2018 Guide to Effective Proxies

2.16 Risk oversight | 215 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES ADVANCED MICRO DEVICES, INC. 2018NOTICEOFMEETINGANDPROXYSTATEMENT CorporateGovernance (continued) the Board’s assessment of its leadership from time to time. The Board has the experience of functioning effectively eitherway. The Board believes that its current leadership structure, with an independent Chairman of the Board, separate from the Chief Executive Officer, is the most appropriate leadership structure for the Company at this time, is in the best interests of the stockholders and allows the Board to fulfill its duties effectively and efficiently based on our currentneeds. Mr. Caldwell, who is independent in accordance with SEC and Nasdaq rules, is our Chairman of the Board. Mr.CaldwellpresidesatmeetingsofourstockholdersanddirectorsandleadstheBoardinfulfillingitsresponsibilities. TheBoardbenefitsfromMr.Caldwell’sextensiveanddiversifiedleadershipexperience,financialmanagementandrisk assessment experience. He also has strong public company board experience and has intimate familiarity with our historyandbusiness. Separating the roles of the Chairman of the Board and Chief Executive Officer also enables the independent directorstomoremeaningfullyparticipateintheleadershipoftheBoard.TheBoardbelievesthisstructureprovidesan appropriatedegree ofoversightandallowsDr.Su,ourPresidentandChiefExecutiveOfficer,tofocusonourbusiness strategyandmarketopportunities,aswellasonourorganizationalstructureandexecutioncapabilities. RiskOversight The Board’s role in risk oversight is consistent with our leadership structure, with our President and Chief Executive Officer and other members of management having responsibility for day-to-day risk management activities and processes, and our Board and its committees being actively involved in overseeing our risk management. The Boardandmanagementconsider“risk”forthesepurposestobethepossibilityofanundesiredoccurrencethatcould threatentheviabilityofthecompany,resultinamaterialdestructionofourassetsorshareholdervalue,ormaterially impactourlong-termperformance.Examplesofthetypesofrisksfacedbyusinclude: • business-specificrisksrelatedtoourabilitytodevelopnewproductsandservices,ourstrategicpositioninkey existingandnewmarkets,ouroperationalexecutionandinfrastructure,ourrelationshipswithourthird-party manufacturingsuppliersandcompetitioninthemicroprocessorandgraphicsmarkets; • macroeconomicrisks,suchasadverseglobaleconomicconditionsandglobalgeo-politicalevents;and • “event”risks,suchasnaturaldisastersandcybersecuritythreats. Weengageinactivitiesthatseektotakecalculatedrisksthatprotectthevalueofourexistingassetsandcreate neworfuturevalue.Managementisresponsibleforday-to-dayriskmanagementactivitiesandprocesses.Membersof senior management participate in identifying and assessing risks and risk controls, developing recommendations to determine the appropriate manner in which to control risk and implementing risk mitigation activities. Our Chief Executive Officer has ultimate responsibility for management of our business, including enterprise level risks and the riskmanagementprogramandprocesses. In fulfilling its oversight role, the Board focuses on understanding the nature of our enterprise risks, including risksinouroperations,financeandstrategy,organization,complianceandexternalexposuresaswellastheadequacy of our risk assessment and risk management processes. The Board has implemented a risk oversight model and periodicallyreceivesreportsandupdatesfrommanagement.Atleastannually,theBoarddiscusseswithmanagement the appropriate level of risk relative to our strategy and objectives and reviews with management our existing risk management processes and their effectiveness. The Board also receives periodic management updates on our operations, organization, financial position and results and strategy and, as appropriate, discusses and provides feedback with respect to risks related to these topics. In addition, the Board receives full reports from the following Boardcommittee chairsregardingeachcommittee’s considerationsandactionsrelatedtothespecificrisktopicsover whichthecommitteehasoversight: • TheAuditandFinanceCommitteeassiststheBoardinoverseeingourenterpriseriskmanagementprocessas it relates to our financial and information technology (including security and cybersecurity) risk exposures; reviews our portfolio of risk; discusses with management significant financial, reporting, regulatory and legal compliance risks in conjunction with enterprise risk exposures as well as risks associated with our capital structure; and reviews our policies with respect to risk assessment and risk management and the actions 16 ADVANCEDMICRODEVICES,INC. | 2018ProxyStatement AK STEEL HOLDING CORPORATION Communication with the Board of Directors Stockholders and interested parties may send communications to the Chairman of the Board, or to any one or more of the other