2018 Guide to Effective Proxies

2.13 CEO succesion | 203 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES WELLS FARGO WEYERHAEUSER COMPANY WILLIAMS COMPANIES, INC. XCEL ENERGY Corporate Governance MANAGEMENT SUCCESSION PLANNING AND DEVELOPMENT Aprimary responsibility of ourBoard is identifying and developing executivetalentat ourCompany, especiallytheCEO and otherseniorleadersof ourCompany. Continuity of excellentleadershipat all levelsof ourCompany is part of ourBoard’s mandate fordelivering superiorperformanceto shareholders.Toward thatgoal, theexecutivetalentdevelopment and successionplanning processis integratedinto ourBoard’s annualactivities. OurBoard hasassignedto theHRC, assetforthin its charter,theresponsibility to overseeourCompany’s talentmanagement and successionplanning process,including CEO evaluationand successionplanning. OurCorporateGovernanceGuidelines requirethattheCEO and managementannuallyreportto theHRC and ourBoard on successionplanning (including plans in the eventof an emergency)and managementdevelopment. OurBoard’s CorporateGovernanceGuidelinesalsorequirethattheCEO and managementprovide theHRC and Board with anassessmentof personsconsideredpotential successorsto certainsenior managementpositionsat leastonceeachyear. Managementand ourBoard take successionplanning very seriouslyand while theCorporateGovernanceGuidelinesrequirean annualreview,theprocessformanagementdevelopment and successionplanning occursmuchmorefrequently. Summer Fall Winter HRC Annually Reviews Talent Management and Succession Planning • The CEO and HumanResources executivescollaboratewith theHRC to prepareand evaluatemanagement development and successionplans, and theHRC reportsto thefull Board on its reviews • The HRC conductsan in-depth review of talentmanagementand succession plans and provides input and feedback,typically in July of each year Full Board Annually Reviews Talent Management and Succession Planning • The full Board conductsan in-depth reviewof talentmanagementand successionplans in executivesession and provides input and feedback, typically in November of eachyear Board Self-Evaluation Process Includes An Assessment of Talent Management and Succession Planning Processes • Asdiscussedunder Comprehensive AnnualEvaluationofBoard Effectiveness ,theBoardassessesCEO andmanagementtalentdevelopment andsuccessionplanningprocesses, includingdiversityandinclusion,each yearaspartofitsevaluationofthe Board’seffectiveness Ongoing Interactions Throughout the Year between Management, the HRC, our Chair, and our Board • Managementalsoregularlyidentifieshigh potential executivesforadditional responsibilities,newpositions,promotions,or similar assignmentsto exposethem to diverseoperationswithin ourCompany, with thegoal of developing well-rounded, experienced,and discerningseniorleaders • Identifiedindividuals areoftenpositioned to interactmorefrequentlywith ourBoard sothatdirectorsmay gain familiarity with theseexecutivesaspart of ourtalentmanagementand successionplanning process Key Results of Our Management Succession Planning Since 2016 During2017, theCompany made certainseniormanagementchangeswhichreflectourthoughtfulmanagementsuccession planning process,including naming: • C. AllenParker,previously managing partnerwith thelaw firm of Cravath,Swaine& MooreLLP,asGeneralCounselin March 2017 • JonathanG. Weiss,formerlyheadof WellsFargo Securities,LLC, asheadof Wealthand InvestmentManagement,in July 2017 following theretirementof David M. Carroll • Mary T. Mack astheheadof ConsumerLending,in addition to herroleasheadof Community Banking, in December2017 Aspart of ourBoard’s and management’stransformationefforts,ourCompany alsoidentified specificneedsand hiredexternal talentto strengthenourCompany’s capabilities in variousareasincluding by hiring: • SarahDahlgren,a formerPartnerat McKinsey& Company in theirrisk practice,and previously a 25-yearveteranof the FederalReserveBank of New York,as headof Regulatory Relations (newposition) , effectiveMarch2018 • Mike Roemer,a 27-year financialservicesveteranwho most recentlyservedasgroup headof Compliance forBarclays,as Chief Compliance Officer , effectiveJanuary2018 • Mark D’Arcy,previously global head ofOperationalRisk at StateStreet,as Chief Operational RiskOfficer , effective February2017 • Morethan2,000 newteam members hiredexternallyinto