Edwards Lifesciences’ work to improve Corporate Governance supports our Aspiration to Create Exceptional Shareholder Value.
Edwards Lifesciences’ Board of Directors drives our unique, patient-focused culture. Through our corporate governance practices, we create a powerful and responsible organization from the top down. 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, ensuring our leaders’ values align with those of our company.
Our Board of Directors
A talented and knowledgeable team of directors oversees our organization’s success. We outline expectations for Board members 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 oversight for strategic planning and fiduciary responsibility
- Process for performance evaluations
- Responsibilities of Board committees
Edwards’ 2016 Proxy Statement describes our corporate governance practices for stockholders. Our Board of Directors consists of nine members who share responsibility for risk, fiduciary and strategic oversight. They serve on 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.
Governance for Sustainability
The Compensation and Governance Committee of our Board of Directors has oversight for Edwards’ sustainability principles and programs, 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 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 ensure business success and drive our culture of responsibility.
Engaging Our Stockholders
In 2015, Edwards’ management team contacted 26 of our largest stockholders, representing about 54 percent of outstanding shares, to gather feedback on governance-related issues. In general, stockholders expressed support for our current governance practices, pay for performance philosophy and innovation strategy.
They also expressed a strong preference for the right to call special meetings over the right to act by written consent. Edwards’ management shared this feedback with our Compensation and Governance Committee, who spent several months discussing and collecting additional input. In February 2016, they amended our Bylaws to lower the threshold requirement to hold a special meeting from 25 percent to 15 percent of outstanding shares.
Changes in Governance
Edwards recently appointed three new directors to our Board: Martha H. Marsh in October 2015, Steven R. Loranger in March 2016 and Leslie Heisz in July 2016. Mr. Loranger brings experience in global operations and manufacturing, while Ms. Marsh has an extensive background in the healthcare industry. Ms. Heisz is an experienced investment banker and finance executive. All three add valuable perspective to Edwards’ board.
Over the past year, our Sustainability Council made significant progress in aligning our sustainability strategy with our corporate strategy. Their achievements include:
- Working with a third-party consultant to complete a comprehensive materiality assessment to identify our most important environmental, social and governance issues
- Drafting a sustainability mission statement
- Engaging 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 2015, about 88 percent of the direct compensation for our CEO, and an average of 77 percent for our other Named Executive Officers (NEOs), was performance-based.
Notably, in 2015, we held our 3rd annual Compliance Day in over 15 sites worldwide. We issued over 4,000 raffle tickets to both corporate and manufacturing employees. Each location chose a theme, which included: Reminding employees to speak up and report concerns; Compliance with quality and industry code standards; and, Following our Global Business Practice Standards.
Feedback for our 2015 Compliance Day was positive and enthusiastic. This year, employees from around the world submitted ethics-themed “memes” to reinforce our commitment.