Q: Why does Emerson’s Board have a lead independent director, and what are the responsibilities of the role?
A: Independence is a critical tenet of strong governance that ensures the voice and interests of shareholders drive decisions around strategy, capital allocation, compensation and succession planning. The lead director strengthens the independent leadership of the Board, acts as the Board’s liaison with the chairman and consults with the chairman regularly on company issues.
Q: Why does having Emerson’s CEO serve as chairman work in the best interests of shareholders?
A: Emerson has a strong culture of performance, and those roots run deep throughout the company. Having David Farr serve as both chairman and CEO drives long-term value creation for shareholders. It ensures management and the Board are aligned in our view of opportunities and risks, and gives Emerson a consistent strategic focus and execution that support the company’s role as a technology leader and industry steward.
Q: How are the lead independent director responsibilities balanced against those of the chairman?
A: The chairman and lead independent director serve as a check and balance to one another, building important controls into the governance process. I’ve known Emerson for 30 years and see my role as both supporting and challenging David. The CEO as chair can direct focus on the most impactful areas of the company and promote responsible Board decisionmaking, due to his knowledge of the daily business. One of David’s strengths is that he listens to others and encourages critical questions around the company’s top threats and opportunities. Together, David and I drive a highly engaged Board culture.
Q: How do you view the role of Emerson’s Board in informing strategy and evaluating risks?
A: Consistent with Emerson’s DNA, the Board employs a thorough annual planning cycle to set strategy and evaluate risk. This process includes a multi-day strategy workshop and rigorous process overseen by the audit committee to identify and prioritize the most important financial and operational threats facing the company. Through this engaged approach, the Board is informed and prepared to respond to new information and guide the company’s direction.
Board diversity and experience are critical to our effectiveness. Our Board – with women making up one-third of our members – has a wealth of experience across strategy-critical domains, including manufacturing, finance and international business. With these unique perspectives, the Board brings a balanced approach to strategy evaluation and important investment decisions – a crucial function for success.
Dr. Clemens A.H. Boersig
Lead Independent Director