Risk Managementin 2016 and 2017 20 WellsFargo&Company 2018ProxyStatement Total of 02 pages in section CORPORATE GOVERNANCE AT WEYERHAEUSER beginning on page 17. The full board has retained responsibility for oversight of strategic risks as well as risks not otherwise delegated to one of its committees, such as cybersecurity. The board satisfies this responsibility through reports by each committee chair regarding the committee’s considerations and actions, as well as through regular reports directly from officers responsible for management of particular risks within the company. The board believes that this structure provides the appropriate leadership to help ensure effective risk oversight by the board. While the board and its committees have responsibility for general risk oversight, company management is charged with managing risk. The company has a robust strategic planning and enterprise risk management process that facilitates the identification and management of risks. This process includes identification of specific risks, ranking of the likelihood and magnitude of effect of those risks, scenario analysis, review of risk appetite, and a review of mitigation plans. Management analyzes risk areas that have the potential to materially affect the company’s businesses and integrates this information into strategic planning and discussions with the board of directors. Our enterprise risk management program is supported by regular internal audits and audits by our independent public accounting firm. We have also established a robust compliance and ethics program, as well as disciplined processes designed to provide oversight for our sustainability strategy and environmental and safety performance. SUCCESSION PLANNING The board is actively engaged and involved in succession planning. The board reviews the company’s “people development” activities in support of its business strategy regularly. This includes a detailed discussion of the company’s leadership bench and succession plans with a focus on key positions at the senior officer level. As part of these activities, the board engages in a robust CEO succession planning process, including reviewing development plans for potential CEO candidates and engaging with potential successors at board meetings and in less formal settings to allow directors to personally assess candidates. SHAREHOLDER ENGAGEMENT We believe that maintaining an active dialogue with our shareholders is important to our commitment to deliver sustainable, long-term value to our shareholders. We engage with shareholders on a variety of topics throughout the year to ensure we are addressing questions and concerns, to seek input and to provide perspective on our policies and practices. During 2017, we engaged with a cross-section of our shareholders. We also engage with proxy and other advisory firms that represent the interests of various shareholders. Shareholder feedback is regularly reviewed and considered by the board, and is reflected in adjustments and enhancements to our policies and practices. We remain committed to investing time with our shareholders to maintain transparency and to better understand their views on key issues. SUSTAINABILITY AND CORPORATE CITIZENSHIP Sustainability and citizenship are core values at Weyerhaeuser. We operate with world class safety results, understand and address the needs of the communities in which we operate, and present ourselves transparently. We practice sustainable forestry, which means we keep our harvesting and our growth in balance. Additionally, we focus on increasing energy and resource efficiency, reducing greenhouse gas emissions, reducing water consumption, conserving natural resources, and offering products that meet our customers’ needs with superior sustainability attributes. We are also deeply connected to the communities where we operate and have a long history of doing our part to help them thrive. Our governance policies and practices are essential to the success of our sustainability and citizenship strategy, establishing the framework for us to manage our environmental, economic, and social impacts and performance. The Governance and Corporate Responsibility Committee provides oversight and direction on our sustainability and citizenship strategy, annually reviewing our performance and progress toward goals, as well as key issues and trends. To learn more about our efforts, visit our website at www.weyerhaeuser.com and click on “Sustainability”. 