Board Committees

What Board Committees do at PMI

The Board plays an important role in our long-term success. Six committees assist the Board, each with a different focus: 

1. Audit
2. Compensation and Leadership Development
3. Finance
4. Nominating and Corporate Governance
5. Product Innovation and Regulatory Affairs
6. Consumer Relationships and Regulation

Audit Committee

This committee assists the Board with:

• monitoring the Company’s financial reporting processes and systems of internal accounting control
• monitoring the independence and the performance of independent auditors
• monitoring the performance of the internal auditors
  

The Audit Committee consists entirely of nonmanagement directors, all of whom the Board has determined to be independent within the meaning of the listing standards of the New York Stock Exchange and Rule 10A-3 of the Securities Exchange Act of 1934. The Audit Committee's responsibilities are set forth in the Audit Committee Charter. As detailed in the Audit Committee Charter, all members of the Audit Committee are financially literate and at least one member is an ‘audit committee financial expert’ as defined by the regulations of the SEC.

Compensation and Leadership Development Committee 

This committee assists the Board with:

• discharging the Board’s responsibilities relating to executive compensation, including determining the compensation of the Chief Executive Officer
• producing an annual compensation committee report on executive compensation to be included in the Company’s proxy statement
• reviewing the succession plans for the Chief Executive Officer and other senior executives
  

This committee consists entirely of nonmanagement directors, all of whom are independent as determined by the Board. The Compensation and Leadership Development Committee’s responsibilities are set forth in the Compensation and Leadership Development Committee Charter.

Finance Committee 

This committee assists the Board with:

• monitoring the financial performance and condition of the Company
• overseeing the sources and uses of cash flow, overhead costs, operations costs, working capital, capital expenditure, and the investment of employee benefit plan assets
• advising the Board with respect to financing needs, dividend policy, share repurchase programs and other financial matters

The responsibilities of this committee are set forth in the Finance Committee Charter.

Nominating and Corporate Governance Committee 

This committee assists the Board with:

• identifying Board member candidates, based on criteria approved by the Board
• recommending candidates for election at the Annual Meeting of Shareholders
• making recommendations to the Board concerning the appropriate size, function, needs, and composition of the Board and its committees
• advising the Board on corporate governance matters
• overseeing the self-evaluation process of the Board and its committees

This committee consists entirely of nonmanagement directors, all of whom the Board has determined to be independent. The Nominating and Corporate Governance Committee responsibilities are set forth in the Nominating and Corporate Governance Committee Charter.

Product Innovation and Regulatory Affairs Committee 

This committee assists the Board with:

• the long-term product portfolio strategy of the Company, focusing on research and development of new products and services and improvements to existing products and services, with a particular focus on RRPs
• monitoring key legislative, regulatory and public policy issues and trends related to the research and development of the Company’s products and services, as well as the pre-market regulatory process of scientifically evaluating product performance and authorizing the sale of RRPs

The responsibilities of this committee are set forth in the Product Innovation and Regulatory Affairs Committee Charter.

Consumer Relationships and Regulation Committee 

This committee assists the Board with:

• overseeing the Company’s commercialization of RRPs
• monitoring key legislative, regulatory and public policy issues and trends related to the post-market regulatory environment that may limit consumer access to RRPs 
• the risks associated with changes in consumer preferences regarding RRPs

The responsibilities of this committee are set forth in greater detail in the Consumer Relationships and Regulation Committee Charter.