Directors by addressing such correspondence to the name(s) of any specificDirector(s), or to the “Board of Directors” as a whole,andmailingit to: Corporate Secretary, c/o AKSteelHoldingCorporation, 9227Centre PointeDrive, West Chester, Ohio 45069. Board Independence In accordance with the requirements of the NYSE, the Board has adopted a policy requiring that at least a majority of its members shall be “independent,” as determined under applicable law and regulations, including without limitation Section 303A of the NYSE Listed Company Manual. Our Corporate Governance Guidelines include categorical standards for determining the independence of all non-employee Directors. Those standards are set forth in guidelines attached as Exhibit A to our Corporate Governance Guidelines, which are available on our website at www.aksteel.com. A Director who meets all of the categorical standards set forth in the Corporate Governance Guidelines shall be presumed to satisfy the NYSE’s definition of “independence” and thus be “independent” within the purviewof the Board’spolicyon Director independence. At its March 2018 meetings, the Board of Directors reviewed the independence of all current non-employee Directors. In advance of that meeting, each incumbent Director was asked to provide the Board with detailed information regarding his or her business and other relationships with us and our affiliates, and with Executive Officers and their affiliates, to enable the Board to evaluate his or her independence. Upon the recommendation of the AuditCommittee regardingauditcommittee independence,the Management Development and Compensation Committee as to compensation committee independence, and the Nominating and Governance Committee with respect to all other aspects of Board independence, and after considering all relevant facts and circumstances with the assistance of legal counsel, the Board affirmatively determined that none of the current incumbent Directors, except for Mr. Newport, has a material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us), other than being a Director, and all such incumbent Directors other than Mr. Newport meet the categorical standards of independence set forth in our Corporate Governance Guidelines and therefore are “independent” as that term is used and defined in Section 303A of the NYSE Listed Company Manual and in Rule 10A-3 under the Exchange Act. The Board further determined that nine of our eleven incumbent Directors (Messrs. Cuneo, Gerber, Kenny, Michael, Thomson, WilsonandWright, andMmes. EdisonandYocum) are an “Outside Director” as that term is used in Section 162(m) of the Internal Revenue Code and the associated Treasury Regulations, 26 CFR § 1.162-27 et seq., and that each of the incumbent Directors other than Mr. Newport is a “Non-Employee Director,” as defined in Rule 16b-3(b)(3) promulgated under the ExchangeAct. Under our Corporate Governance Guidelines, Directors have an affirmative ongoing obligation to inform the Board of any material changes that might impact the foregoing determinations by the Board. This obligation includes all business relationships between the Director and/or an immediate family member, on the onehand, andus and/or our affiliatesand/or ExecutiveOfficers, on the other. Board Oversight of Risk As an integral part of its oversight function, the Board oversees the material risks facing us, both with respect to the relative probability and magnitude of the risks and also as to Management’s strategies to mitigate those risks. The Board engages in its risk oversight role in a variety of different ways. 25 2018Proxy Statement Total of 03 pages in section 2.16 Risk oversight Because of earlier accounting concerns, as well as the more recent 2008 market crisis, investors want to have confidence that the companies they invest in and the boards overseeing them have identified the major potential risks to a company, its performance and sustainability. In addition, investors want to know that executives and boards are working effectively to mitigate or manage such risks. Naturally, relative exposure to various risks varies by industry and includes, but is not limited to, competitive threats, emerging technologies, environmental impact, misconduct or fraud, cyber-security and potential new regulations that could impact the company or its key business lines. Some companies are presenting this in a visual fashion, clearly showing the role of management, the full board and each key committee in this process. In February 2010, the SEC required companies to make new or revised disclosures about compensation policies and practices that are reasonably likely to have a material adverse impact on a company, as well as to disclose and discuss the board’s role in risk oversight. Increasingly, companies are explaining potential risks and the oversight and management of these risks, while refraining from disclosing competitively sensitive information.