2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 204 AT&T, INC. BANK OF AMERICA CORPORATION ProxyStatementSummary Governance Objectives OurBoardofDirectorsoverseesthedevelopmentandexecutionofourstrategy. TheBoardhasadoptedrobustgovernance practicesandproceduresfocusedonourResponsibleGrowth.Tomaintainandenhanceindependentoversight,ourBoardhas implementedanumberofmeasurestofurtherenrichBoardcomposition,oversight,andeffectiveness.Thesemeasuresalign ourcorporategovernancestructurewithachievingourstrategicobjectives,andenableourBoardtoeffectivelycommunicate andoverseeourcultureofcomplianceandrigorousriskmanagement. Enhanced Director Recruitment OurBoard is committed to regular renewal and refreshment in alignmentwith our long-term strategy. Thoughtful Self-Evaluations Thoughtful, Interconnected Governance Practices OurBoard utilizes a deliberate process to assess candidates and nominees, including reviewing their independence, skills, and experience including service on other boards, other time commitments, and any potential conflicts of interest. OurBoard’s rigorous on-boarding and director education processes complement this enhanced recruitment process.See page19. OurBoard has continuously enhanced the director recruitment and selection process, giving us an experienced and diverse group of nominees.See page3. OurBoard and committees conduct intensive and thoughtful annual self-evaluations.Our directors provide feedback onBoard effectiveness,with particular emphasis on areas such asBoard composition, focus, culture, and process.See page 17. ‰ Active Independent Oversight Our independent directorsmeet privately in executive session at each regularly scheduledBoardmeeting and held16 such sessions in2017.See page19. OurBoard reviewsCEO and seniormanagement succession and development plans at least annually, and assesses candidates duringBoard and committeemeetings and in less formal settings.See page 26. Our independent directors conduct theCEO’s annual performance review and set his compensation. See page28. Our Lead IndependentDirector’s robustandwell-defineddutiesare set forth inourCorporateGovernanceGuidelines; theyextendbeyond thoseofa traditional leaddirector.Seepage15. ‰ ‰ ‰ ‰ ‰ The self-evaluations also confirm the appropriatemix of Board skills to oversee execution of our strategies and driveResponsibleGrowth. ‰ OurBoard receives stockholder feedback on its governance practices through extensive, year-round outreach.See page21. OurBoard regularly assesses its optimal leadership structure.See page15. ‰ ‰ ‰ ‰ ‰ Key Statistics about Our Director Nominees 6.1 yearsaveragetenure, belowthe8.7-year S&P500average (1) 14 of 15 are independent 33% are women 47% are diverse 60% haveCEO experience 33% haveseniorexecutive experienceat financialinstitutions (1) Ourdirectornominees’averagetenureiscalculatedbyfullyearsofcompletedservicebasedondateofinitialelectionasofourannualmeetingdate;source forS&P500average: 2017SpencerStuartBoardIndex . ActiveIndependentOversightOurLeadIndependentDirector’srobustandwell-defineddutiesaresetforthinourCorporateGovernanceGuidelines;theyextendbeyondthoseofatraditionalleaddirector.Seepage[ Š ].OurindependentdirectorsmeetprivatelyinexecutivesessionateachregularlyscheduledBoardmeetingandheld16suchsessionsin2017.Seepage[ Š ].OurBoardreviewsCEOandseniormanagementsuccessionanddevelopmentplansatleastannually,andassessescandidatesduringBoardandcommitteemeetingsandinlessformalsettings.Seepage[ Š ].OurindependentdirectorsconducttheCEO’sannualperformancereviewandsethiscompensation.Seepage[ Š ].EnhancedDirectorRecruitmentOurBoardiscommittedtoregularrenewalandrefreshment;ourBoardhascontinuouslyenhancedthedirectorrecruitmentandselectionprocess,givingusanexperiencedanddiversegroupofnominees.Seepage[ Š ].1OurBoard’srigorouson-boardinganddirectoreducationprocessescomplementthisenhancedrecruitmentprocess.Seepage[ Š ].ThoughtfulSelf-EvaluationsOurBoardandcommitteesconduct intensiveandthoughtfulannualself-assessments.OurdirectorsprovidefeedbackonBoardeffectiveness,withparticularemphasisonareassuchasBoardcomposition,focus,culture,andprocess.Seepage[ Š ].OurLeadIndependentDirectorregularlymeetswitheachdirectortogatherinputonBoardmatters.Seepage[ Š ].OurBoardregularlyassessesitsoptimalleadershipstructure.Seepage[ Š ].OurBoardisinformedbyinputfromstockholders.Seepage[ Š ]. BankofAmericaCorporation2018ProxyStatement iii Total of 03 pages in section CorporateGovernance Annual Multi-Step Board Evaluation Each year, the Corporate Governance and Nominating Committee and the Lead Director lead the Board through three evaluations: a Board self-evaluation, Committee self-evaluations, and peer evaluations. Through this process, Directors provide feedback, assess performance, and identify areas where improvement can be made. We believe this approach supports the Board’s effectiveness and continuous improvement. Peer Evaluations • • • • Understanding of the business Meeting attendance Preparation and participation in Board activities Applicable skill set to current needs of the business Feedback Incorporated Committee Evaluations Committee process and substance Committee effectiveness, struc- ture, composition, and culture Overall Committee dynamics Committee charter • • • • Board Evaluations Process and substance Specific issues which should be discussed in the future Performance in key areas • • • • Effectiveness, structure, composition, culture, and overall Board dynamics Changes are considered and implemented • • Corporate Governance and Nominating Committee reviews feedback, discusses individually with each the Lead Director and the CEO, then discusses with the Board, the committees, and individual directors as applicable | 34 | www.att.com 2.14 Board and director evalua tion Evaluation of overall board effectiveness, as well as that of individual directors, is an important yet sensitive topic that companies and their boards handle in different ways. This also is a necessary process for identifying underperforming directors, to pave the way for “new blood” and perspectives to join the board. Rather than sharing the specific evaluation results, companies typically describe their processes and the fact that this is a high-level and ongoing area of board focus.