Pfizer Proxy
Class time 8:00
ACCT 6217
Pfizer Proxy Statement
Homework
1. Three major roles/responsibilities of the board of directors
The board of directors is the ultimate decision making body of the company. The board of directors has a strong, independent oversight function, enhanced by the committees that are comprised entirely of board members (such as audit, compensation, corporate governance, regulatory and compliance, and science and technology). Each committee is responsible for additional roles and responsibilities.
For example, the audit committee must decide on the registered public accounting firm to use for the audit. They also supervise the internal controls and risk management of the company, as well as all financial reporting. Another example is the Compensation Committee which must decide on the executive compensation program.
The board of directors also selects the CEO and other members of senior management. It acts as an advisor and counselor to management and monitors its performance. In addition, the board and committee processes and procedures provide substantial independent oversight of the chief executive officer’s performance, annual evaluation of the CEO’s performance against pre-determined goals, and a separate evaluation assessing the CEO’s interactions with the board.
The above roles can be found in the proxy statement of Pfizer. More generally, the textbook relates five main functions of the board: to hire evaluate and perhaps fire the top management, to vote on major operating proposals, to vote on major financial decisions, to offer expert advice to management, and to make sure the firm’s activities and financial condition are accurately reported to shareholders.
2. List three criteria used to evaluate a public company and how Pfizer compares
Three criteria that can be used to evaluate a public company board are whether they have experienced and successful experts serving on the board, if the board has a higher fraction of
ACCT 6217
Pfizer Proxy Statement
Homework
1. Three major roles/responsibilities of the board of directors
The board of directors is the ultimate decision making body of the company. The board of directors has a strong, independent oversight function, enhanced by the committees that are comprised entirely of board members (such as audit, compensation, corporate governance, regulatory and compliance, and science and technology). Each committee is responsible for additional roles and responsibilities.
For example, the audit committee must decide on the registered public accounting firm to use for the audit. They also supervise the internal controls and risk management of the company, as well as all financial reporting. Another example is the Compensation Committee which must decide on the executive compensation program.
The board of directors also selects the CEO and other members of senior management. It acts as an advisor and counselor to management and monitors its performance. In addition, the board and committee processes and procedures provide substantial independent oversight of the chief executive officer’s performance, annual evaluation of the CEO’s performance against pre-determined goals, and a separate evaluation assessing the CEO’s interactions with the board.
The above roles can be found in the proxy statement of Pfizer. More generally, the textbook relates five main functions of the board: to hire evaluate and perhaps fire the top management, to vote on major operating proposals, to vote on major financial decisions, to offer expert advice to management, and to make sure the firm’s activities and financial condition are accurately reported to shareholders.
2. List three criteria used to evaluate a public company and how Pfizer compares
Three criteria that can be used to evaluate a public company board are whether they have experienced and successful experts serving on the board, if the board has a higher fraction of