Credo Technology : Corporate Governance GuidelinesPDF Format (Credo Corporate Governance Guidelines 032825 24fed3)

CREDO TECHNOLOGY GROUP HOLDING LTD

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CREDO TECHNOLOGY GROUP HOLDING LTD (the “Company”) has established the following Corporate Governance Guidelines (the “Guidelines”) for the conduct and operation of its Board of Directors (the “Board”), the purpose of which is to set forth general principles and policies by which the Board will manage its affairs. These Guidelines should be interpreted in the context of all applicable laws, the Company’s charter documents, and the Company’s other policies. These Guidelines will be reviewed periodically by the Nominating and Corporate Governance Committee of the Company for adequacy and application, and will be posted on the Company’s website.

1. Board Composition and Selection

The Nominating and Corporate Governance Committee of the Company shall recommend to the Board criteria for Board membership, which shall include the criteria set forth in these Guidelines, and shall recommend individuals for membership on the Company’s Board of Directors. In making its recommendations, the Nominating and Corporate Governance Committee shall:

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  • review candidates’ qualifications for membership on the Board (including making a specific determination as to the independence of the candidate) based on the criteria approved by the Board (and taking into account the enhanced independence, financial literary and financial expertise standards that may be required under law or Nasdaq rules for audit committee and compensation committee membership purposes);

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  • evaluate current directors for re-nomination to the Board; and

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  • periodically review the composition of the Board in light of the current challenges and needs of the Board and the Company, and determine whether it may be appropriate to add or remove individuals after considering issues of judgment, diversity, age, skills, background and experience.

The Nominating and Corporate Governance Committee considers not only an individual’s qualities, performance and professional responsibilities, but also the existing composition of the Board and the challenges and needs of the Board at that time. The Nominating and Corporate Governance Committee also considers the impact of any change in the principal occupation of existing directors. The Committee reports to the full Board its conclusions and recommendations for nominations to the Board.

Board Size

The Board intends to have up to nine (9) members to meet its duties and responsibilities and, consistent with the Company’s memorandum and articles of association, no less than one member. Although the Board considers its present size to be appropriate, it may consider expanding its size to accommodate its needs or reducing its size if the Board determines that a smaller Board would be more efficient. The Nominating and Corporate Governance Committee shall periodically review the size of the Board and recommend any proposed changes to the Board.

Independence

A majority of the Board shall be comprised of directors meeting the independence requirements of Nasdaq at a minimum.

The Board shall make an affirmative determination at least annually as to the independence of each director.

Term Limits

It is the policy of the Board to avoid term limits which have the disadvantage of discontinuing the availability and contributions of directors who have developed experience with, and insight into, the Company and its needs over a period of time.

Notwithstanding the foregoing, each member of the Board and executive officer of the Company shall have four (4) years from his or her appointment as a Board member or executive officer of the Company to comply with these Stock Ownership Guidelines, and in the event an executive officer is promoted to Chief Executive Officer, he or she shall have three (3) years to comply with the additional holding requirement (the “Phase-In Period”). The Nominating and Corporate Governance Committee in its discretion may extend a Phase-In Period or make other exceptions in the event of financial hardship or other appropriate circumstances, including in the event of the Board member or executive officer ceasing to be in compliance as a result of a decrease in the price of the Company’s common stock. The Nominating and Corporate Governance Committee will periodically review compliance with the Stock Ownership Guidelines.

For purposes of determining compliance with these Stock Ownership Guidelines, stock ownership includes all shares of Company common stock owned outright or held in trust for the Board member or executive officer and his or her immediate family as well as vested restricted stock units; however, unvested restricted stock unit awards shall not be included in the calculation.

Notwithstanding any provisions of these Stock Ownership Guidelines, all Board members and executive officers must always comply with the terms of the Company’s Insider Trading Policy.

2. Director Responsibilities

The Board acts as the ultimate decision-making body of the Company and advises and oversees management, who are responsible for the day-to-day operations and management of the Company. In fulfilling this role, each director must act in what he or she reasonably believes to be in the best interests of the Company and must exercise his or her business judgment.

Participation at and Preparation for Board Meetings

The Company expects directors to be active and engaged in discharging their duties and to keep themselves informed about the business and operations of the Company. Directors are expected to attend all Board meetings and the meetings of the committees on which they serve and to prepare themselves for these meetings. Directors are also encouraged to attend the Company’s annual meeting with shareholders.

In order for the Board to exercise fully its oversight functions, management provides the Board with access to information regarding the Company and the markets in which the Company operates. This information comes from a variety of sources, including management presentations and reports about the performance and operations of the business, security analysts’ reports, competitive and peer companies’ information, interaction with senior management at Board meetings and visits to Company facilities. Any written materials that assist directors in preparing for a Board or committee meeting shall be distributed to the directors in advance of the meeting, to the extent possible, and directors are expected to review such materials prior to the meeting.

