Edwards Lifesciences’ work to improve Corporate Governance supports our Aspiration to Create Exceptional Shareholder Value.
Through our corporate governance practices, the Board of Directors and management create a powerful and responsible organization from the top. This begins with our Chairman and CEO, who regularly meets with key stakeholders including investors, customers, patients, employees and legislators to discuss their needs and share our progress. Our governance practices guide us as we grow, so that our leaders’ values align with those of our company and our unique, patient-focused culture.
Our Board of Directors
A talented and knowledgeable team of directors oversees our organization’s success. The Board has outlined expectations for Board service that demonstrate our commitment to ethical and effective governance. These guidelines cover topics such as:
- Board size and composition
- Selection process and required qualifications of Board members
- Board members' fiduciary duties
- Board oversight for strategic planning and fiduciary responsibility
- Process for performance evaluations
- Responsibilities of Board committees
Edwards’ 2017 Proxy Statement describes for shareholders our corporate governance practices. Our Board of Directors consists of eight members who share responsibility for oversight of the development of corporate strategy, financial and operational risk, information security and cybersecurity, among others. The Board has established two committees:
- Audit Committee – Responsible for oversight of financial statements, legal and regulatory requirements and audit functions.
- Compensation and Governance Committee – Responsible for the compensation of executives and directors, employee benefit plans, sustainability and corporate governance matters.
Our CEO, CFO and Vice President of Investor Relations regularly meet with current and prospective stockholders to discuss our strategy and performance. We seek and incorporate feedback on issues related to governance, compensation and other matters.
Additional information about Edwards’ corporate governance practices can be found in our Bylaws, Corporate Governance Guidelines and the Charters of the Audit Committee and the Compensation and Governance Committees.
Governance for Sustainability
The Compensation and Governance Committee of our Board of Directors has oversight for Edwards’ sustainability principles and periodically reviews reports on our progress. Our Chairman and CEO also has performance management objectives for improving our sustainability strategy, metrics and disclosure. The Edwards Sustainability Council develops and drives the implementation of these initiatives. Led by our Chief Responsibility Officer, the Council comprises leaders from functions across the organization. These include:
- Corporate Responsibility
- Corporate Secretary
- Corporate Strategy
- Enterprise Risk Management
- Environmental Health & Safety
- Global Communications
- Global Corporate Giving
- Global Quality
- Government Affairs
- Human Resources
- Investor Relations
- Supply Chain
Council members represent their specific areas of responsibility and collaborate to identify priorities, set goals and improve performance. They meet regularly to review Edwards’ progress and strategize next steps. Our Chief Responsibility Officer reports on the Council’s activities to the Compensation and Governance Committee of Edwards’ Board of Directors, as well as to our Executive Leadership Team.
Annual PerformanceEdwards continually strengthens our governance structures to promote business success and drive our culture of responsibility.
Engaging Our Stockholders
In 2016 and early 2017, as part of our regular program of shareholder outreach, members of Edwards’ management team contacted our top 10 shareholders, representing about 38 percent of outstanding shares. We engaged in conversations with shareholders representing approximately 20 percent of outstanding shares. Through these efforts, Edwards received general feedback related to governance practices, executive compensation and sustainability.
Changes in Governance
In 2016, Edwards appointed two new directors to our Board: Steven R. Loranger in March and Leslie Heisz in July. Mr. Loranger brings experience in global operations and manufacturing, while Ms. Heisz is an experienced investment banker and finance executive.In accordance with Edwards’ director retirement policy, Mr. John T. Cardis retired from the Board on May 11, 2017. At that time, the size of the Board of Directors was reduced to eight.
In November 2015, the Board’s Compensation and Governance Committee began to review Edwards' political activities to achieve compliance with its policies for political transparency. This includes review and approval of:
- The company's policy on political expenditures.
- Political expenditures made with corporate funds.
- Payments to trade associations and other tax-exempt organizations that may be used for political purposes.
Over the past year, our Sustainability Council made significant progress in identifying and reporting on our most important environmental, social and governance topics. Their achievements include:
- The Sustainability Council approved sustainability goals and set sustainability targets that align with our five Corporate Aspirations
- Published Edwards’ first online Sustainability Report
- Published Edwards’ first Sustainability Metrics-at-a-Glance to provide a snapshot of our environmental, social responsibility and governance data from 2015 and 2014
- Worked with a third-party consultant to complete a comprehensive materiality assessment to identify our most important environmental, social and governance issues
- Engaged internal subject matter experts and executive leaders to draft and approve sustainability goals for 2016–2020
Status of Pay-for-Performance & Executive Compensation
Edwards believes incentive-based executive compensation programs can mitigate risks and foster long-term, sustainable growth. We design our compensation systems to align with the interests of our stockholders. In 2016, about 88 percent of the direct compensation for our CEO, and an average of 78 percent for our other Named Executive Officers, was performance-based. For more information, please see our 2017 Proxy Statement.