8 WEYERHAEUSERCOMPANY CorporateGovernance Practices Evaluations TheBoardandcommitteesconductanannualassessmentprocesstoevaluatetheeffectivenessoftheirprocesses,identifyissuesor topicsforfurtherexplorationandprovidefeedbackonthequalityandtimelinessofinformationfrommanagement,amongotherthings. Theprocessincludesasurveyofthedirectors,individualinterviewswiththeLeadIndependentDirector,discussioninbothregularand executivesessions,andfeedbacktomanagement.TheBoardbelievesthisassessmentprocessisanimportantcomponentofthe governanceprocessandhelpfulindrivingcontinuedimprovementintheoveralleffectivenessofBoardandcommitteeoversight. Training Committeesareregularlyapprisedofnewandemergingrequirementsandtrendsfacingtheindustry.Eachcommitteeconductstraining ontopicsrelevanttoitsresponsibilities,andcommitteesregularlyseekinputtoprioritizetrainingtopics.Inaddition,theONES Committeeparticipatesinsitevisitstogainunderstandingofouroperations,includingtoursofournuclearplants,andthefullBoardhas touredcertainfacilitiestogainevendeeperunderstandingofvariousaspectsofourbusiness.Forexample,in2017,directorsvisited thecommandcenterforexecutionofourProductivitythroughTechnologyproject,akeyinitiativetodeploymajorsoftwaresystems. Directorsareencouragedtoparticipateinoutsidetrainingontopicsrelatedtocorporategovernanceandindustryissues.Inaddition, underourGuidelinesonCorporateGovernance,eachnewdirectorisexpectedtoparticipateinadetailedorientationprocessandeach sittingdirectorisexpectedtoparticipateinperiodiccontinuingeducation. TheCompanypublishescontinuingeducationopportunitiesperiodicallyfordirectorconsiderationandfacilitatesparticipation.During 2017,membersoftheBoardattendedoutsidetrainingontopicssuchasfinancialgovernance,emergingtrendsinauditissues,and educationonnuclearissues. Strategy Session TheBoardannuallyconductsastrategysessiontoconsidernewandemergingindustrytrends,consultwithoutsideexperts,and assesscurrentstrategiesandkeyinitiativestoensuretheCompanyiswellpositionedforthefuture.Thissessionofferstheopportunity forafluidexchangeofinformationandideas,helpingtorefinethecurrentapproach,identifynewopportunitiesandrisks,andestablish keyobjectivestobemonitoredthroughouttheyearasthestrategiesareexecuted.AgendasforfutureBoardmeetingsaresetin considerationoftheseobjectives. Succession Planning TheBoardemploysrobustpracticestoensurestrongcontinuityofskillsandleadershipovertimethroughsoundsuccessionplanning. TheGCNregularlydevelopsandtheBoardregularlyreviewssuccessionplansfortheCEOandtopleaders,aswellasplansto developand/oracquiretalentinkeypositionsofmanagement.Likewise,theGCNregularlyreviewstimingofchangesinBoard make-upgivendirectortenureandagerequirementstoidentifythetimingandneededskillsforseekingnewdirectorsforBoard positions,aswellaspathsforBoardleadershippositions,suchascommitteechairs.TheBoardhasbeensuccessfulinrecruitingand bringingonnewdirectorswithuniqueskillsthatareimportanttoourbusinessandwillcontinuetodevelopandexecuteplanstoensure soundgovernance,strongleadership,andbusinesscontinuitythrougheffectivesuccessionplanning. Shareholder Engagement and Investor Outreach OurCompanybelievesthatregular,transparentcommunicationwithourshareholdersandotherstakeholdersisessentialtoXcel Energy’slong-termsuccess.Wehavecontinuedourpracticeofengagingwithshareholdersthroughouttheyearonarangeoftopics. Presentationsatfinancialconferences,meetingswithanalystsandinvestmentfirms,regularoutreachongovernancetopics,and respondingtoinquiriesareexamplesoftheactivitiesweemploytoengageourshareholders.During2017,ourgovernanceoutreach withourlargestshareholdersrepresentedmorethan40percentofoutstandingshares,weparticipatedin20sell-side/industry conferencesornon-dealroadshowsandheldover160individualandgroupmeetingswithapproximately395institutionalinvestors, representingnearly70percentofsharesheldbyactivemanagers.TheBoardreceivedregularupdatesonsuchefforts.TheBoardalso offerschannelsforshareholderstocontactitwithanyinquiryorissue,andrespondsasappropriate. Communications with the Board TheBoardwelcomesyourinput.YoumaycommunicatewiththeBoardintwoways:First,youmaysendcorrespondencetothe Company’sprincipalofficesincareoftheCorporateSecretary,XcelEnergyInc.,414NicolletMall,Minneapolis,Minnesota55401. Second,youmaycontactthedirectorsdirectlyviaemailat