Kimball International, Inc.

1600 Royal Street

Jasper, IN

47546-2256

P: 800.482.1616

E: ITwebmaster@kimballinternational.com

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© 2017 Kimball International Inc.

BOARD OPERATION

 

Scheduling Meetings

Board meetings are scheduled in advance. There are four regularly-scheduled meetings per year. The Board can also meet at other times or act by unanimous written consent, as appropriate in the circumstances.

 

Agenda

The Chairman, in consultation with the Chief Executive Officer, Secretary, and Lead Independent Director (if applicable), drafts the agenda of each meeting and distributes it in advance for input by the Board. There is an annual cycle of agenda items which include regular operational reviews and finance reports by the Chief Financial Officer and/or operating unit executives.

 

Attendance

It is expected that directors attend all Board meetings and meetings of committees on which they serve, as well as the annual meeting of shareholders.

 

Preparation

Relevant materials are sent in advance of the Board meeting for review and adequate preparation by Board members.

 

Board Access to Management

The Board has complete and open access to any member of the Company's management. Senior Executive Management is often present at Board meetings which allows access directly to the Board members.

 

Access to Independent Advisors

The Board of Directors and its Committees have the authority, to the extent necessary to carry out their duties, to retain legal, financial, or other advisors. The Compensation and Governance Committee shall conduct a conflict of interest review of such advisors as required by applicable law.

 

Executive Sessions of Independent Directors

Independent Board members have the opportunity to meet without management present at least twice annually at regularly scheduled meetings.

 

The Lead Independent Director of the Board, or if no Lead Independent Director has been appointed, the Chair of the Compensation & Governance Committee, shall preside at executive sessions and determine what record, if any, should be made of the executive session.

 

Shareholder Communications with Board Members

Shareholders may communicate with Board members by sending comments in care of the Company's Secretary at 1600 Royal Street, Jasper, IN 47549. The Secretary has the discretion to forward the correspondence to the director, or if circumstances dictate, to other departments within the Company to which such communication is more appropriately addressed. A log of correspondence received and copies of the correspondence are available to any director who wishes to review it.

 

Annual Board Self-Evaluation

The Board will conduct an annual review of its operation, including its members and committees with a focus on determining the effectiveness of the Board in operating as a cohesive and effective governing body. The Compensation & Governance Committee, in conjunction with the Lead Independent Director, if any, shall receive comments from all directors and report annually to the Board with an assessment of the Board’s performance, to be discussed with the full Board.

 

Board Compensation Review

The Board shall conduct an annual review of director compensation. This review will include input from the Company’s management in order to evaluate director compensation compared to other companies of like size. Any change in Board compensation will be approved by the full Board.

 

Director Orientation and Continuing Education

Meetings of the Board shall be designed to provide orientation for new directors to assist them in understanding the Company’s business as well as an introduction to the Company’s management. Further, the Company encourages directors to participate in continuing education programs focused on the responsibilities of members of the Board. The Company shall reimburse the director for customary and reasonable expenses incurred in connection with their participation in such continuing education programs

BOARD COMMITTEES

 

Committees are established by the Board from time-to-time to assist in the execution of the Board's responsibilities. There are standing committees, as well as the opportunity if necessary to appoint ad hoc committees for a specified purpose. There are currently no ad hoc committees of the Board, and there exist two standing committees:

  • Audit Committee

  • Compensation & Governance Committee

 

The Compensation & Governance Committee is responsible for making recommendations to the Board with respect to the assignment of Board members to these committees and with respect to the Chairs of the committees. After reviewing the Compensation & Governance Committee’s recommendations, the Board shall be responsible for appointing the Chairs and members to the committees.

 

These committees meet at least once per year, but typically more. Each committee carries out its responsibilities in accordance with the authority delegated in its Charter from the Board of Directors. Each committee has the authority to engage outside advisors and reports its findings and recommendations for action to the full Board.

 

A brief description for each of the standing committees is as follows:

 

Audit Committee

The primary function of the Audit Committee is to provide independent, objective oversight of the Company's accounting functions, internal controls, and financial reporting. Its primary duties and responsibilities are to monitor and oversee the Company’s accounting functions, financial reporting processes, and the audit of the Company’s financial statements; assist the Board in oversight of (i) the integrity of the Company’s financial statements, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the independent registered public accounting firm’s qualifications, independence and performance, (iv) the organization and performance of the Company’s internal audit group, and (v) the Company’s internal accounting and financial controls; and provide an open avenue of communication among the Company’s independent registered public accounting firm, financial and senior management, the internal audit group, and the Board of Directors.

 

Compensation & Governance Committee

The Committee's primary functions are to assist the Board of Directors in the discharge of its fiduciary responsibilities relating to the grant of stock compensation, the fair and competitive compensation of the Chief Executive Officer and other Executive Officers, the Company's contribution to the Retirement Plan, goals and awards under the Profit Sharing Bonus Plan, matters of corporate governance, identification, evaluation and nomination of individuals qualified to be Board members, Board and committee composition and evaluations, Board member orientation and education and succession planning.

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