporation Governance Guidelines ).
The Background
The field of specialty of Edwards Lifesciences Corporation revolves around medical innovations, namely products for the surgical repair procedures, hemodynamic monitoring of critically ill patients, and catheter-based technologies. Such direction in a combination of medicine and technology is largely reflected in the background of the currently serving board directors. With profit being one of the main goals of the company, financial and business education is also a recurring them in the directors biographies. In that regard, the common elements in the directors biographies can be seen in the following table (Edwards Lifesciences Corporation Proxy Statement for the 2010 Annual Meeting of Stockholders 9-12):
In that regard, it can be seen that the backgrounds of the board of directors almost equally distributed between medical, technological and business fields. Thus, it can be stated that skills, experience and expertise, evaluated by the Compensation Committee is related to the aforementioned fields.
Compensation
The compensation for nonemployee directors in Edwards Lifesciences is implemented through the Nonemployee Directors Program, in which each nonemployee director receives an annual grant of an option for up to 10,000 shares. The latter was a decision to align the interests of the directors with the interests of the company. In addition to the grant, the directors receive cash compensation. Generally, as of 2009, the nonemployee compensation of board directors was within $200, 000 range, with the exception of Link, whose stock awards earned him about $422,000 (Edwards Lifesciences Corporation Proxy Statement for the 2010 Annual Meeting of Stockholders 58). The basis for the compensation estimation is determined on the average compensation of comparable positions at competitive peer companies (5).
Roles and Responsibilities
The roles and the responsibilities of the board are attached to several areas of governance in the organization. In general these areas include decision making responsibilities, accountability responsibilities, and responsibilities in representing stakeholders. In terms of decision making areas, such responsibilities include reviewing the companys strategic plans for each major business in the company, reviewing key talent development {}. In terms of accountability, the responsibilities include supporting a corporate environment of internal controls, fiscal accountability, ethical standards and compliance with applicable governance policies, laws, and regulations (Edwards Lifesciences Corporation Governance Guidelines ). Accordingly, the board establishes the performance evaluation measures and objectives, through which the stockholders will be able to assess the role of directors, in terms of financial and operating goals and individual performance. The latter is used in determining the compensation for executive officers, in addition to the cash incentives and base salary. The responsibilities are fulfilled mainly through meetings, executive sessions, board agendas, periodic assessments, and the access to the companys management.
Conclusion
It can be concluded that corporate governance in Edwards Lifesciences Corporation plays an important role in the performance of the company. The variety of skills and expertise in the board makes their contribution valuable in addressing and protecting the needs of stockholders. The attachment of the performance of the company to the interests of the stockholders is vital in such representation of stockholders.
Works Cited
Edward Lifesciences Corporation. About Edwards . 2010. Edward.com. Web.
Governance Guidelines . 2010. Edwards.com. Web.
Proxy Statement for the 2010 Annual Meeting of Stockholders . 2010. Edwards.com. Web.
Mancuso, Anthony. Incorporate Your Business : A Legal Guide to Forming a Corporation in Your State. 3rd ed. Berkeley, Calif.: Nolo, 2005. Print.
Order from us for quality, customized work in due time of your choice.