BoardofDirectors@xcelenergy.com .Theseemailsaresentautomaticallyto anindependentdirectordesignatedtoreceivesuchcommunications.TheemailissimultaneouslysenttotheCorporateSecretary’s office,whomayactasagentfortheindependentdirectorsandcoordinatetheresponse.IfthereceivingdirectorrequeststheCompany torespondonbehalfofthedirectors,acopyoftheCompany-preparedresponseisprovidedtothereceivingdirector.Ifthereceiving directordoesnotrequestaresponse,theagentactingforthereceivingdirectorwillprovideasummaryoftheactionstaken.The CompanyreservestheoptiontoreviewandchangethispolicyifdirectedbytheBoardduetothenatureandvolumeofthe correspondence. 2018 XcelEnergyProxyStatement | 13 CORPORATEGOVERNANCEANDBOARDMATTERS Corporate Governance and Board Matters CorporateGovernance General Our Board believes that strong corporate governance is critical to achieving our performance goals and to maintainingthetrustandconfidenceofinvestors,employees,customers,businesspartners,regulatoryagencies, andotherstakeholders. CorporateGovernanceGuidelines Our Corporate Governance Guidelines provide a framework for the governance of Williams as a whole and also address the operation, structure, and practice of the Board and its committees.The Nominating and Governance Committeereviewstheseguidelinesatleastannually,andrecommendschangestotheBoardasnecessary. StrategicPlanning Duringtheyear,theBoardmeetswithmanagementtodiscussandapprovestrategicplans,financialgoals,capital spending,andotherfactorscriticaltosuccessfulperformance.TheBoardalsoreviewstheCompany’slong-term strategic planning at least once annually and monitors the implementation of such strategic plan throughout the year. During Board meetings, directors review key issues and financial performance. In 2017, the Board met privately with the CEO and met in executive session at each regular Board meeting and additionally as required. Further, the CEO communicates regularly with the Board regarding the implementation of the Company’s strategicandfinancialplans. Board/Committee/DirectorEvaluations TheBoardandeachofitscommittee’schartersprovideforannualevaluationsandself-assessments.Inaddition, the Corporate Governance Guidelines and the Nominating and Governance Committee charter provide that individualdirectorsshallbeevaluatedasnecessary. ChiefExecutiveOfficerEvaluationandManagementSuccession The Board and the CEO annuallydiscussand collaborateto set the CEO’s performancegoalsandobjectives.The Board meets annually in executive session to assess the CEO’s performance. The Board, in conjunction with the Compensation and Management Development Committee, maintains a process for planning orderly succession fortheCEOandotherexecutiveofficerpositionsandoverseesexecutiveofficerdevelopment. BoardLeadershipStructure Pursuant to our By-laws and Corporate Governance Guidelines, the positions of Chairman of the Board and CEO may be held by the same or different persons. At this time, the Board believes that the Company and its stockholders are best served by a leadership structure in which an independent director serves as Chairman of theBoard.Inthisregard,AlanS.ArmstrongservesasPresidentandCEOofWilliamsandStephenW.Bergstrom serves as Chairman of the Board. The Board believes that having an independent Chairman aids in the Board’s oversight of management and promotes communications among the Board, the CEO, and other senior management.Inaddition,havingaseparateChairmanoftheBoardandCEOallowsMr.Armstrongtofocusonhis responsibilitiesinmanagingtheCompany. TheresponsibilitiesoftheChairmanoftheBoardinclude:(1)presidingovermeetingsoftheBoardandexecutive sessions of the independent directors; (2) overseeing the planning of the annual Board calendar and, in consultation with the CEO, scheduling and setting the agendas for meetings of the Board and its committees; (3) overseeing the appropriate flow of information to the Board; (4) acting as liaison between the independent directors and management; (5) assisting the Chairs of the various Board committees in preparing agendas for committee meetings; (6) chairing the Company’s annual meeting of stockholders; and (7) performing other functionsandresponsibilitiesreferredtointheCorporateGovernanceGuidelinesorrequestedbytheBoardfrom timetotime. TheWilliamsCompanies,Inc.–2018ProxyStatement 5