Intel Shareholder Resolution (III)



Succession Planning

 

Resolved, That the shareholders of Intel (the “Company”) hereby request that the Board of Directors initiate the appropriate process to include in the Company’s Corporate Governance guidelines and policies a written and detailed succession planning policy, including the following specific features:

  1. The Board of Directors will review the plan annually;
  2. The Board will develop criteria for the CEO position reflecting the Company’s business strategy and using a formal assessment process to evaluate candidates;
  3. The Board will identify and develop internal candidates;
  4. The Board will begin non-emergency CEO succession planning at least 3 years before an expected transition and will maintain an emergency succession plan that is reviewed annually; and
  5. The Board will annually produce a report on its succession plan to shareholders omitting confidential information and produced at responsible expense.

Supporting Statement

CEO succession is one of the primary responsibilities of the board of directors.  A recent study published by the National Association of Corporate Directors quoted a director of a large technology firm: “A board’s biggest responsibility is succession planning. It’s the one area where the board is completely accountable, and the choice has significant consequences, good and bad, for the corporation’s future.” (The Role of the Board in CEO Succession: A Best Practices Study, 2006).  The study also cited research by Challenger, Gray & Christmas that “CEO departures doubled in 2005, with 1228 departures recorded from the beginning of 2005 through November, up 102 percent from the same period in 2004.”

In its 2007 study What Makes the Most Admired Companies Great: Board Governance and Effective Human Capital Management, Hay Group found that 85% of the Most Admired Company boards have a well-defined CEO succession plan to prepare for replacement of the CEO on a long-term basis and that 91% have a well-defined plan to cover the emergency loss of the CEO that is discussed at least annually by the board.

The NACD report identified several best practices and innovations in CEO succession planning.  The report found that boards of companies with successful CEO transitions are more likely to have well-developed succession plans that are put in place well before a transition, are focused on developing internal candidates and include clear candidate criteria and a formal assessment process.  Our proposal is intended to have the board adopt a written policy containing several specific best practices in order to ensure a smooth transition in the event of the CEO’s departure.  

We urge shareholders to vote FOR our proposal and to ensure that shareholders are assured that this plan is in place.

We expect Intel’s Board is sensitive to these succession issues and may deliberate carefully on them.  However, it is important that shareowners be informed about the process a company has in place for succession planning, and how often the Board reviews this issue for the CEO (and for other top executives as appropriate).  This should be part of a company’s ongoing communication with their shareowners.

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