1. What Keeps Boards Up At Night
What Keeps Boards Up At Night? ACC Chapter Meeting CLE July 28, Aaron Carlson, Associate General Counsel, Noble Energy, Inc. Pamela Taylor, Senior Attorney, Securities and Governance, Noble Energy, Inc. Sean Gorman, Partner, Bracewell LLP EMILY LEITCH, Partner, Bracewell LLP

2. Boards are up Thinking About:
Disclosure and Transparency
Long-term Business Strategy
Shareholder Engagement
Proxy Access
Executive Compensation
Board Composition

3. Board Member Fiduciary Duty Standards
Duty of care – Board members must educate themselves with “all material information reasonably available to them” prior to making a business decision
Smith v. Van Gorkom, 488 A.2d 858, 872 (Del. 1985).
Duty of loyalty – Board members have the duty to “eschew any conflict between duty and self-interest”
Ivanhoe Partners v. Newmont Mining Corp., 535 A.2d 1334, 1345 (Del. 1987).

4. Disclosure and Transparency
Why do we disclose?
Public companies must disclose information (good and bad) that may influence investment decisions
How do we disclose?
Periodic and current filings
Proxy statements
Registration statements

5. Long-term Business Strategy
Balancing the goals of long-term value creation versus delivery of short-term results
Board and management both have roles in strategy development
Recent developments - climate change and corporate social responsibility
Boards must be able to effectively communicate long-term strategy

6. Shareholder Engagement
Engagement has historically been focused on business or financial matters
Recent trend includes focus on governance issues
Activists are recruiting and teaming with mainstream investors
Shareholders are increasingly demanding access to boards

7. Proxy Access
Hot topic over the last two years – well over 100 companies received a proxy access proposal
SEC has been unwilling to grant companies relief
Noble withstood proposals over last two years but has made adjustments
Is this the new normal?

8. Executive Compensation
Say-on-pay advisory votes
Proper performance measures
Special awards
Upcoming Dodd-Frank requirements
CEO pay ratio
Pay-for-performance
Clawbacks
Hedging disclosure

9. Board Composition
Looking for proper balance of experience and expertise
A single director can draw the attention of activists
Women and minorities are still underrepresented
Most companies have mandatory retirement age but few have term limits
Boards should have succession plans in place
40% of directors surveyed say at least one director on their board should resign.