Company Performance and Corporate Strategy

The Board reviews the Company’s financial performance on a regular basis at Board meetings and through periodic updates, with a particular focus on peer and competitive comparisons. These reviews include the views of management as well as those of independent analysts and consultants.

The Board also conducts an annual meeting to review and approve the Company’s long-term strategy, and assess its strategic, competitive and financial performance.

3. Board Agenda

The Chairman of the Board, in conjunction with the CEO, shall establish meeting agendas of topics for consideration and review by the Board. The agendas shall then be provided to the full Board in advance of Board meetings. The Chairman of the Board, in conjunction with the CEO, shall determine the frequency and length of Board meetings.

4. Chairman of the Board and CEO

The Board believes it is important to retain its flexibility to allocate the responsibilities of the offices of the Chairman and CEO in any way that is in the best interests of the Company at a given point in time. The Board may make a determination as to the appropriateness of its current policies in connection with the recruitment and succession of the Chairman of the Board and/or the CEO.

5. Presiding Director

The Board notes that all directors are elected by the shareholders and all have an equal voice. The Board, therefore, does not believe it appropriate or necessary in serving the best interests of the Company to designate a lead director unless the Chairman of the Board is not an independent director. The Chairman of the Board and the CEO are free, as is the Board as a whole, to call upon any one or more directors to provide leadership in a given situation should a special need arise.

If the Chairman of the Board is not an independent director, the independent directors of the Board will designate a lead independent director as the presiding director to lead the meetings of the non-management, or independent, directors. The appointment of a presiding or lead independent director may also be rotated among the chairs of the independent committees of the Board.

6. Meetings of Non-Management Directors

The Company’s non-management directors shall regularly schedule executive sessions in which management does not participate. If this group includes directors who are not considered independent, the independent directors must also meet in executive session at least once a year.

The Chairman of the Board (if independent) or Presiding Director shall preside at each executive session. The Company’s annual proxy statement will identify the Chairman of the Board (if independent) or Presiding Director and the method for interested parties to communicate directly with the Company’s Presiding Director or non-management directors as a group.

7. Board Committees

The Board shall have at all times an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Subject to any changes that the Board may make from time to time:

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  • the Audit Committee shall generally be responsible for overseeing the integrity of the Company’s financial statements, its independent auditor, its internal audit function and compliance by the Company with legal and regulatory requirements;

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  • the Compensation Committee shall generally be responsible for overseeing the Company’s executive compensation, director compensation and benefits policies, evaluating executive officer performance and compensation and reviewing the Company’s management succession plan; and

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  • the Nominating and Corporate Governance Committee shall generally be responsible for identifying qualified Board candidates, recommending director nominees and appointments to Board committees, evaluating Board and Committee performance, and overseeing the Company’s Corporate Governance Guidelines and Code of Business Conduct and Ethics.

10. Director Compensation

The Compensation Committee shall review and approve compensation (including equity-based compensation) for the Company’s directors. In so reviewing and approving director compensation, the Compensation Committee shall, among other things:

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  • identify corporate goals and objectives relevant to director compensation;

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  • evaluate the performance of the Board in light of such goals and objectives and set director compensation based on such evaluation and such other factors as the Compensation Committee deems appropriate and in the best interests of the Company (including the cost to the Company of such compensation);

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  • determine any long-term incentive component of director compensation based on the awards given to directors in past years, the Company’s performance, shareholder return and the value of similar incentive awards relative to such targets at comparable companies and such other factors as the Compensation Committee deems appropriate and in the best interests of the Company (including the cost to the Company of such compensation); and

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  • evaluate the possibility that directors’ independence may be compromised or impaired for Board or committee purposes if director compensation exceeds customary levels, including if the Company makes substantial charitable contributions to an organization with which a director is affiliated.

11. Director Orientation and Continuing Education

All new members of the Board are required to participate in the Company’s orientation program for directors.

All directors will be offered the opportunity, and are encouraged, to participate in continuing education programs with any reasonable expenses to be reimbursed by the Company.

12. Management Evaluation and Management Succession

The Compensation Committee shall evaluate the performance of the senior management of the Company and shall present its findings to the full Board. The Board shall review the Compensation Committee’s report in order to ensure that management’s performance is satisfactory and that management is providing the best leadership for the Company in the long and short-term.

The Nominating and Corporate Governance Committee shall review and report to the Board on the Company’s succession planning, including succession planning in the case of the incapacitation, retirement or removal of the CEO. The CEO shall provide a report to the Nominating and Corporate Governance Committee recommending and evaluating potential successors, along with a review of any development plans recommended for such individuals. The CEO shall also provide to the Board, on an ongoing basis, his or her recommendation as to a successor in the event of an unexpected emergency.

13. Annual Performance Evaluation

The Board, led by the Nominating and Corporate Governance Committee, shall establish and conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. The collective evaluation shall be presented by the Chairman of the Nominating and Corporate Governance Committee to the full Board for discussion. This process shall also include annual self-assessments by each Board committee, relying on a review process similar to that used by the Board.