2018 Annual Meeting of Stockholders

Board and Corporate Governance Highlights

Snapshot of 2018 Director Nominees

The nominees for Director are overwhelmingly independent. Their range of tenure strikes a balance between the knowledge that comes from longer-term service on the Board and the fresh perspective of adding new members to the Board. The nominees for Director also represent diverse points of view that contribute to a more effective decision-making process.

Board Independence

 
Board Tenure

 
Diversity of Director
Nominees

Director Nominee Attributes, Skills and Experience

The Board regularly reviews the qualifications, attributes, skills and experience that it believes are desirable to be represented on the Board to ensure that they align with the Company’s long-term strategy. See page 26 for further information.

   
   
   

Qualifications, Attributes, Skills and Experience Desired on the Board

We believe effective oversight comes from a Board that represents a diverse range of experience and perspectives that provides the collective qualifications, attributes, skills and experience necessary for sound governance. The Nominating, Governance and Corporate Responsibility Committee establishes and regularly reviews with the Board the qualifications, attributes, skills and experience that it believes are desirable to be represented on the Board to ensure that they align with the Company’s long-term strategy. The most important of these are described below.

Senior Leadership

We believe Directors with relevant Chief Executive Officer or senior executive experience bring the deep leadership qualifications and skills necessary to execute our strategic imperatives that drive long-term value.

 

Risk Management

Directors with knowledge or experience in managing and mitigating key risks, including financial, operational, regulatory, environmental, construction and cybersecurity, assist us in effectively managing risk in a rapidly changing environment, which is critical to our success.

 

Audit/Financial and M&A

Accurate financial reporting and solid auditing are important to us. Our Board includes Directors with considerable experience with public company financial statements and internal controls comparable to the complexity of ours. With major capital projects as a part of our long-term strategic plan, Directors with finance and capital allocation experience continue to be important to our success. We also believe Directors with public company merger, acquisition and disposition experience are particularly essential to the continued integration of our recently-acquired businesses and for the consideration of any potential future opportunities.

 

Governmental Affairs/Regulatory

Directors with experience in leadership positions within agencies relevant to our industry or in other regulated businesses are key to our ability to maintain respected regulatory relations and our reputation for doing the right thing. As an important component of U.S.-critical infrastructure, Directors with active security clearances and with background and exposure to the asymmetrical cyber and physical threats facing our industry enable us to stay informed about relevant security issues.

 

Industry/Operations (Electric, Nuclear and Natural Gas)

We are focused on providing clean, safe, reliable and affordable energy to customers. We also continue to work to advance our country’s capability to generate nuclear power and pursue innovations for a clean energy future. To do this, we include Directors on our Board with deep knowledge and experience in the electricity industry and with nuclear energy. We continue to seek opportunities within the midstream through downstream business operations in the natural gas industry and, with our recent acquisition of Southern Company Gas (GAS), we believe it is important to include Directors with natural gas experience. Directors who previously served on the Board of Directors of one of our operating companies also have operations knowledge and experience that is helpful to the Board.

 

Corporate Governance and Service on Public Company Boards

Our Board includes Directors with experience in corporate governance matters and service on other public company Boards, providing insights into Board management, relations between the Board, the CEO and senior management, as well as Board refreshment, agenda setting and management succession. These insights are critical to the governance of our complex business.

Environmental Regulation and Policy

As a leader in the energy industry, Directors with a deep understanding or experience with the oversight of environmental policy, regulation, risk and business operation matters permit us to lead innovation and to focus on safe and responsible operations.

 

Major Projects

Directors with oversight or management experience of major capital projects aimed to drive long-term value are particularly desirable as we continue to manage our major capital projects.

 

Technology/New Economy

The markets for our businesses are ever changing and industry disruptions and technological advances play a significant role in these changes. We believe Directors with experience related to relevant technology innovations, including clean energy solutions, provide insight needed for us to remain nimble and competitive.

Key Corporate Governance Practices

We seek to establish corporate governance standards and practices that create long-term value for our stockholders and positive influences on the governance of the Company. Our key corporate governance practices include:

  • Annual election of Directors

  • Majority voting for Directors, with a Director resignation policy

  • 10% threshold for stockholders to request a special meeting

  • Proxy access bylaw that provides stockholders (or a group of up to 20) that have maintained ownership of 3% of shares for three years the ability to nominate the greater of two nominees or 20% of Directors

  • 14 of 15 Director nominees are independent, with an average tenure of independent Directors of seven and one-half years

  • Strong Lead Independent Director

  • All Board committees are comprised of independent Directors

  • Annual Board and committee self-evaluations

  • Proactive stockholder engagement

  • Clawback policy under our Omnibus Plan

  • Strong stock ownership guidelines

  • Annual long-term and emergency management succession planning review

  • Anti-hedging and anti-pledging provisions

Recent Governance and Disclosure Highlights

We are committed to enhancing our governance practices each year. Recent governance and disclosure highlights include:

  • Continued our stockholder engagement efforts with a significant focus on institutional investor and environmental stakeholder outreach

  • Added four new Directors to the Board and, as of the annual meeting, will have had two Directors retire in the past four years

  • Enhanced focus on multi-year Board refreshment and Board succession planning

  • Refreshed Corporate Governance Guidelines and committee charters to better reflect Board committee roles and responsibilities

  • Included a letter from the independent Directors

  • Adopted a proxy access right for stockholders

  • Eliminated the “fair price” anti-takeover provision in the Certificate of Incorporation